Can anyone become a banker?
I'm a college freshman who's feeling insecure about whether I'm actually cut out for banking. For reference, I attend a HYPSM as a CS major, and was set on majoring in CS all throughout high school: I loved participating in math and competitive programming olympiads and took all the advanced courses in STEM. Maybe it was because of this STEM/CS bubble that I set my sights on investment banking. However, I'm a freshman in college now, and I'm having second thoughts about whether investment banking is truly for me or if I'll even be successful in the industry. I had the impression coming into college that as long as you're smart, you could learn the subject and become successful in IB, but I think I lack the people skills to bring in deals consistently if I were to move to the higher levels. While I'm a member of a few finance and consulting clubs, I just don't ever see myself as a top banker who can bring in deals in large volumes. Is this something that can be developed, or should I just do something like SWE or quant trading
Edit: to clarify, my primary goals are money, prestige, as well as exit opps for long term money and prestige--not anything intrinsic about IB or the field. So if SWE/quant offers those three then I'll have no trouble switching
I’d presume that experience in the industry allows you to be more confident as you continue your career. Banking now is not at all looking for only finance majors. If you’re good with numbers, have a passion for the industry, and genuinely want to be there you’ll succeed.
With your school, you’ll have great opportunities if you just put in effort.
Idk, if I went to a HYPSM school and was a Comp Sci major I would try and stick it out unless I hated coding or struggled as I started the more advanced classes. IBD is for kids who cant code (very few folks are considering using their Comp Sci major to enter finance, which isn't because of the rigor of the transition).
IBD as an industry is trending down whereas Software engineering is trending up, and will be a core component of all industries across the next decade. This much is objectively certain. I am not an M&A IBD guy but I work directly with them as Im in Corp Dev and so this means my industry is suffering as well.
I am not looking to insult IBD but you sound like you are on track to pursue the most sought after career path right now, being a software engineer at a FAANG company. I don't think IBD can compare in any way other than comp.
I would for sure rather be my friend at Microsoft than myself. I worked my ass off to break in to finance with no connections but if I was on track to graduate with a comp sci major I never would have considered this route. If you really are interested in finance, learn it in your free time and continue you onward as a comp sci major. I learned finance in my free time, there is no reason you can't too.
Succeeding in IBD long-term and at the top levels requires being extroverted and personable. Being an excellent software engineer requires out of the box thinking, a deep understanding of the rules requirements and parameters you operate within, and a desire to push the limits on what is deemed as possible. IBD at a high level is sales with a deep understanding of businesses within certain industries, which is really cool, but doesn't quite require the same brain power as software engineering.
IBD may be glorified more and even deemed more prestigious, but ask 100 different bankers if they could work as a software engineer and I bet you 80+% would say yes without a follow up question. IBD is incredibly exhausting and the hours and constant stress take a horrendous tole on your mental and physical health.
Hopefully my ramblings help a bit.
Edit: I do want to clarify one thing. IBD and M&A as a whole is not "suffering" in the sense that jobs are being cut or there is less activity. As everyone reading this post probably already knows, M&A activity is at an all time high, and thus the demand for IBD M&A professionals has never been higher. However if you look at the hours worked and the salaries and bonuses since the 80s (and take into account inflation ofc) you will quickly realize it isnt as great as it once was. Is it still one of the top 3 most prestigious jobs out there? Probably, depending on who you ask. Does it still pay more than just about any other job right out of school? Absolutely. IBD is a fantastic career path, but the problem is you are comparing it to the golden ticket, software engineering at a FAANG company. In my humble opinion (and again this is all just my opinion and is open for debate), I would stay heads down with software engineering.
IBD is definitely on the decline. Hence why everyone wants to GTFO! And I almost disagree that it's even a viable career path. I only see it getting worse for the industry, not better. It's a shadow of its former self since the GFC. There will only be more regulation, wage compression, and bad press. I don't know any "career bankers" who would leave the industry in a heartbeat for something that offered them stability and a life outside of work.
Why is it that people suck software engineering's dick so much? It's literally mind-numbing boring and everyone you work with are introverted nerds from India or China.
Well I left IBD because I hated it, my friends in IBD all hate it currently, and my mentors who are in PE but used to be in IBD also hated it. I didn't "suck software engineering's dick" Patrick Basedman.... I simply stated that I think other than Comp, it is a better career avenue than IBD. As stated, THAT IS MY OPINION. I have friends in both fields. I have experience in a number of different fields and have spent time writing code and building DCFs, so I felt qualified to add my $.02. No where in my post did I say "Hey OP, software engineering is full of alpha chads banging models and going out until 2 AM and they barely work and they love their jobs all the time!"
You're being hyperbolic regarding what my post stated. I was simply trying to advise OP prioritize a WLB if nothing else. My friends at FAANG companies have a better WLB, enjoy their work more, and make a material amount, even compared to IBD.
Lastly, I stated that IBD is one of the best possible career paths in my Edit.
Ivy CS grad here working in IB. Call me biased, but I disagree.
Idk man. Most of my close friends are actually SWEs. It's so much fun hanging out with them playing Dota 2. I miss those days.
One thing I do hate about them is their fashion choice.
I appreciate your response, +1 SB. I think you have a good perspective and probably have more valuable insight than most of us. As far as I know, not many people make the transition you made, and I bet banks found your background to be highly valuable. I am sure they knew you were intelligent and had strong experience problem solving, so they ate you up. As a non-STEM major, I have 10x more respect for my friends with Engineering / SWE majors, and the ones interested in finance got in with relative ease. I do think that is worth mentioning that IBs will want a CS major from a top school just as much as someone with an Econ / alternative major. Out of curiosity, do you believe OP should still major in CS even if they wish to pursue IB?
In my experience I was actually writing code so I really enjoyed that. I found it to be eye opening and enjoyable, but probably because it was a small component of one of my projects in consulting. I am far from proficient in coding and have never been in a SWE role FT.
The only comment I would make (and again its just my $.02) is that I think switching from IB to a solid software dev job would most likely be really difficult too. Once you have a few years of experience in either field, I doubt the other field (regardless of if it is SWE / IB) has much of a desire for you.
I'm going to put this very simply: investment banking is a relentlessly tiring job because of the anxiety and mental agony that you have to suffer. But outside of this nebulous, abstract suffering of constantly being "on call," it is a relatively SIMPLE job, not easy, but SIMPLE. Dude, I couldn't code if you paid me $500k because I just suck at it. Outright, I am just horrible at it. I studied engineering early on and switched because I thought it didn't pay enough and my personality just wasn't built for it. But I am sure that you can do it, just have more confidence in yourself.
LOL
If you're doing STEM at HYPSM you have more lucrative doors open to you with better WLB (quant trading/research) they pay 3-4x more than IBD. Even upon entry.
Any sources for that claim? 50%-75% more makes sense but 3-4x is just completely inaccurate. Base+bonus+sign on at top EB can easily hit 250k, top candidate at Jane Street/HRT/similar shop will maybe hit 375k first year all in.
500k is p standard now for JS/Citadel hires although its p front heavy on the signing bonus. Source: verified JS/Citsec members have said this.
CVP/PJT type shops probably stack up at about 1/2 that but BBs/MMs will not.
Grind your ass off to become a quant dev at a hedge fund or some shit. You'll be making more than IB money while working 40-50 hour work weeks. It's not easy to do, but if you have the intelligence, then that is worth pursuing. I wish I had tried comp sci when I was younger. Maybe I could've broke into there and had a better WLB.
I think anyone with the determination and brains can actually become a banker given the interviewing concepts for both behaviorals and technicals aren't particularly difficult to grasp, and landing interviews is totally dependent on how hard you network or what school you go to. The real question is more can you stay a banker. People put so much effort often times into becoming a banker but don't really consider what it takes to succeed on the job. Things like not remembering that the job is extremely demanding, not being able to hold a thick skin when shit starts to hit the fan, or not having a proper mental framework in place beforehand to tackle all aspects of the role are severely underlooked. Basically what I'm saying, anyone who really works towards it can make it into banking but it's the few who can actually succeed and not suffer in it.
Can you opine on the transition from associate to VP+ where you move from a more execution role to now being responsible for bringing in business? Did you observe there to be a negative correlation between a top bucket analyst and top director (or no correlation)?
Generally the ideal Aso to VP candidate will be viewed as capable of maintaining the day-to-day dialogue with the client and taking full point of all transaction execution. Sourcing business at the VP1 level isn't really expected but you'll certainly be evaluated more than ever on your ability to do so in the near future.
To your second question, not at all. Many times, the top bucket analyst won't make the best Director-level banker. Our firm took after Lehman in that we always peg certain analysts as "Managing Analysts" jokingly in that we know they'll be great later but sure, they aren't amazing at being the quintessential analyst. I've seen it in quite a few people's progression to D/MD - they were middle to upper middle bucket (basically not top-bucket) but did amazingly when they got to the aspects of the job which involved more client-facing work. Note that I'm not saying the bad analysts make it to that level as generally to succeed as D/MD, you still need to make it past the execution roles required of the Aso/VP positions and being a successful sr banker certainly means you have an absolute mastery of execution knowledge. After all, as playing point as a company's advisor, you need to be the one who makes sure the process is running it should.
Just curious but really why can fewer be associate? Seems like the analyst role but more delegation and you're still pretty far removed from the client no? Agree on the rest though senior associate and above definitely the game changes A LOT
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