Checking in 6 years later [IB to MBB transition]

Hi guys, Feinstein here. Short story is, a bit over six years ago, I posted on this forum regarding a career decision on whether to stay in IB or go to MBB ("Please Talk Me Out Of This - 2nd Year BB Associate"). I ended up going to MBB. It’s been six years, and somehow I remembered this post, so I thought I’d provide an update as to how things are going.

TL;DR

I couldn’t have made a better decision. I am happy as a clam. This was quite simply the best career decision I’ve ever made. And my current job is the best one I’ve ever had. I could see myself here for a significant, if not the entirety, of my career. I am now on the level right below partner and (fingers crossed) should be elected this cycle. I do most of my work in my former coverage industry (TMT).

Transition

The transition brought to life just how unusual the situations was. I updated my LinkedIn status the Friday before I started, and over the weekend was bombarded by nearly a dozen of my b-school classmates toiling away in banking and asking if I could help them make the transition as well. I did try, but I was the only one that I’m aware of.

I also lost my “seniority” and had to start over as a first-year associate. This bothered me for about a week, and then I stopped thinking about it.

I thought I would do most of my work in FIG, but it turns out that wasn’t the case. Management consulting firms that serve FIG do a lot of work that wasn’t even remotely connected to what I used to do, e.g. risk/CCAR, retail banking, wealth management, backoffice lean ops, etc. I did however find the TMT people almost immediately and they were quite happy to have me in.

Work and clients

Overall I’d say the quality and “interesting-ness” of the work is leaps and bounds above banking. You get to see more of the company and understand how things tick. You also get a lot more access to senior management in a much less contrived/contorted way.

For example, right now I am leading a transformation at a large tech company (Fortune 100), and the entire c-suite and I are on a first name basis. I walk into the CFO’s office about a 5-6 times a day to catch up quick items. Instead of highly stage-managed “pitches”. It just feels a lot more of a natural way to build relationships. And I am in my early 30s.

Funny story: when my current CFO and I first met, on learning I was a banker, he reached over to his desk and pulled out a pile of “strategic alternatives” decks, and we both had a laugh over the stupid/silly shit bankers sent him regularly.

Moreover, I advise my client on a much more intimate basis. We talk about the capital structure, sure, but we also talk about individual quirks among the senior management team, who among the junior ranks we ought to give a career-proving opportunity to, who should be encouraged to find other opportunities, how their kids are doing in school, etc.

Comp

Last year, I made a bit north of 400K all-in. And if I get elected partner this year, that should nearly double. On an “expected value” basis, I think I ended up better than banking because of the risk of layoffs in banking is just astronomically higher. When I left banking, there were serial layoffs going on, with several rounds each year. Only downside is that since my firm is a partnership, deferred comp (and taxes) isn’t really a thing.

Lifestyle

Some weeks the hours are about as bad, but most weeks the hours are way better. I think what also factors in here is that the work is much more meaningful. We value “impact”, and the young kids are encouraged to speak up if the work doesn’t “move the needle”. So the random bullshit PowerPoint churn does happen, but it’s a lot less asinine.

I can count on one hands the weekends where I actually “worked” (vs. checking emails every once an a while) in my time here.

People

The people are much, much, MUCH better. There’s a good reason for that. Because there is constant turnover of people, the bad eggs get ruthlessly ousted every year or two. Even partners are regularly asked to leave if they can’t demonstrate good people leadership.

Moreover, because the exit options (see below) are better, you don’t have what I call “African dictator syndrome” going on. In banks, because there really are no exit options for senior bankers, people hang on for dear life with death grips to stays. Partners who exit from my firm usually get very decent C-level or C-level minus-1 roles with decent comp and lifestyle, and often get incentives to leave if they are underperforming. As a result, they are less obsessed with staying because they have options elsewhere and behave less like jerks. Kind of like how African dictators are obsessed with staying in power because there’s nothing for them afterward, but if they had a decent retirement program, yeah, they’d let go.

Finally, the culture is a lot more hierarchical. I can count on one hand how many client meetings I’ve attended in my 3ish years in banking. In consulting, on my first project, I was given feedback for not speaking up enough... in a c-level-minus-1 meeting... on my 2nd day at the firm.

Skill and professional development

The training in skills and professional development is a lot more than in banking. You learn how to message things subtly but also with force, and also able to vary them depending on client context and attitudes. You learn how to read the room, read body language, decode speech patterns. You can talk about things and sound knowledgeable on things other than bond maturities, etc.

You learn how to manage large, complex projects with people of different skills sets and profiles, not just an army of banking analysts. You learn how to adapt to different expectations but also how to bring out the best in people, how to motivate and inspire them, not just bark orders and turn PowerPoint decks.

I get real, actionable feedback and advice on a regular basis. Not just passive-aggressive vague sounding horsecrap once a year when my staffer convenes the VPs to sit at a round table and bad mouth the associates.

I now lead a team of 50+ people at my current case, and feel very much like I am exercising a deep general management skill set, and not just a technical specialist skill set.

Exit options

So I’m not really thinking about exits, but I get pinged by headhunters roughly once a week for VP roles at large companies, for lateral roles at competing firms, and sometimes for PE portco ops roles. About once a quarter, I also get pinged for MD roles (usually in strategy) at large banks, a profile for which I’m apparently extremely popular. Even got pinged for a role in the Trump administration (I said no, duh). And yes, for the past six years, these roles have increased in attractiveness, comp, seniority, etc.

Perks

Travel can be a bitch, but my FF mileage + hotel points as now north of 1 million. My wife and I had, basically, a free honeymoon. Yes, it’s battle pay, but... hey... do it while you’re young, right?

Innovation

Unlike in banking, where people not jumping through hoop are punished for not jumping through hoops, being entrepreneurial and figuring out new ways to serve clients is applauded and celebrated.

Introspection

Look, do I regret going into banking? Not at all. I learned valuable skills in financial modeling and having a corporate finance-driven view of the world. Given the choice, I would definitely have done my analyst years in banking again. But I am also very fortunate and lucky to have been able to make the jump post-MBA (and outside of regular MBA recruiting). If I didn’t, who knows where I’d be now. 5% chance I’d still be in banking (based on having been to my 5-year MBA reunion 2 years ago) and may be I’d be in some dead-end staff job as Director of FP&A at Pfizer or something...

Not encouraging the would-be bankers here to go into consulting, or vice versa. Just sharing my experience (which to be fair started out “in trouble” as I graduated college at the peak right before 08, and MBA Into the “false recovery” of 11).

Aaand of course happy to take any questions.

 

I dunno, I figured it was a natural progression. In 2012, Wall Street was still going through lots of painful change and restructuring, so I thought my MBB firm would value my insights on waste and inefficiency, etc. so we could restore pre-crisis earnings levels. Turns out: 1) most of the painful retrenchment was already done or at least the playbooks were already written, and 2) more structural changes as a result of Dodd Frank went to far more specialist FIG consulting firms like Promontory.

Funny story: I ran into my old group head on the street one day, and it was night and day, because he apparently knew my firm was doing some work at my former bank. He was all chummy and nice trying to get information on exactly what we were doing. Offered to take me to drinks and steaks. I was all smiles and offered up nothing. He wouldn’t give me the time of day when I was an associate.

Regarding high turnover, it’s good if it gets rid of bad people (consulting up or out). It’s bad if it gets rid of people regardless of whether they are good or bad (banking layoffs). Also structurally, in the former, the people leaving have better options and thus try to leave a good impression. And in the latter, the people leaving are pushed out and behave in terrible ways in order to stay.

I had an instance where I had a senior partner behave particularly reprehensibly in a client meeting. I called the senior partner’s evaluator and told him what I saw. Said evaluator convened a special committee to investigate the behavior and found a pattern of unethical behavior and questionable judgment. Six months later, that senior partner was out.

 

"I had an instance where I had a senior partner behave particularly reprehensibly in a client meeting. I called the senior partner's evaluator and told him what I saw. Said evaluator convened a special committee to investigate the behavior and found a pattern of unethical behavior and questionable judgment. Six months later, that senior partner was out."...................

wow, ratting on your senior partner to HR sounds more "particularly reprehensible" to me...

 

This is a great write-up; thanks for coming back to share your experience. It's rare to get a thoughtful perspective from someone who has done both banking and consulting.

  1. Are there people who are just not "strategic" enough for MBB? The way people talk to and treat each other and the relaxed hierarchy in MBB is super attractive to me, but I'm far stronger quantitatively than I am with strategic critical thinking.

  2. You had me ready to jump ship from IB until you said, "Given the choice, I would definitely have done my analyst years in banking again." The reality is that an analyst stint in banking gives you a strong corporate finance skill set to fall back on. Do you think, at the analyst level, that the trade off is worth it?

 

These are good questions.

  1. I don’t think so. The MBB of today has changed by leaps and bounds versus just 5 years ago. They are branching into big data, cybersecurity, restructuring, etc. In fact, “corporate strategy” has long since been the minority in what MBB firms so.

  2. Yes. In fact, I would go so far as to say that my analyst years in banking gave me the credibility to be MORE effective as an MBB consultant because I was able to engage the CFOs of my clients on grounds that they saw as credible, instead of conceptual, pie-in-the-sky, strategic mumbo jumbo. I would also say that while the kids who are analyst-level in MBB (post-college) are smart as a whip, they often don’t do well if they stay too long because they miss the context, wisdom, life experience, gray-hair factor, whatever else that makes it easier for them to form peer-like relationships with senior clients.

 
blueshine144:
The way people talk to and treat each other and the relaxed hierarchy in MBB is super attractive to me

I want to make sure I’m portraying the culture fairly here. It’s not always “relaxed” (and in fact can sometimes be quite intense). Also would be silly to claim that we don’t have hierarchy. However I would say that people are more genuine and engage with each other as professionals, as colleagues, and generally assume good intent. There is very little contrived Kabuki-theatre-style BS that I saw in banking.

Also as a result, jerks and prima donnas do exist here as elsewhere, but they get identified quickly and are brought to task for their behavior. In the long run, if nobody wants to work with them, then they don’t have a future at our firm. The money you bring in definitely doesn’t outweigh your contribution (or lack thereof) to the professional environment.

 

Poorly worded on my part. I meant relaxed relative to banking.

"We value "impact", and the young kids are encouraged to speak up if the work doesn't "move the needle".

This is mostly what I'm talking about. This kind of thing doesn't happen happen in banking, so far as I've seen (whether because of the nature of the work or for other cultural reasons). So while there is certainly still a hierarchy in consulting, I imagine it would be less in-your-face that you're at the bottom of that hierarchy under these kinds of conditions (even if speaking up isn't all that common, having the option goes a long way)

 

Perhaps, but it would have been solely for the exit opportunities rather than consulting for a career. As much as I hated IB, I disliked even more that all I was going to get out of it if for my blood, sweat, and tears if I got fired was a 200K + equity a year a job in suburban New Jersey drafting press releases in response to activist investors.

Btw, the Strategy& folks are really screwed. PWC is underpricing their own group. The senior guys are going to wait until their guaranteed bonuses expire, and then they’re all going to flee.

 

Hi Feinstein thanks for sharing your perspective and glad things are going well. A few questions

1) In the event you ultimately decide to join corporate (perhaps poached by client), what sort of c-level role you think you will be best suited for? A general manager, a functional leader, or a chief strategy officer/corp dev head?

2) If the natural role for a partner-level consultant at corporate is the chief strategy officer, will be you competing for spots against Ds/MDs from investment banks, who might claim they are as "strategic" as a MBB partner, with sector expertise, arguably more c-suite/board exposure, AND significant deal-making experiences?

3) have your clients already tried to poach you, if you don't mind sharing?

Appreciate the insights, cheers

 

All good questions.

  1. If I were to join a corporate, I think I might join as a functional leader. I seem to get along quite well with CFOs (because of banking background). I can’t picture myself as a GM or a CSO for all sorts of reasons.

  2. To be completely honest and blunt with you, there have been exactly zero cases where an E/MD in my experience has been seriously considered as a CSO. They are too transaction-focused, which is the opposite of what a CSO is supposed to be. If I were looking to be an SVP Corp Dev on the other hand, I could see an E/MD being a more compelling candidate. Also, while an E/MD’s c-suite exposure is limited to the pitch or the transaction of the day, I’ve actually been in a position where I’ve been invited to join board meetings as an unofficial observer, and provide insights and feedback to the chairman on what I saw going on.

  3. Yes. At about half of my clients, at some point I’ll get a conversation where a senior guy says gee, it would be great to have someone like me around on a more permanent basis. But I’ve never seriously pursued them. The positions mooted usually are either 1) Chief of Staff to the CEO, 2) Corporate Controller or some other direct deputy to the CFO with presumption of succession, or 3) something in strategy, although once a product portfolio role was floated.

The roles that I usually pitched via headhunters are 1) strategy roles (usually at a FIG), 2) “adult supervision” to fill out the c-suite of a startup that has gone to late-stage VC, and 3) PE ops roles.

 

Yep. I get on a plane Monday morning and am usually home Thursday evening... sometimes in time for dinner with the wife. Right now, I’m sitting in LGA because all flights are grounded, but usually I’d be on my way to my client by now.

The “being a mile wide and an inch deep” is similar to the “borrow your watch and tell you what time it is” — the exception that proves the rule. Yes, occasionally we still get hired to do “validate a pre-existing position” work, but most of the time it’s structured and scoped so that we are bringing in an insight or an operating discipline that our client wouldn’t otherwise have.

A few years ago, for example, I served a client (PE owned) that got direction from their board to set up a KAM (key account manager) program in their sales division. Their sales VP had no idea how to set up a KAM, so after 1) Googling fruitlessly, and 2) making some pretty uninformative phone calls to sales VPs at the rest of the portfolio, hired up and we were able to set up an infrastructure, a review process, an account planning process, and pilot it in certain regions for him. In 3 months.

 

I'd say the skills that benefitted me the most are:

  1. How to deliver different messages with different styles and attitudes. Even when I'm angry, I'm strategically angry, and its designed to elicit a specific response from my client. More theatre than anything else.

  2. How to read the politics of different clients situations. Understanding people's motives, desires, and what might cause them to behave in certain ways, why, and how to play to them.

  3. How to ruthlessly prioritize and ensure your deliverables and work plans are all tied to impact and not for the sake of moving commas around. Builds a better relationship with your team, and your clients trust you not to churn for work.

  4. How to develop other people. Where do you teach them. Where do you leave them to sink or swim. Where do you throw them a life jacket. Where do you throw them overboard. As you move up the ranks, it's impossible to do all the work yourself, and you need to be able to work effectively through others and leverage large teams.

  5. And finally... how to communicate complex, multi-step ideas in a succint and actionable way. A mentor of mine once put it "Associates communicate activity, eg. we went on to CapIQ and pulled the comps and this is what it shows, while Partners communicate what it means, eg. you're trading below your peers and this is what you can do about it."

 
Best Response

One last thing I’d mention that may not be immediately obvious to the young’uns here, but.. if I didn’t leave banking, I would never have met my wife.

She’s a superstar and works at one of the white shoe law firms. Her family is awesome. Super smart. Born and raised on the UES. I met her because in MBB, my weekends were (largely) my own, so I was able to meet her at a friend’s party, and we were able to maintain a fairly predictable dating life — largely on weekends, none of which would have been possible in banking where facetime matters and time-consuming cosmetic edits eat up your time. We’ve been married now coming up on 2 years, and we couldn’t be happier. She has a heart of gold, and a spine of steel, and we’re excited about being parents together in the future.

PS. Holy Monkey Poo. I just noticed I’m a baboon now!

 

Interesting perspective. Our MBA professors urged us not to go into consulting. "Same hours for less than half the pay". I guess there are 2 sides to every coin.

My take on banking (at MBA level) is that people self-select out due to lifestyle or an innate urge to get married/settle down. In consulting, it's more common to get nudged out since it's a more popular field currently among MBAs.

I would advise any friend to pursue IB over all consulting jobs except maybe MBB. Even then, it's a tough call.

There is a shortage of talent at the associate and VP level with tons of postings nowadays and opportunities. If banking works out, one can retire in their 40s. Not so in consulting where you have to be in it for the longer haul.

Thanks for sharing. I hope it works out and seems like a good fit for you.

 

I didn’t realize there’s now a shortage of talent at the associate/VP level in banking. It sounds like the exact reverse of 6 years ago, when there was a glut of people at those levels slowly and methodically being pushed out.

My thinking of comp is that I think over a career, it normalizes out on an “expected value” basis. Yes, banking comp is higher, but it is also more volatile due to the comparatively low rates of survivorship and the difficulty of maintaining that earning level unless you do a clean lateral. If you take the fact that only 1-2 associates out of my entire associate class at the BB bank are still there and what they exited to (see prev post in this thread)... I can’t draw any other conclusion.

I’m fortunate that if we wanted to, my wife and I could also go FIRE (financially independent / retire early) in my 40s and maintain our lifestyle, as we made some gutsy and strategic investments during the crisis that paid off well. However.. I don’t think I would want to. What I like about my job is that it is mentally stimulating and I genuinely enjoy the idea of going to work and tackling new problems in innovative and exciting ways. I know its hard to imagine actually loving your job while I was in banking... but I do. It isn’t just repetitive busywork and jumping through hoops (see my comment from 6 years ago here) inflicted by sadistic senior bankers who can’t think ahead, manage their way out of a paper bag, have one iota of consideration for the ripple effects of the impulses, or think just because they were abused as cadets, it’s important to pass it on in the name of “building character”. And as long as it stays that way, I wouldn’t want to stop working, even if I could. In other words, what I do in my day job actually excites and energizes me.. instead of being something I just put up with until I don’t have to do it anymore.

 

Sounds like you made the right call - the economy is better now, but who knows how long it will last?

I know many MBAs who have made a great career in banking and couldn't be happier. They walk around with a smile on their face everyday and were happy to climb that mountain. Exit opps abound when you do great work. Some leave and manage their own money but many stay at the Director/MD level. Pay your dues, work hard, and hopefully luck shines on us all!

IMO, every high-paying profession is an absolute grind until about 7-10 +years in. To you point about lifestyle, I would not recommend anyone get married as a junior in banking. You will likely feel guilty constantly about free time. Navy seals also have a 90%+ divorce rate for a reason.... Probably the same with medical residents.

We all split hairs over which is the "best" profession when many people in America work 2 jobs (banker hours) just to make ends meet and gross $40K/year salary. Another example is accountants who grind hard during tax season (banker hours) but for 1/5 of banker pay. Most of us are extremely lucky.

 

I see things much more the way Feinstein and TheOceanizer have seen them (optionality has tremendous value - just ask yourself whether you'd rather be long a future or own a call option, and post-MBA MBB provides way more optionality than IBD does). That said, I'm glad that hardworkingmonkey is so hyped about post-MBA banking - someone needs to be, so that business schools and banks don't completely divorce each other.

Long story short, retiring from a BB in your 40s is not a thing, and a surge in Associate/VP vacancies is a red herring: what matters is whether there is net creation of MD positions, and there isn't, because client banking wallets aren't growing. Banks have been working their senior bankers hard just to defend revenue and ensure that investment banking is existentially justified (several years of Price:Book below 1.0x speaks to the market having serious doubts about the industry).

Thanks for the thread Feinstein. It's given a lot of people food for thought.

The truth is you're the weak. And I'm the tyranny of evil men. But I'm tryin', Ringo. I'm tryin' real hard to be the shepherd.
 

Well, I'm flattered that you found the conversation useful, although I wasn't trying to convince anyone :-).

I won't deny that there's a lot of brand value associated with MBB, but what I would solve for is the quality and nature of the work you'll do. I think of three extremes associated with consulting work: 1) high-level 10,000-foot strategy mumbo jumbo expressed in incomprehensible PowerPoint decks that gather dust in shelves, 2) "workforce augmentation" where you do the job of your client's employees who lack the skills / motivation to do it themselves, and 3) highly impact-oriented roles where you provide strategic and operational direction and coaching, and build the capabilities that your clients don't have.

Number 1 is what MBB is "stereotypically" known for (and there's plenty of this crap going on outside of MBB -- plus clients don't really value this much anymore). Number 2 is what the Big 4 and Accenture are "stereotypically" known for (and there's plenty of this crap going on in MBB). Number 3 is the sweet spot.

Solve for a mode of client service delivery that is aligned with #3 and you will build a portfolio of skills that will serve you well anywhere.

 

Good questions.

  1. Over time, my view of “grunt work” has changed. Yes, MBB is traditionally known for earth-shattering grand strategy that has the potential to reshape entire industries. But that is both a receding part of MBB’s portfolio AND a shrinking part of what clients desire. It used to be that MBB contained the secrets to industry benchmarks and privileged access to top knowledge, but the democratization of information (think CapIQ) and the fact that the F500 are all standing up their own in-house strategy teams who are MBB alums means that it doesn’t command the mystique it once did. Also, not much is more frustrating than killing yourself for several months, churning PowerPoint slides ad nauseum, and the presenting your 500-page work product to a client that a) is unlikely to act on it, or worse yet, b) doesn’t even understand it, and puts it on a shelf to gather dust. Or worse yet, use it to validate their existing thinking as part of internal political kabuki theatre. The reason I’ve rethought this is that the skills I want to build here are not pie-in-the-sky academic-style thinking, but ability to be a real, credible operational leader. If I were to interview for a C-level role sometime in the future, it’s way more meaningful to be able to say I’ve led large teams that have executed marketing & sales transformations that have led to $X billion of EBITDA impact, or I’ve led merger integration efforts between 2 S&P100 companies that had achieved $X million in synergies in the Finance function — as opposed to I can think strategically and here’s some PowerPoint. That being said, grunt work (as in “workforce augmentation” where you replace client workers who don’t have the skill or motivation to do something which needs doing) does suck, and I avoid those projects.

  2. It depends. Exits for principals aren’t cut and dry as not everyone is solving for comp. Some people honestly want the 9-5 job within driving distance to home in the burbs where they can BBQ every weeknight in the backyard with the kids, and I respect that. Others want to maintain the pace and earnings trajectory as long as they can. For me, the exit options that have been pitched to me span the spectrum, both in comp, and in lifestyle, from PE operating roles to startups to functional leaders at F500. It’s much more of a choice than your friend has perhaps discussed with you.

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