High Finance Outside of US
Recently came across an article stating this "No matter where you live, a finance career could earn multiples of the median household income in your country - although these numbers are much lower outside of the US."
Does a career in high finance offer the same ROI in Canada (or elsewhere) as it does in the US (tier 1 hubs)?
Personally can only speak for Canada, and the # of IB seats in Toronto is very very limited, even as a proportion of our relatively tiny population (less competition some say, debatable because numerator is much much smaller). Geographically US is also a capital magnet to surrounding economies, exporting away capital and financial activities. Not a rant, genuinely curious to what people think about this.
Is it me or is the upside modestly limited while downside just improves marginally, if any. What does people from Canada, UK, EU, APAC think? Does a finance career offer similar or appropriate return ($$), relative to the US, given the inherent risks (lack in job security, bad WLB, competition, etc.)?
In France, given how much you are taxed, it kinda makes less sense I think. I'm not 100% sure however.
I am from France as well.
When I look for compensation in Glassdoor, the spread is usually too big to get a proper estimation.
Could you tell me how much to expect as a first year analyst ? and if Canada is better.
Also, is the transition to the US easy at all ?
You're not taxed much more than in NY, in fine.
And as an analyst, you have a far better purchase power than in London (if you work for the same BB or EB, obviously). I know AN2s who bought themselves a flat in Paris, just this possibility makes it worth it regardless of the taxes
My company transferred me to Toronto/Bay St for a few years. While overall CoL and taxation were high, the answer to your question would be a yes. The average salary in that region is around the 47K CAD mark. I was above >150K. If you account for my gf's salary back then (joint), we had almost 600% more than the average salary in that region.
Yes, CoL is high in the GTA but you will realize that a couple where both partners are professionals will have an awesome lifestyle. Owning a house, having kids, two cars, etc is all possible if you work in finance, general management, law, medicine, biotech, tech, etc.
Is finding a job easy in that region? No, unfortunately not. But it is easier if you had time to build your network, study locally, are native in both languages, have your internships, etc. The more local expertise you have about the culture and people, the easier it would be. But I have also met professionals from all over the world who crafted a career for themselves after being new to Canada.
The question to ask is not whether GTA salaries are better than NYC, London or Zürich salaries - you have to see whether your investment of tuition/time and your personal goals are achievable in that region. And if you work in finance, I would have to say it can really work out.
Based on your data, lets just say Toronto's salary to CoL is on par with the US, pre tax.
However, Canadian HF/PE/VC would have a much much harder time raising funds that are comparable to the US, resulting in way less opportunities and likely comp.
There're probably only handful of actual HF in Toronto...
The institution I worked for was very international with a very global network. But your post would be relevant for other funds, yes.
I think that Canadian salaries are slightly lower than US ones, but due to CoL and taxation you would end up with less. The big surprise for me were the enormous heating bills and snow removal costs away from main roads.
A quick back-of-the-napkin comparison:
An analyst 1 in the UK makes about £100k all-in. The average graduate salary is £30k.
An analyst 1 in the US makes about $175k all-in. The average graduate salary is $55k.
Almost exactly equal as a multiple.
^makes complete sense. And then combine that with the fact that UK university costs 9k a year in tuition versus however tf much a target school in the US costs and the RR probably improves tbh.
Uh no most schools offer generous financial aid unless you're loaded. Also student loans are automatically forgiven after 20 years of payment (Obama era policy)
There are also relatively fewer high-paying alternatives in the UK. The top 1% income threshold in the UK is £160k. You'd expect to clear that as an Associate 1 (age 23/24). In the US, the top 1% income threshold is $400,000. That's a level you'd reach at Associate 2/3 (age 25/26).
In the States, there are other jobs that can compete with banking compensation-wise. In Canada, nothing pays as much as IB lol.
I'd say it seems even more rewarding in my region, compared to the US. I live in Sweden and the progression of comp in pretty much any other industry is insanely low compared to IB. For example, a doctor will have a starting salary of about $50k/year after 7 years of education. A surgeon won't even reach $100k a year. An engineer will get a starting salary of about $45-50k a year as well. As a mid-level manager you will reach $70-80k a year. People who are extremely senior don't make that much money either. I know people at some of Sweden's largest companies that are c-suite executives and regional heads. They make about $150-200k a year and these people are 45+ years old.
With that said, becoming wealthy as an employee is more or less impossible in Sweden, unless you are in finance/consulting/law. I would also say that WLB and job security is much better in Sweden compared to the US. Firing someone in Sweden is extremely difficult. IB salaries for first-year analysts in Sweden are around $70k base for Nordic banks and around $80k for the BBs.
Would you say comp figures for other countries in the Nordic region is broadly in line with those you've suggested for Sweden (in terms of doctor/surgeon/engineer/manager/ceo)?
I would say it is broadly in line, but with some deviations.
Pay varies slightly between the Nordic countries' and their respective dominating industry. The economies, or rather the number of employees within the economies, are small, meaning that certain industries will dominate in different countries. Denmark, for instance, has a large medical sector and the industry is competing with international behemoths, hence a doctor or surgeon working in these companies might earn a higher salary compared to other countries because they are competing for international talent. Norway and Sweden have a lot more engineers, working in O&G and tech, respectively (very generalized), and the salaries here are also higher than for those types of jobs. Finance and law at senior levels are by far the best paying professions, and a late-20 investment banker will often make more than a 45 year old CEO of a small/medium-sized company.
In my home country (SE Asia, not Singapore), (specialist) doctors are the highest paid professionals. Followed by lawyer. Specialist doctors earn tons more than hedge fund managers and PE folks here, most HF/ VC funds here are boutiques anyway and I could count them on my fingers. Same holds true for the other SE Asian emerging markets, high finance is just not a thing here and people, including regular finance professionals, don't know what it is. The regular finance professionals I mention are in corp/ commercial banking, equity research, some PE, etc, and think they're the best in the world lol because of Dunning-Kruger (again, they don't know high finance)
Not true for Singapore
Why do you think that is; ie. Why are there so few funds in that region? Is there a lack of trust in the legal protection of investors, or are there any regulatory hindrance for funds setting up in the region?
Good question, thanks. It's an issue that's close to my heart, because I love high finance and it's my country.
Short answer: Politics, intellectual capital, infrastructure, social norms and culture.
Want to start off the bat by saying, judging by the 'short answer' of politics, you'd know it's a complex multi-faceted issue that can't be generalized easily. I'd also be lying if I said I were an expert in geopolitics and economic development and thus I would know the full answer
I think it's easy to assume when living in the States/ UK etc whilst browsing WSO to assume high finance is this huge, widely worshipped industry, whereas the truth is that outside of the financial centers, it just does not exist in some geographies.
Firstly, corruption and nepotism isn't a well tackled issue here, so there's that. Many corporations are nationalized and the government sticks their fingers in them. Government contracts are a sleazy business to get so naturally the business environment is sleepy and sleazy. The few PE players here struggle to get by, the universe is also just small. Lots of politics
Then there's the culture in general, the good students never ever go into finance, they go into the traditional fields of medicine and law etc. Finance bros here are noticeably less intense. I had an informational interview with an equity PM of a large AM in my home country, she DID NOT KNOW what a stock pitch was.
Regulatory hindrance and lack of capital markets infrastructure too. The bond market is smaller than the equity market, just to illustrate. Probs won't say some specific regulatory barriers for privacy
All in all, it's well accepted that these high level service industries like IB, tech, quant, VC revolve around a tertiary economy that has the infrastructure to demand these services. Emerging markets have an extremely small ecosystem of these industries not out of choice, but because they literally haven't advanced to the stage where they would even need these services
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Great response, thank you for putting all that in writing.
I think your points around intellectual capital might also be mixed with the cultural aspect. I've studied and worked with people from all across the world, and working with money (in simple terms), seems more frowned upon in certain cultures. From my anecdotal and scarce experience, it seems that the more religious the country, the higher the emphasis on 'meaningful' careers. However, secularity and having a developed economy is correlated (the US being an outlier in that regard), so I may mistake correlation and causality.
I also find it fascinating how different the business culture seems to be in the various countries of South East Asia. I haven't been to all of them, but I feel like Malaysia seems to be much more influenced and westernized by their neighbours in Singapore when it comes to business, compared to countries like Indonesia or the Philippines, which seem to be closer to what you described. I've also been on site visits in Vietnam, working for some industrial products companies in the past, and despite being influenced by their Western counterparts, having friends in high, and preferably governmental, places seemed to make business a lot smoother.
. fuck the stalkers on this site. weirdos tracking comment history
No, I said that high finance is undeveloped for many SE Asian countries, including my own. NOT true for Singapore (and Hong Kong obvs), meaning that Singapore is obviously strong in this arena. You can just browse thru WSO to know this
And hey man, it's not all over after not getting your return offer. Plenty of alternative paths into your dream role, the path is never straight. If you're in Malaysia, you could definitely hope to make the jump to Singapore down the line and take it from there. Godspeed
Lmao at your comment history. Talking shit about ibankers because you couldn't get in. That says a lot about you.
How is equity research and PE not 'high finance'? High finance isn't just IB.
Here in the UK nothing besides commercial law comes close to high finance from a comp perspective. So even though London bankers make 'less' than in the US, the differential against other careers is so much greater here that it's still very worthwhile.
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