IB to FP&A
Could someone share insight to the transition to FP&A from IB?
Do you transfer in at same level? (2 years experience in IB = associate when getting to FP&A, or are IB years worth more?)
Is it common to make jump after analyst stint? Or is it very doable as a VP? Asking to learn more about optionality if I stay beyond analyst stint.
What is comp trajectory / time at each promotion level? I’m sure it’s depending upon place you’re at but a general expectation would be appreciated.
Thanks.
I think typically from what I have seen, your IB years will be worth about 1.5x in terms of experience for an FP&A gig, but keep in mind that titles at companies (especially outside of a pure corporate development group) will vary company by company (i.e. at ExxonMobil, you are an "analyst" until you are put in a supervisory role which could be anywhere from 6-15 years depending on a variety of factors).
Comp progression in FP&A (and any corporate role in general) will be considerable slower/flatter than that in banking. The tradeoff is the WLB obviously, which is worth something (how much is ultimately up to you). I think typically you'll see the highest number of people go from banking to FP&A after their analyst gig because at that point the lifestyle creep hasn't fully impacted you yet. Once you're a VP and making 500-600k/year, likely have a mortgage that needs that level of income to service, etc. Obviously easy to say that you'll be smarter than that, but it happens.
In general in corporate roles I would expect an annual 2-3% COL bump and then an additional merit bump that can range from 0 (both due to performance or company performance) to 10%. You're not gonna be rich and retire at 40 (unless it's a start-up with equity situation) but when I used to do the OCR for a large corporate we called it the "get rich slow" program.
Thanks for the great response. I get how the handcuffs keep most after their analyst years but let's say a third year associate or something jump ship. Assuming the 1.5x experience multiplier he's coming in with 8-9 years under his belt in their eyes. Is it realistic to say he will fine comp around 250k all in when they lateral? Totally get this is a stretch of a question, just trying to figure out what an associate or VP jump would look like.
I think that is likely a little rich. For context, I interviewed and got an offer for a Corp Dev role (so not apples to apples, but you can extrapolate) with about 7 years of progressive work experience and a MSF. I was not a banker, so I would be using my actual tenure which isn't that far off from the sped up tenure of someone coming from banking. My offer was $125k base, $40k signing, 5-12% annual bonus, and a 401k/pension. Now this is in an industry that is notorious for it's limits on G&A, but 250k seems like a lot.
For context, I turned the role down.
Have not really seen the exit at the analyst level - moreso for post-MBA associates
What I think most people miss in this forum is the fact that if you're working in FP&A or Corp Dev for a big company, you're paid about the same as any other corporate role. As somebody who has done both and exited to banking I'll say no wlb is worth doing those jobs for sub-par pay. Sure there might be some M&A machine, high growth companies that pay a bit more than average, but in general, those jobs are dead-ends as you wait for the top guy (who only has the job because he spent 10+ years in banking, ironically) retires, only to not get it because there's another banker exiting to the role.If you have SVP experience you can get those cushy, decently paying roles, but if you're an SVP in banking, why leave to make a small fraction of your comp? That experience is what it takes to get the cushy role, but the cruel irony is it makes little sense to do it.
My entire career has been FP&A. One of my CFO’s wouldn’t hire bankers. I think bc he had an inferiority complex, but yeah, no bankers.
I worked with a former BB banker who left at the beginning of his 3rd year as an associate and is now a Finance manager (late 20’s, around 7 YoE) doing FP&A for a specific division of a $3B company. Makes around $150k which is around market for FP&A managers, but it’s also dependent on company.
I would expect a banker with 2 years of experience to come in as a senior analyst at most companies. Typical FP&A managers have a minimum of 4-5 years of experience at the low end. Have seen lots of young 30’s too. Remember, FP&A isn’t a get rich quick career. These guys make low 6 figures working a 9-5.
FP&A is not complicated. I’m sure banking trains you well in excel and PPT, but there is a certain “nuance” in learning how to spin the numbers if they aren’t exactly what management wants. Not rocket science but I am leaps and blinds better at P&L management than I was even one year ago.
So, after 2 years I doubt you are a manager at anything but a smaller company. Most firms are Analyst 2 years, Senior Analyst 2-3 years, Manager. Then it gets much more difficult to become Director. All the directors I’ve worked with had minimum 8 years experience (except 1, which was nepotism).
Lots of companies have several FP&A managers who act as an analyst for one division. Going back to experience, much more effective to have a guy with 5 YoE in FP&A work with a division head than having an analyst who is green.
Director is typically where the money begins to separate itself. Think $200k+ with performance bonus and possibly stock options.
Now, a large F500 will have FP&A units for each division, and then a corporate FP&A team. Corporate team usually makes more. Each individual unit may have a “Director of Finance - xyz Division” making say $200k. They report to maybe one singular VP of Finance. Think $300k+.
Your IB skillset is probably more appreciated at a smaller high growth company (Either PE or VC backed). Bigger (F500) companies probably want to hire candidates who have prior FP&A experience at other firms. With that said you can certainly transition but will need a clear reason why you want the move because it is not as typical as IB -> Corp Dev. The longer you stay in IB the harder it is to move to FP&A.
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