McKinsey Vs JPM

I’ll chime in and give a pro/ con for consulting versus IB since really that’s what this question is. McKinsey and JPM are both the best in their field. Sure, morons on here will hair split and make comments like Bain is better at X or “EB’s have better deal flow” , but as an experienced professional I am telling you everyone knows the training you will get at those firms is the top and there is nothing better in their respective fields.

Now, what is very different is consulting versus IB. Here’s a breakdown from someone who did IB and has worked with a ton of consultants:

The Same:

• Great Brand—prestige, B school ops, and you will learn an exceptional amount with a great network
• Great place to Begin a career—both these places are a lottery ticket in terms of starting a career and it doesn’t really matter where you end up. For context, Jamie Dimon started as a consultant, so whether you wish you be a partner at a consulting firm or literally run an investment bank, it doesn’t actually matter which firm you choose because you will learn through experience whether you made the right choice or not and you will modify and go to new firms and industries as time goes on.

Pros for IB/ Cons for Consulting:

• In IB, you facilitate transactions. This means you learn how to fundraise/ sell a company if you are doing sell side M&A or capital raises and if you are doing other advisory work you are learning about what a business is worth if you buy it (valuation). Now valuation you learn moves a great deal and is more of an art than a science, but what isn’t is finance fundamentals. Getting a grasp for how to look at a company and recognize that company’s financial position and help them organize their financials is unique to investment banking. Also, knowing how to build decks that demonstrate what makes a company unique and knowing what buyers or investors are looking for is a skill you develop in banking if you are good at your role. An ex banker could easily be a CFO and should have a solid grasp on financials, this isn’t always true for consultants and they might need to work to get this understanding.
• IB helps you learn the deal process and what occurs when a company gets bought from the different documents prepared and needed to timelines. Consultants won’t know what happens in a transaction from start to finish. This is why IB is considered a more linear path to PE. However, consultants bring other skills to the table that are valued in PE, so it’s kinda a wash. More on this below.
• IB is hands down faster paced and more intense than consulting. This is also a con that we will discuss below, but the role hardens you in a way consulting doesn’t. As an example, after my banking stint, if I stayed up until 2am working during the week I could wake up the next day and not even flinch. My consultant friends if they stayed up until 1am a single day, act like their entire week was destroyed. Or for another analogy, consultants that move into PE often find the adjustment tough and Ex bankers that move into PE usually find it to be an improvement to banking. IB has a culture that is mean and harsh that if you make it through allows you to face high pressure situations with intense and harsh bosses with relative ease. Consulting doesn’t give you a gauntlet of an experience in the same way that IB does. So really this pro in a nutshell is: IB is so shitty, you never have a job as shitty again.
• The number of hours you work in IB causes you to ramp professionally quicker. Things like PowerPoint, excel, and outlook and business etiquette are hard skills that just require hours doing mindless tasks to learn. In IB you can expect to work an extra 10-20 hours a week compared to consultants. So over a 52 week period, you have an extra 500-1000 hours. Now truthfully, there are diminishing returns to this in the sense that if you have worked 2 years in IB and 2 years in PE both likely are pretty fast and proficient in ppt/excel/outlook, but IB with its long hour days and late nights forces people to be absolute machines when consultants are able to get away with being slower and less familiar with the outlook suite. Also, IB tends to share excel and ppt reps when consulting is more ppt heavy.
• IB pays more than consulting 
• The work in IB can feel “more meaningful” in the sense that after you finish an engagement usually the world has changed in the sense that one company now owns another company or one company has capital it didn’t before. Consultants commonly gripe that they create decks presenting operational changes and those changes are never followed through with and clients don’t take their advice. Or, commonly a change was already going to happen and the only reason the consulting firm was hired was to come to a conclusion the company had already come to in order for some boss to have support for a certain initiative.

IB Cons/ Consulting Pros:

• The work is less interesting in IB. We can debate this ad nauseam, but facilitating a transaction involves a substantial amount of clerical work such as responding to emails and organizing and cleaning files in a data room. This makes much of the work in IB mindnumbing. Further, despite both consulting and IB being in client services, IB for some reason has a culture that focuses very heavily on unnecessary minute details. Being more concrete, it is my experience that senior individuals at an investment bank will obsess over the format of a slide for weeks and iterate again and again on slides that aren’t adding value or changing the outcome of a pitch or a transaction. In consulting, people talk about the Pareto principle or 80/20 rule frequently and try to not do work that has diminishing marginal returns.
• IB’s culture is unequivocally so much worse. I think self selection occurs where the smart people who want to prove how hard working and hardo they are pick IB and the people who are smart, but aren’t in a race to prove to the entire world they are the hardest working hardos choose consulting. As a result, the people in IB generally have sharper elbows (worse team players and so competitive they will try to harm you to get ahead) and they don’t have external hobbies. In consulting, people commonly have a life outside of work and employees might ask what you did over the weekend, in IB no one asks about your personal life and from my experience most employees don’t have a personal life because they work during 90% of their waking hours. Consulting seems to have a “everyone is a friend here and let’s gather around the fire and talk about culture” vibe. The best culture part of investment banks is junior employees bonding over their terrible treatment. 
• Horrible bosses—IB has, without a doubt, the worst managers of any field. Because junior level employees are paid so highly, the opportunity to learn is so great, and a large amount of compensation is tied up until your bonus dates hit after which everyone leaves, IB managers can act like complete assholes and not be afraid of individuals quitting or putting out bad work. The behavior of bosses in IB from swearing at employees, to lack of consideration for reasonable hours, to providing feedback in not constructive ways wouldn’t work in any other industry because people would quit. Also, because employees turn over so commonly, the hierarchy is so rigid, and the culture so broken, bosses don’t learn. As an example, my old bank had a VP that caused 4 junior employees to have a mental breakdown and/or quit randomly. This employee continues to move up and wasn’t reprimanded in any way. Bad managers in IB aren’t scolded because the hazing ritual of the field is something anyone senior in the field went through and they believe it is a right of passage. Also, the people that are senior in IB are people who experienced how twisted the field was and are ok with it otherwise they would have left like most analysts and associates do. As a result, you are only left with the hardest of hardos trying to prove to everyone they are the hardest of hardos and they have 0 empathy for others. 0 empathy means you are a shit manager. An anecdote, I got the Flu in IB and my managers said that wasn’t an excuse to take time off. I had a friend in consulting who broke his arm and 2 months after the incident his managers were telling him it was ok if he needed to lay down and take breaks during the day. From an IB perspective hearing that story I was like “WTF?”, but that’s a manager trying to express to their junior employee they care about them and want them to be healthy.
• You don’t learn soft skills as well as consultants in IB. In IB, you are mostly working with other IB professionals, PE professionals, or the CEO and CFO of a company. This means all your interactions are with very intense people and there needs to be less explaining of concepts to less sophisticated people which for context really is what soft skills are. Most managing jobs you need to take your knowledge and explain it in a way that less sophisticated people can understand. You don’t do this in IB at all really. Consulting this is basically the whole job.
• You don’t really learn strategy in IB or how to operate. Consulting is commonly being presented a business’s operational problem and working with a company to solve the problem. As an example, “what should our marketing strategy be? Should we go after big customers, small customers, etc.?” 
• You don’t learn how to really do diligence on a company’s place in the market and how an acquisition would play out in practice in IB. Things like expert calls and actually understanding the integration of two companies and whether  merger would make sense operationally isn’t really what you do in IB. Yes, you have diligence calls in IB, but they aren’t focused on the company ‘s operations as much as the company’s financials and maybe some key interest areas.
• I think along with consulting being more interesting work, it makes you a better critical thinker. So much of IB is just processing documents, organizing things, or presenting a business in the best light to get sold, so you don’t get ambiguous questions that are difficult to solve. Again, things like “what is this companies marketing strategy? or what customers should they sell to? Or should they make an acquisition and expand into an adjacent market?” Are all very complex questions that require critical thinking and you just don’t get this in IB. Really IB has one question: “why should someone buy this company?” And to answer that question you need to prepare a great deal of deliverables that there is an obvious right answer. An example being getting a financial model complete. Sure, the assumptions aren’t obvious, but actually building a functioning financial model where you can play with drivers and the big assumptions has a correct answer. 

My advice, think about your personality and career goals to decide which path is right. As a general rule, all my consulting friends were happier with their jobs than my IB friends, but the IB friends earned more. The IB friends are harder workers, my consultant friends are more intelligent. 
 

Career Paths where IB is more relevant:

• IB
• Private equity, Growth Equity, Venture Capital
• Any other type of investing (Real Estate, Public Markets)
• CFO or other finance roles (FP&A)
• Corporate development (basically you are the acquisitions guy for a company)

Career Paths where consulting is more relevant:

• Every other career where you aren’t investing or in the weeds of financials
• Some PE roles prefer ex-consultants if they make heavy operational changes. That said, most of the time PE firms send these changes to consulting firms.

Lastly, repeating again, know your choice really doesn’t matter that much. Either path you take, you will like parts of your job, hate other parts, and you will learn. After a few years, you likely will go to a new role and if you start at either of these firms and hate it you can switch to an alternate path fairly easy. Good luck!