Pros and Cons IB vs PM

I already got flamed pretty hard for my last post about IB on this forum, but the overall experience was pretty fun so I thought I'd share the pros and cons list I made for banking vs product management. This is a personal pros and cons list, but it may help any of you else out there who are debating this and are unsure what to do:

Investment Banking:

Pros

  1. Around 10% of your graduating class (target school) is going into Investment Banking out of college, and most other schools don’t send nearly as many graduates so you might be wasting a once in a lifetime opportunity by not going for it
  2. You’ve grown to love finance and investing
  3. You are okay working tirelessly without complaint, and like the idea of staying at the office till late with your coworkers getting your dinner paid for by the office. Spending long hours creating aesthetically pleasing PowerPoints and inputting data into Excel actually sounds a little fun
  4. As of 2020, it is very unlikely for you to be hired in a Private Equity role if you are not in Investment Banking
  5. As you get older, it is going to get harder and eventually impossible to break into banking and/or finance
  6. It is the path that risk-adjusted will most likely make you wealthy
  7. Quote from Reddit, “Banking is a much smaller world and you'll get exposure to really senior people in industry and your peers will go on to be successful in a wide variety of industries. It's simply a better platform from which to build a career.”

Cons

  1. Your uncle, aunt, and friends all said you shouldn’t do it. Your uncle and aunt have a lot more experience in the world of finance than you do (Managing Director at a HF and Portfolio Manager at an $8.8B AUM HF), and you know a lot of your intuitions tend to be incorrect while your friends would only disagree with you if they really meant it
  2. You learned in the Science of Well-Being that you should reconsider working in finance or consulting as the data shows it will generally make you unhappy
  3. Transitioning from Investment Banking to Product Management can also be a very difficult task
  4. The environment will be very toxic (as you learned from alumni at your school who interned in banking their junior year and then decided it wasn’t for them)
  5. If you move to Private Equity, the work will not be much different (and at MFs the exact same), and it will be substantially harder to get promoted
  6. After COVID, Investment Bankers could see 10-15% cuts in their salaries
  7. You will get very little sleep and always be on call for work, often on weekends as you learned from a banker you spoke to recently
  8. You will always find people with ADHD on trading floors rather than in Investment Banking: Investment Banking involves big projects, attention to detail and the kind of long slogs that ADHD people struggle with.
  9. You could get bored doing the same thing everyday

Product Management:

Pros

  1. While only a few students from your target school are going into product management, you really admire those who are for their accomplishments and charismatic nature
  2. You’ve always had a strong interest in tech
  3. Without relevant experience, convincing a company to give you a chance as a Product Manager is very difficult
  4. As you learned in your Hedge Fund course at school, nearly every Hedge Fund is transitioning to being more algorithm-driven rather than research-driven, so a job where you build strong coding skills rather than strong finance skills might prepare you better for the future
  5. PM’s are looking for a jack-of-all-trades, which fits your personality type as you love to learn about a lot of different things rather than focus 100% on a single task
  6. You will have a lot more time to spend with friends, loved-ones, excel in Product Management since you want to work so much and pursue side projects as well as build your skillset (not to mention sleep)
  7. Moving to Venture Capital from Product Management is possible (Typical end goal after Private Equity)
  8. Many say they haven’t met a single PM who didn’t like their job, and few leave for other jobs
  9. The environment is very collaborative and a good fit if you enjoy teamwork and communication
  10. Quote from Product Manager with lifelong ADHD issues, “You are going to be constantly trying to figure out what you should build next, so you’ll never be bored. You’ll always be busy and you’ll never be standing still, every day will be different.”

Cons

  1. Compensation will be less starting out, and will take a while and be less likely to catch up to bankers even at a top firm
  2. Have to accept an uncertain advancement path.
  3. In an entry-level role, you might essentially just be a junior marketing person
  4. Responsibilities are not very intriguing at the junior level
  5. The role is not very glorious, you will often be working on a small aspect of a product and its functionality
  6. You could get bored not working 80+ hours/week
  7. You could get jealous of your many classmates who would be making a lot more than you do for a long time and maybe always after college

Thanks for letting me share with you, please let me know if you think any of this information is incorrect or skewed in a certain direction

Career Advancement Opportunities

April 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. New 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

April 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

April 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

April 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (205) $159
  • Intern/Summer Analyst (145) $101
notes
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