Reasons to Stay in IB Longterm?
Curious as to why some of you stayed in IB longterm? Buyside not as interesting? Better compensation? etc…
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Career Resources
Based on the insights from Wall Street Oasis, there are several compelling reasons why individuals choose to stay in Investment Banking (IB) long-term rather than transitioning to the buyside or other fields. Here are some key points:
Solid Reputation and Internal Promotion: For those who start as analysts and get promoted within the firm, there's a significant advantage in terms of reputation. Being promoted to an associate often means your team already sees you as playing a role similar to that of a vice president. This internal recognition can lead to more responsibilities, autonomy, and respect within the firm.
Improved Work-Life Balance Over Time: As professionals progress in their IB careers, they often find that their work hours improve. This is partly because they become more efficient at their jobs and better at navigating the group dynamics. They learn how to get involved in the best deals and work with the best people, which can lead to a more satisfying work experience.
Intellectual Stimulation and Learning Opportunities: Despite the perception that IB work can be monotonous, many find it intellectually stimulating. The opportunity to be involved in significant financial transactions, understand the intricacies of different industries, and work closely with senior executives and clients provides a continuous learning curve that can be very rewarding.
Financial Rewards and Career Progression: The financial incentives in IB are well-known, with the potential for high earnings through salaries, bonuses, and promotions. The clear career progression path within IB also offers a sense of security and achievement that might not be as transparent in other fields.
Building a Strong Professional Network: Working in IB allows individuals to build a vast and influential network. This network can be beneficial for personal growth, future career opportunities, and gaining insights into various industries and markets.
Passion for the Work: For some, the decision to stay in IB is driven by a genuine passion for finance and the nature of the work itself. The fast-paced, challenging environment of IB can be exhilarating for those who thrive under pressure and enjoy making impactful financial decisions.
These reasons highlight why, despite the allure of the buyside or other career paths, many choose to build a long-term career in Investment Banking.
Sources: Associates who started as analysts: Why did you stay in IB?, The Allure of Investment Banking, Q&A: Senior VP in BB M&A (London), https://www.wallstreetoasis.com/forum/investment-banking/goldmans-new-policy-for-investment-banking-analysts-3-reasons-why-it-wont?customgpt=1, So Much Talk About Exits: What About Staying
Believe it or not - I actually really enjoy the lifestyle and find the work interesting. I knew I wanted to do this long term when I came into Banking, and was not like 99.99% of the dumbass kids today (esp. on this site) that are dead-set on PE.
Thanks for the insight! Yeah I don’t think PE is in the cards for me and am thinking about doing IB for the long haul. I find it interesting that so many people only go into IB just to exit into PE. I understand genuinely being interested in PE over IB, but I personally only see PE as marginally better (in terms of hours, comp, etc.)
Considering he's in Rx, he will be making more than $1.5M as an MD lil bro
Both of you had dumb posts but just want to point out that you are overestimating the multimillion dollar carry checks thing. If you don't believe me, head over to the PE forum.
how do your hours look like? have you been able to start a family?
So far it's been around 80 max, but my Wife and I have decided we are not going to have kids, and she's at McKinsey, so we're happy with our current lifestyle.
As shocking as it sounds, my wife works more hours than I do (and she has to travel more)...
Why even work that much if you don't want kids, IB money not needed fr
.
Do you think it is more common for RX bankers to stay in banking beyond the analyst and associate years?
I think the biggest challenge is that kids these are so driven by prestige so if “PE is hot” then that’s what they want, so they won’t stay in IB.
Similar issue with PE in that once people learn what it actually is, they’re gone to something else that’s “hot.” Need some sort of incentive outside of $$$ to retain talent.
Money still talks but people care about more than just that these days.
You’re risk adverse
Averse*
bump, pretty interested in a real response to this that could be said in an interview
I’ll give IB this - if you just wanna grind and save money for 10 or so years, and then move to something much lower stress like corp dev or CFP, than the immediate cash comp in IB is tough to beat. I know this path isn’t super common, but I think for people looking to trade their 20s away for a more relaxed mid-30s onward, IB can do that, whether or not that’s “long-term” as you define can vary
This is exactly where I am at now. Glad I did it post-MBA -- learned a ton, did some cool things, paid off loans, and saved some cash, but ready to do something else.
As someone who hated banking, here are some of my (mostly) unbiased views on the pros of long-term banking:
Risk-adjusted returns. If you start banking your bonus from associate and assume you hit VP by 30, you have a pretty decent path to $15+mm net worth by mid-50s. If you're a rainmaker, that can be easily higher. A strong banker but not a top 10% killer can get to $4mm / year comp at a BB or BB equivalent. It's much easier getting to that 75% percentile MD comp than to being a PE partner that makes twice as much. Plus if you have high EQ and people skills not commonly associated with strong Type As (ie the really good analysts who made it upwards but now lack EQ, which is pretty innate rather than learned), you'll find it that much easier to succeed as an MD. These type of bankers end up at EBs often and they can pull a LOT since their comp is directly tied to fees.
How do you deal with balancing delayed gratification vs enjoying life? Working until midnight into your 40s can lead to missing a lot. I’ve considered staying in banking but this is a big consideration for me.
Great question - my hours have reduced to around 60 when it's busy, as a junior director and like 50 when it isn't. As a VP it was 60-70 and 70-80 as a junior. So not a sweatshop model but equally making more BB than EB money. I have an extremely supportive senior team and it's generally very non toxic so I'm happy to give up the 20%+ in pay for being one of the few people I know in banking who really likes my job.
What I like:
- Really enjoy dealing with clients, C-suite, boards and the people / ego management aspect. Building consensus is hard but super fun
- Love the hustle involved with finding a name, building a relationship and pitching / winning business
- Getting creative for idea generation involves lots of reading and research, keeping a pulse on risk appetite and the markets. Really satisfying when a thesis comes together and resonates with a client
- Probably just me but I like managing process and negotiation. Keeping pushy buyers looking for an info edge, parties trying to preempt process, filtering out those fishing for info while managing impatient clients, boards and just generally keeping everyone in line. It's part carrot, part stick and always fishing for leverage. Fucking love that shit
Things I dislike:
- There is a constant underlying stress that comes with revenue generation. There is nobody to staff you, tell you what to do, give you direction and the like. The thing that matters is $ brought in. The stress of making sure your firm is not blanked on deals, always thinking of how to get to the next pay point is constant and just something you have to learn to live with
- Certain types of clients who demand advice/service and never listen, never pay up and are just time and resource sinks. Some of these you just have to live because of size and stature and I hate dealing with those. These are generally the ones you ping you on a Friday aft for materials for a Sunday or Monday meeting. Fuck them
Feel like the stress factor is at play on both sides of the fence (IB/PE) just for different reasons.
It’s probably worse on the buyside . There’s getting capital deployed, managing portcos through cycles and generating return. Plus managing LPs.
MD+ at top EB(evr,cvp etc) or Group head+ At BB = Valhalla of m&a practice. If you can't see your trajectory ending their for whatever reason, banking isn't worth it.
(MD's at most ebs take 25% of fees vs the bb blackbox pay structure)
probably highest paid job with highest job security. most people who stayed in ib probably outearned people that left for buyside and then either got churned out or chose to do something different. i'm pretty risk averse and sometimes think about maybe having stayed in banking LT (have been pe/hf 10+ years so has worked out okay, but most churn out within 5 years).
docs make a lot of money too, but takes til mid 30s to start making bank.
when I was considering it I think I wanted all my pay super liquid like all cash (i think RJ had stock options or something similar but those to me were just like "if they turn out to be useful great"). Looking back on it Im not quite sure what i would have done with all that sitting in the bank -- idk new car new house and mortgage buy out the apartment I used to live in as a forever home that depends on your personal life. Also obviously I could have started my own "fund" and just like invest/trade by myself make a boatload of money then throw all my assets into appropriate accounts with multiple brokerages (assuming I stay long term in America right). Financially it was attractive in that way versus carry or whatever in PE/ F500.
Then there's the relationship aspect of it. I mean what do they fuckin ask you first question if you're SEO: what does an investment banky wanky do? Answer is middleman-ing deals and facilitating transactions at a complex level. I felt like surely I would have gone to JPM/GS after RJ for the brand name and platform, done 2.5 years-ish as an ASO and then bailed to a place like MTS, CVP SF, or some type of family office HC shop where the egomaniacs would have left me alone and the lack of structure would have allowed me to pull off more adderall induced strokes of genius. Give it 10-15 more years suddenly I'm worth $50m and super well respected & connected in the business world (read between the lines: no one dares to backstab me). I then take my ass back to any BB besides the dumpster fire that is DB and then just come into the office 4 times a week to pat out my rolodex until im 65.
What's SEO?
diversity programme
thanks for the shout out
cannot find exits
I’m in between giving IB a shot for >2 years or recruiting for a PE associate position. Should every analyst give PE a try? What are the options for moving back into banking if you end up liking it better?
Relatively easy from PE back to banking. But most people would just go to a smaller less prestigious PE shop than back to the hell of banking
Isn’t LMM PE comp relatively poor compared to IB at mid-senior levels (VP, Principal, etc.)?
I am a cheesy tool who likes food and booze
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