Significant differences in working at a low vs. high tier bank?
Hi everyone,
I'm an incoming IB intern at a bank that isn't well regarded on WSO (think Stiflel, WF, BMO, TD, Scotiabank, etc.). I am unsure about the significant difference between working at one of those banks versus the better ones when it comes to these categories?
- Compensation gap. Do you believe that a $100k (my bank's) vs. $110k (BB) base for A1 year really a big deal? Does compensation become vastly different the more years you work (VP salary at low tier vs. VP salary at a BB/EB)?
- Exit opportunities? What exit opportunities are harder to get into if you come from a low-tier bank? I know megafunds and most hedge funds for sure, but for someone interested in either doing PE/CorpDev/CorpFin, how hard would it be to break in? What would be the compensation gap in those fields (MM PE vs LMM PE), and if this makes a huge difference in your opinion?
- Alternative careers? Generally, IB pays better after graduation than most careers. But will I be making less money working at a low-tier bank than someone going into STEM, Med, Big Law, etc.?
I have these questions in mind because I thought that getting an IB role at any bank was enough for you to earn a great salary and have great exit opportunities. Coming from a non-target, I worked my ass off and was willing to accept an offer from any bank. I accepted an offer from a bank in NYC, heard for being a "lifestyle bank," cool/friendly/chill staff and I developed a close relationship with an analyst there. But now I have doubts that maybe only a handful of banks are worth getting into. Maybe this is the "BB/EV or bust" crowd way of thinking, but I just want to know if I'm screwed being at a low-tier bank for missing out big time on a significant amount of $$$ comp and exit opps. Thank you.
bump
The main difference is in PE exits, you'll have a much easier time breaking into a great PE fund from a BB/EB than you will from one of the Stifel/Greenhills of the world. PE from a MM is still super-doable as long as you don't mind settling for a smaller shop. At the Analyst level the comp isn't that divergent in IB between MMs and BB/EBs, even at the Associate level it's not a huge gap. Once you get VP and above is when the pay gets divergent between the BB/EBs and the LMM guys. Even then it's really only that pronounced at the MD level when you start getting paid as a function of group production. That's when the billion dollar M&A deals that the BBs work on actually start going to your pockets.
You're stressing way too much about it for an intern though. There's always FT recruiting and it isn't tough to lateral at all once you've got a year of FT experience. Unless you're dead-set on working for BX/Apollo/KKR or another megafund, I really wouldn't stress it too much. I'm at a MM and have ignored a lot of headhunter inbounds for BB/EB banks just because the better lifestyle makes it worth the ~$50K less a year I get paid than dudes at Laz/JPM. FWIW there are some MMs like Jefferies and Baird that pay on par if not better than the BBs at the Associate level. I think some of the BBs are actually known for being the last to increase junior banker comp.
Generally agree with these points but would just say even though they haven't trended that well, Greenhill is still much better than Stifel or any of the other names OP listed, at least at the analyst level. They place solidly well into well-regarded PE shops.
del
Solid answer, but Stifel and those other banks OP listed are not on Greenhill’s level. Greenhill’s exit opps are still UMM to MF.
Hey PM me whenever
your sa bank will not define your career, getting into a firm people have heard of is incredibly hard - especially from non-target!! that said FT recruiting is a smart play because imo everyone is super burned out this year and i think return offer rate will be lower (have heard mixed things abt effect of economy on return offer rates). also lateraling is doable. but if you like the place might as well stay there, will get better learning experience if you get along w/ the people.
What have you heard on return offers this year? I’m an incoming SA
The banks you listed have had multiple MF exits last cycle.
It’s not worth worrying about a minor difference in base pay or exits as an intern. I interned and returned FT (I accepted the first offer I got and was thrilled) at one of the banks you listed before lateraling to a BB for culture reasons.
Pay: Looking at 100 vs 110k misses the bigger picture. Sure, I got a 10% raise but when you did a little deeper, it really wasn’t. Meal allowance is lower, lower 401k match, discount for the ESPP is lower, etc. 10k after takes is closer to 7k. I’d look more at the bonus.
Exit opps: I would caution you for having this play a major role in determine your firm.
I’d focus on the people and the type of work when evaluating the firm because that will have a much bigger impact on how enjoyable your analysts years are. You aren’t screwed, you can always lateral.
Biggest differences between my old firm and my new one: juniors participate and speak on client meetings and communicate directly with clients, less pitching / more execution, and the people are friendlier
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