The Future of the Banking vs Consulting Skillset | Debate
I wanted to revive an age old debate here. I can't help but feel the traditional PE associate recruiting process will drastically change once AI automates what is needed to be done at the junior level.
The IB analysts are sought after for PE because they are trained in transaction mechanics (building models, running valuation analyses, structuring debt, managing deal processes). At the junior level, this execution-heavy skill set fits well with the associate role. As AI tools improve, this will all become commoditized. The traditional advantage of the banker will simply become obsolete in my opinion (would love to hear from those who disagree).
I can't help but feel the consultant's skill set will be much more valuable within a private market investing context. They are trained to diagnose businesses: assessing competitive positioning, pricing power, operational inefficiencies, and growth levers. In a world where AI can automate the outputs of the typical PE associate, the edge shifts toward those who can interpret, challenge, and synthesize that output into strategy. This is going to be the consultants. Even if the role of the IB analyst evolves with juniors taking on more traditionally associate or VP-level responsibilities as automation absorbs basic modeling work, the core orientation of the role remains transaction-centric. The skill progression still emphasizes execution, structuring, and process management.
By contrast, consultants are trained earlier to think in terms of business systems: pricing architecture, cost structure, competitive positioning, incentive alignment, and operational scalability.
In other words, even as banking analysts climb the responsibility ladder faster, the foundation of their training may remain narrower than that of consultants operating within portfolio strategy and transformation.
Thoughts?
Bump
Bump
Don’t you ever wonder why you never see any senior professionals with >5-7 years of experience make these asinine takes? The execution act might be commoditized but that’s not why PE professionals hire juniors. The fact that you can model is a proxy to evaluate if you can think. No amount of AI will save you if you can’t explain, flex, rebuild, and defend any model you bring in front of a committee with edge cases and non-obvious data coming in real time.
You think that the ability to model is proxy for ability to think? Or you think it sets the base for the ability to think? Would strongly disagree, would agree a little on the latter. bankers are known to be executors and work horses, not thinkers. PE hires bankers because they can execute the gritty work. These models, or the explanation that goes into MOST of these line items, are not insightful at all. This will most certainly become commoditized by AI. Anyone with half a brain can explain why a certain line item is the way it is… it is all a fugazy anyways - any sort of customization will come from genuinely insightful analysis from more higher ups. It will all be a game of creative and strategic thinking. Any sort of interpolation/mild extrapolation of a data set is going to be obsolete in 5 years. That is all that goes into a model. No offense but PE doesn’t go after bankers for their insightful minds lol
You definitely just outed yourself as a college student that has exactly 0 days of real life work experience and has no idea what they’re even talking about lmao. Let’s break this down:
1. “You think that the ability to model is proxy for ability to think? Or you think it sets the base for the ability to think?…bankers are known to be executors and work horses, not thinkers.”- Literally what the hell are you on about. “Bankers are not hired to think”, do you legitimately believe that investment bankers are paid *tens of millions of dollars* to “explain why an Al model did x to y line item”? That’s not even a workstream, in fact I bet you can’t name 5 real life diligence analyses you’d run on a sellside transaction or carve out that isn’t already spelled out on one of the Top 5 “Steps in a M&A Process” blogs at the top of your Google Search.
2. “ Any sort of customization will come from genuinely insightful analysis from more higher ups. It will all be a game of creative and strategic thinking.”- Newsflash bud, that’s what bankers are actually providing in those client calls. The decks, models, analyses are just fodder for a 60+ year old silver fox to talk shop after advising 25+ years of transactions in the same industry. How do you think pattern recognition and differentiated insights compound over time? You think your basic Wall Street Prep 3 statement model that Claude can make is where the alpha is? Do you think those are the analyses real bankers submit to clients?
I’d be open to a real debate about what’s in the purview for AI disruption vs. what’s not, but you obviously don’t have the range to have a critical discussion about the difference between low level tasks and higher end strategic insight. No models in banks are “cookie cutter” when wrangling the mess of customer data. Has nobody even considered that AI enables investment banks to do *MORE* analysis, service *MORE* deals and therefore either keep headcount flat / increase headcount? Yknow the trend that has been the case since the beginning of the industry through every major technological disruption to date? Nah, Goldman Sachs is just gonna fire all their juniors and run 1 man billion dollar deal teams - got it.
You AI doomer dimwits annoy the crap out of me.
You definitely just outed yourself as a pent up incel turned banker. Relax buddy it’s a random opinion thread take a deep breath !!!!! You’ll be ok. Let me get back to you on that essay tho. Try to relieve that WSO induced stress in the meantime.
ratio’ed lol
Sorry had to fire up Claude now I can respond... here you go:
"the base for the ability to think?…bankers are known to be executors and work horses, not thinkers.”- Literally what the hell are you on about. “Bankers are not hired to think”, do you legitimately believe that investment bankers are paid *tens of millions of dollars*"
what am I on about? I was talking about buyside recruiting. What are you on about? I am not arguing that IB is a thoughtless industry. Although there are some interesting convos to be had there. It seems like you took a big tangent here and went outside the scope of what I was talking about. Investing banking ANALYSTS are not hired by the buyside to think, was my point.
And your point 2 basically reinforces my argument - PE firms are not hiring 22–25 year olds for their 25 years of pattern recognition. They’re hiring them because they can reliably execute under pressure with minimal training, build models, manage data, run analyses, turn comments quickly, and keep a process moving. The senior banker “silver fox” insight you’re talking about is not what differentiates IB vs consulting talent at the buy side associate entry point. The differentiation has always been execution readiness. Now you agreed with my earlier point - "the execution aspect may be commodotized"... now, let's think logically here. If AI reduces the time it takes to get someone to that execution baseline, then the question becomes: what skillset is relatively more scarce? It is extremely plausible that candidates trained earlier in commercial diagnosis and business problem-solving become more competitive than they’ve historically been.
And then your whole rant about 1 man teams running billion dollar deals is just out of nowhere, of course, so I won't need to acknowledge that. Once again this is about buyside recruiting, not the future obsolescence of IB as a whole. But again that is an interesting convo. If you are interested in my opinion, I think that for the megacap, complex transactions, these definitely justify large, specialized teams. I think outside of that, technology and process improvements will absolutely reduce the marginal need for labor over time. But that’s a different discussion from the buy-side recruiting point I’m making.
Your response is emotionally framed and you are arguing against a much more extreme position than what I hold.
Yes, models are not cookie cutter in practice. Yes, technology often increases throughput rather than cutting jobs. Yes, senior banker insight compounds and matters. But literally none of these refute my original argument about recruiting. My argument is this: AI reduces the scarcity of execution skill, so PE is going to value other skillsets more. Is your argument that execution skill will remain complex enough that IB training stays dominant?
Because that is an interesting point of contention that I would love to hear more about from you. But I do not think your points refuted what I said.
You can call me an AI doomer dimwit all you want, but why would increasing the productivity of junior bankers result investment banks hiring more of them? It’s not like M&A deal flow is restricted by the investment banks’ capacity to do deals. They’ve always hired more bankers when needed and then fired them when not needed (re: the 2021 hiring spree). Even if some of the top banks are able to hire extra junior bankers and do more deals they wouldn’t have done otherwise, they would just be stealing deal flow from their competitors, not creating novel deal flow. That means their competitors would have to start laying off their own bankers in that case.
These tools are far from capable of doing these models 100% every time including capturing the exact structure that the builder is looking for. If you cannot audit them and correct / restructure as needed, ie you fall victim to skill erosion, you won’t add value to any buyside engagement / institution.
People are missing a few things.
1. Analysts and associates are just a rounding error in the scheme of banking costs (or even MFPE). My entire pool of analysts and associates (20+ who are paid decently above street) made less in total than my highest paid MDs individually this year. It makes no difference:
2. My biggest constraint is processing time and bandwidth.This limits deal capacity and idea generation. If AI can increase processing speed. I can underwrite to meaningfully higher revenues in my team and will need more people not less.
3. If analysts and associates were Fred up from doing model monkey work, there are a ton of more productive ways to fill their time. The models and the PowerPoints are necessary evils, not the reason they exist.
Consequatur dolore est qui modi doloribus et facilis. Dolorem laborum dignissimos adipisci voluptatem. Recusandae doloribus perferendis nihil quia. Voluptatem assumenda aliquam sed.
Et sed doloribus blanditiis qui. Nesciunt possimus et eos aut.
Dolores facilis expedita natus quisquam itaque officia. Est maxime dignissimos odit vero id.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...