Why are IB analysts so butthurt over CB?
I'm struggling to figure out why exactly CB gets a bad rep since tbh it seems like a much better deal. Same base at most banks and although it's a lower bonus the hours/bonus tradeoff seem to be much better. If you're getting 40-50k from Citi (2023 CB Bonus discussion) working 70-80 hours/week max that seems much more sustainable than 50-75k (bonuses I've seen on here) working 90-100 hours/week. I've read work is boring but IB is just rearranging PowerPoint logos too so it just seems like the pot calling the kettle black. I understand the largest argument is "exit opps" but considering most people never make MD and just end up in corp dev wouldn't it be smarter to just build a career in CB where you make more? I'm not trying to be petty and I know this post will probably get a lot of MS but I'm genuinely confused.
People go into IB for the training and to open doors. Nothing is wrong with CB but it's not a super ideal position to begin with unless you are really to make it a career. Most successful people in finance didn't come from CB.
the "open doors" thing is what prompted me to make this post. From what I understand only a small portion of analysts get PE associate roles and even then you get pushed out the door in 2 years. Similarly, HF roles also seem to have high turnover. From there most seem to end up in a corporate role. If this is the end goal for 90% of analysts regardless, the lifestyle/mental health/ borderline indentured servitude just does not seem remotely worth it.
I'm not certain which groups/banks have only a few analysts securing buyside positions, but a majority of my class (who actually wanted) attained seats at reputable firms. I agree with the idea of avoiding burnout, which holds some true for PE/HF roles, but the scope of exit opportunities extends beyond just these two sectors. The primary purpose of pursuing these paths is to gain exposure and genuinely discern your passion, facilitating a well-informed future career decision.
I'm inclined to disagree with the notion of sticking with CB for the long term solely because it offers comfort/good pay . Most individuals will cultivate other interests and wish to explore them, a transition made smoother by commencing in IB. Many of my friends have opted for GE/VC, which has a lower turnover and burnout rate (if you were to do CB, getting these seats would significantly harder). In my case, I'm pursuing PC, and I foresee minimal burnout potential in my chosen lifestyle; any switch would aim to delve into alternative interests (cb -> to pc is a common path so not saying cb would make it harder to break into pc).
Even obtaining a prominent corporate role becomes more feasible with an IB-> PE/HF background compared to CB. While I recognize your perspective that CB is comfortable and burnout-resistant, I believe it's essential to position oneself for optimal exploration across diverse fields. A career spans a lengthy period, during which various endeavors are sampled before settling on a long-term choice. Why constrain yourself prematurely?
Agreeing with the point below, CB is still a great job to have and is not really something that should be disrespected. The only people putting CB down are interns/prospects on this forum who are borderline autistic.
So I was in a top CB group at a big balance sheet bank that had it grouped within the investment banking division (JPM/Citi/Bofa) and I made the move from CB to IB. The only argument for IB is if you specifically want to go into PE/HF. If you are trying to be a career banker, I would 100% pick and go back to CB. The skillset in CB is just not that transferrable to PE/HF, not to say that it cannot be done. Private credit however, is a very viable and common path that many of my ex-CB co workers took. I actually also know a few ex-coworkers that made the move from CB to HF/Growth/Venture/Buyout, but they were also just very hardworking/bright people in general that made time to study outside of work hours, and they also would put "Corporate & Investment Banking Analyst" (technically truthful since CB grouped witin IB) on their Linkedin/Resume so headhunters would reach out for those roles. When it comes to the work itself, IB is only a little more intellectually stimulating. For example, there's the modeling aspect in IB that can be technically interesting and in depth, whereas in CB your mostly working on internal credit memos and playing a support role to the IB team in terms of execution. However, at least in CB you don't have to suffer through failed pitches since most of the time, your gonna be doing investment grade debt deals that have a 95% chance of going through. So you will get to understand credit, cap structures, and overall debt markets very well. Pay is also more or less the same. When i was in CB, I was a top bucket analyst and my bonus was only 5k less than a top bucket IB analyst at my firm. My hours were also much better overall. Here's how I would breakdown the comparison, relative to all areas of high finance in general.
Investment Banking
Exit Opps - 9/10
Intellectual Stimulation - 7/10
Pay - 8/10
WLB - 80-100 hour work weeks
Corporate Banking
Exit Opps - 8/10
Intellectual Stimulation - 6/10
Pay - 7.5/10
WLB - 60-80 hour work weeks
TLDR - CB is a very respectable career path that deserves just as much respect as IB. Corporate bankers make just as much money (even more actually on an hourly basis) as Investment Bankers and have several, great exit opps as well. Anyone who is angry and butthurt just has an insecurity complex
Disclaimer - I worked in banking and now I’m private equity. Others can and likely will disagree with me.
Your thought process seems to be that: (1) at the junior level, there’s significant variance in hours and less so in comp - so CB could be favorable and (2) very few people end up in banking long term, or PE/HF/etc, so why endure the early pain
In my view, the fundamental premise is flawed - I chose to go into banking because I believed in my ability to succeed in banking and thereafter an investing job. I genuinely like investing, and I wouldn’t have another path to this seat besides banking. I don’t mind the WLB sacrifice because I like what I do - and the now massive pay difference vs. CB is a bonus.
If you (1) know that you heavily prioritize WLB and (2) don’t care as much about comp down the road, and (3) are not passionate about any of the exit opps that only IV can open, then CB is a wonderful option.
If any of the above are false (which they are for most people on this forum), then CB does not make any sense in my view. You also seem to be underestimating the career trajectory of bankers - no, they do not “all end up in corporate roles.” Many end up in investing, whether they be LMM PE, large funds, hedge funds, FoF, growth equity, VC, etc. There are also startups, IR, philanthropic, family office, etc roles. From my banking analyst class in my group of 15 people, 1 is in corporate role. That number will increase over time, but they will transition at director / VP levels - not the lowly CD associate you seem to be thinking.
This.
People go into IBD and entry level jobs to learn a skillset and to set themselves up for more long-term career roles such as being an investor. The OP is approaching entry level jobs like the board game of LIFE where you pick up a card and stick with it forever and focus on passing life obstacles like buying a house or starting a family without ever thinking about that job again.
Unfortunately that's not a realistic case. No one really cares about 1st year or 2nd year salaries either when careers can last 40-50 years.
But are you saying that if someone goes into CB instead of IB out of college they will never be able to get a role like the ones you guys are discussing? Like you said, a career is decades long but in that time I feel like you could go CB -> IB -> PE -> other investing or CB -> Treasury -> Corporate. I understand it's definitely harder but it's not like you're just locked out of these roles forever. Consequently, you can also avoid the traumatic analyst years that might burn you out before you even get a chance to explore the other roles. My main point is I just don't see the immense upside to IB compared to CB and definitely don't understand why people believe it's significantly better. Seems like 1A/1B.
I have a good amount of years in this industry. I will be blunt with you and I have no ulterior motive. Several points
Your point on 1a/1b is wrong - there’s no point even doing the comparison because IB and CB are just fundamentally different life choices and paths. Neither is objectively “better,” there is only what us better for you and your personal values.
Yes, careers are long - that does not mean, however, that you can replicate IB or PE outcomes from CB. At best, it means that you delay your career for a few years trying to do CB -> IB -> PE etc (which is fine and I respect all that do - but the point I’m making is that you still have to do IB to get to a good investing seat). Are there instances where CB can go to small PE funds or credit shops? Sure. Would my fund or a reputable fund hire someone who did CB -> IB? Yes, and we have. Would we hire someone straight out of CB? 100000% no. The transferable skills do not exist. I was in a highly technical coverage group they did modeling in house - I spent 30% of my time in PowerPoint. You seem to misunderstand banking.
There is a poster above that said IB is a 9/10 on exit opps and CB is an 8.5/10. That makes no sense to me. If you look at it objectively, banking will open many doors that CB cannot ever open, unless you do IB. If you look at it on a personal level, then maybe - for example, if your dream is a treasury role, then yeah both are 10/10. If your dream is UMM PE, CB is a 0/10.
i subscribe to the view that “optionality is bullshit.” I did IB because I wanted large cap PE, and there was no other way to get there. If you like the work in CB and the people and think it can be a career for you - by all means do it. But don’t delude yourself that you’re better than the folks on the forum pursuing IB - not everyone here is part of some random rat race.
Lastly, I’ll say it again. If you want corporate, then hell, just start in corporate. But the large majority of people who do IB that I know are interested in investing, not in corporate roles - and the large majority do not end up in corporate
so no, there is no arbitrage to doing CB. There is no exit opps benefit. There is a massive comp discount relative to staying in banking, or course taking into account WLB. But, if you like the work and people in CB and value the work life balance, then pursue it and all the better to you for knowing what you want. Also nothing wrong with using CB as a stepping stone to IB. But trying to argue CB > IB is weird and misguided frankly - you need better mentors. Find what matters to you, not randoms WSO