Why does entry level "Investment banking analyst" pay twice as much as entry "Financial Analyst"? $150k vs $75k
When you are a entry level "Investment banking analyst", you are just doing work using Microsoft Excel mostly and you are paid about $150k.
But when you are a "Financial Analyst", the jobs requires you to be an "Microsoft Excel Expert" and you are also just doing Excel mostly but the pay is half at about $75k.
So can someone explain to me why the entry "Investment Banking Analyst" gets paid twice the amount of a "Financial Analyst" if both jobs is just using Microsoft Excel?
Two very different jobs and skillsets. But the most important differentiation is that one is generating fees and the other is a cost center.
Edit: Comment wasn't showing up but added additional comment below with more color.
Because one is selling clients overpriced slide decks that need to be backed up with your credentials so some corporate board or PE client can rest easy with plausible deniability if things fall apart. Same thing as consulting.
The other is doing actual FP&A work to drive meaningful change at a business.
Think it's hard to argue that FP&A is driving meaningful change... moreso just reporting, budgeting, and expense management.
That's fair. Although I'd argue you learn more applicable financial analysis to PE in FP&A than you do in IB. That's a whole separate conversation though.
Traditional "Accounting" functions are a basic core business function. "FP&A" is a step up from that, going from just keeping track of how business is going, to planning for where you think business will head in the next year or two based on the choices that the organization makes. "Strategic Finance" is the next evolution from there, where you're basically doing what a consultant would, and using all of your financial data to help determine what the organization should do, instead of it being the other way around.
So yeah, sometimes the finance guys can drive change. But only in the sort of company that is up for that kind of thing.
Two very different jobs and skillsets. But also one is generating fees and the other is a cost center.
Would also say that an AN2 will run circles around most people who came up in the "financial analyst" track at a F500 in terms of excel, ppt, and attention to detail. But just my two cents.
Two very different jobs. It's not as simple as "both work in Excel"
also don't forget financial analysts work 40h weeks and IB analysts work 80-100h weeks. On a per hour basis IB is pennies
To be fair... depends on what you define as work. Sure, there is facetime culture, "butts in seats", and groups that absolutely grind, but there is a component to the job that is essentially waiting on comments and getting through the afternoon before cranking in the evening. Not saying it makes it any better but gotta make the call out, plus if you've got a good team there can be good times in the pen.
100 percent - but all of that means you are gonna have a hard time making any plans whatsoever during the week. Also, GF's birthday dinner but you have an urgent deck due? Sorry, you're staying in the office.
There is a big pay premium for that type of WLB sacrifice/expected 24/7 availability that your typical FP&A analyst does not face.
Twice the pay but also literally twice the work. So actually the same. Entry financial analyst = 40 hours a week (max). Entry IB analyst = 80 hours a week
OP has been on this forum for 7 years and for 7 years he's been asking dumbass questions 💀💀💀
Took a look through his post history and you’re right. Absolute gold mine of very basic yet inquisitive, earnest questions for over 7 years. It’s kind of adorable
Dude is probably top 3 most inquisitive people on the forum but refuses to do any research
As an easy start, 80 hours versus 40 hours per week explains that really quick among a lot of other factors.
Why all the contorted justifications? Wages are set by supply and demand. What you actually do in the job or how many hours you work are largely irrelevant factors to the price of your labor
ok....these banks DEMAND analysts willing to work long hours and there is a limited SUPPLY of qualified people willing to do so. You realize supply and demand don't exist in a vacuum right?
Double the hours
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