Prestige Gap Between IB and MBB

As someone who is deeply interested in pursuing a prestigious and rewarding career, I recently stumbled upon some intriguing data that has sparked a question in my mind.

I have always assumed that IB and MBB were equally the pinnacles of professional success in the business world (at least for recent graduates). However, I was amazed to find that the actual number of individuals working in the IBD of BB/EB is relatively small when compared to the sizable workforce at MBB. This realization led me to ponder whether the perceived exclusivity and career prospects of MBB are truly justified and equal to those of IB.

Just for comparison: CVP employs fewer people worldwide than BCG in Munich alone.

I would like to hear from the WSO community: What are your thoughts on the following questions?

  1. How significant is the prestige gap between IB and MBB?
  2. Does the sheer number of individuals working at MBB diminish the perceived exclusivity and career-enhancing potential of these roles? Do you feel like "one among many" in the consulting world?
  3. Considering typical finance exits, is it more challenging for MBB consultants to transition into coveted finance roles due to the highly competitive landscape? Or does their consulting background give them a unique edge compared to those with an IB background?

Thank you for your time and insights!

Note: I don't need to be lectured about how one shouldn't base their career on prestige - that's not what this is about. This prompt aims to initiate a constructive discussion and does not intend to undermine the value or importance of either IB or MBB.

Think it's the other way round with numbers.

In Europe/UK, MBBs hire 40-50 new grads each. Each BB hires up to 50-100 people and there's more BBs/EBs combined as well. The total class for all MBBs combined in London is 120-150 p.a., for BBs/EBs it's 800-900.

In my current class at an MBB, around 1/3 of people had return offers from BBs/EBs (others were not finance oriented, never heard of IBD/PE/etc) whereas finance friends often didn't get into MBB and had to go to banking instead (though obviously most people don't want to do both and didn't apply)

Interesting thoughts! 800-900 for BB/EB in London seems about right.

However, MBB collectively have >6.7k employees in the UK. Assuming half of these are consultants and they stay for an average of 4 years, the replacement value alone would be >800 new graduates that MBB hire in the UK per year. So the ratio is more like 1-on-1.

You also have to consider that London/UK is the IBD hub for Europe. If we take other regions into account, the ratio looks quite different: in Switzerland, MBBs have c. 1.4k employees and, as far as I know, 1k consultants. But the number of investment bankers at BBs/EBs in Switzerland is not even 100 (large-cap IBD only). Same goes for other places around the world. 

That's not correct. Whatever the replacement ratio is, MBBs do hire 40-50 new grads each year (no need to work backwards from assumptions if everyone knows the actual data) so 120-150 combined, not anywhere close to 200 or especially 800.

Not sure about Europe (UK is definitely more competitive) so won't comment too extensively but your reasoning from no. of employees is not correct for the UK so no reason to think it'd work for Europe.

TLDR: don't choose on prestige but in the main market in Europe for both (UK), top banks hire way more people than MBBs and it's not even close.


Think it's the other way round with numbers.

In Europe/UK, MBBs hire 40-50 new grads each. Each BB hires up to 50-100 people and there's more BBs/EBs combined as well. The total class for all MBBs combined in London is 120-150 p.a., for BBs/EBs it's 800-900.

In my current class at an MBB, around 1/3 of people had return offers from BBs/EBs (others were not finance oriented, never heard of IBD/PE/etc) whereas finance friends often didn't get into MBB and had to go to banking instead (though obviously most people don't want to do both and didn't apply)

This sounds right for London but I think it's the opposite for Europe. Consulting is less centralised than finance. BB/EB IBD has a large number of roles in London but few elsewhere, whereas MBB regional offices have relatively large intakes. E.g. BCG in Germany is huge, takes a very large number of graduates every year, and is much easier to get into than in London. It's common to find BCG Dusseldorf associates who studied Business Administration at some random local university vs. BCG LDN associates who studied Oxford PPE or Cambridge Econ.

Speaking from personal experience (UK Grad - interned at Bain and had offers from several IBs) here at least in London MBB is more prestigious than IB (most of them anyway) cause they are so much harder to get into due to how few people they hire also you have to realise there are only 3 companies in MBB while dozens (worth-noting) IBs alone. Plus case study interviews are harder than IB interviews.

Prestige does not matter and as someone who in the past made career decisions that I very much regretted due to perceived prestige focus on the actual pros and cons of the role and not whether people you don't really care about will be impressed with you.

Totally agree with most of what you said! Mastering the art of case studies is much more difficult than reading the 400 question guide a couple of times. And prestige shouldn't play a major role when deciding for a career path.

But I don't think that few MBB vs. dozens IBs holds if we limit it to MBB vs. BB/EB. Because sure, there are c. 15 BBs/EBs in London vs. 3 MBB. But you'll find MBB in every major city. In Germany alone McKinsey has 9 offices, BCG has 7. BBs/EBs only maintain satellite offices for country coverage outside London. Taking them together, the number of consultants at MBB is far greater than the number of investment bankers at BBs/EBs.

I want to clarify with you - do you mean to ask about the prestige gap between MBB and EB/ BB? Because if you're just asking about MBB vs IB, then just by natural stats, MBB has gotta be more prestigious because 'IB' has a wide scope which includes random boutiques and MM

Anyway, was nitpicking there. I'm sure you meant to ask MBB vs EB/ BB

I'm gonna go out on a limb and say MBB has gotta be slightly more prestigious. MBB makes it very obvious that they primarily recruit from Oxbridge, and give LSE/ Imperial/ UCL and the rest a 2nd glance. Analyst class much smaller too as others have mentioned. From my experience, you can spot a banker vs an MBB by miles - the MBB absolutely loves to spit 'prestige talk'. That sort of verbal garbage and corporate catchphrases that say a thousand words without saying anything.

Yes, MBB vs. BB/EB. Thank you for clarifying!

I see your point: MBB do stick to their target schools. But funny how this has turned into a London-centric discussion. I imagine there is a glut of investment bankers in London and the number of consultants is limited - but this is obviously different in cities not known as global banking cities (aka. not LDN, NYC, ...).  What do you think is the case "in the grand scheme of things"?

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What do you mean 'in the grand scheme of things'? You mean the dynamics of these things (number of bankers and consultants, recruiting dynamics etc) outside of our small sphere (cities like Ldn and NYC?)

MBB needs to stick to the targets even more so than IB because as a 25 y/o kid sitting out there giving advice that you googled to CEOs, you really need some sort of prestigious background to back it up. No executive worth their salt would take shit from some kid if that kid's pedigree didn't blow his pants off. In banking, the dynamic is smoother - the 22 y/o kids are hiding in the office making pitchbooks while only the MDs are leading the deals. Furthermore, bankers don't shove advice up CEOs' asses like consultants do - they only give external advisory in actual professional situations like restructuring or M&A. To the CEO, that's not too far off from hiring a lawyer. But consultants - they straight up tell CEOs how to run their own businesses. You'd need some nerve to do that, hence MBB needs to stick to the targets.

The banker's dynamic is also much 'smoother' in the sense of - the banker has led a hundred deals while the CEO has led none. Expertise is clear here and even better (and this is what I think is the best part of the banker-client relationship), it doesn't chip at the CEO's ego because he's a CEO, not a banker. But for consultants - the CEO has ran his business for years while the consultant has ran none. The expertise dynamic is unclear.

I don't keep up with the consulting recruiting landscape in NYC, nor do I rlly keep up with consulting much (I find consultants annoying af tbh), but if MBB does the same thing there as they do in Ldn, the equivalent would be pretty much only recruiting from the Ivy League.

This thread appears to be focusing on MBB in the context of Europe, in which case I would question the value of 'prestige' for exit opps here. Many of the traditional corporate exit opps from MBB pay like crap in Europe, which means that if you want to make money while you're young the best alternative is usually PE. But if PE is your goal then why not just start in IBD? 

True. The MBB -> PE route is quite an uphill battle, especially in Europe. I recently spoke to a principal at a top firm who took this route and he strongly advised against it, saying that many of his peers eventually had to give in and stick to consulting/exit to corporate.

I would say that whilst in major finance hubs like London it is arguably more competitive to get into MBB than IB, MBB is still less prestigious from a global perspective. 

As others have commented above, MBB is absolutely enormous in cities that basically have 0 IB roles, particularly in countries like Germany where consulting is a big industry. Another location that springs to mind is the Middle East where there are endless public sector projects and across all three MBB firms there have been hundreds if not thousands of new consultants hired across Dubai, Doha, Riyadh, Kuwait etc in the last few years alone.

Anecdotally in my region, MBB is viewed as more prestigious than IB, especially for undergrad recruiting. This is a function of (i) higher selectivity given the much smaller class sizes and wider candidate pool (including non-finance majors) where the 3 MBB firms hire a fraction of undergrads compared to the 10-15 notable BB/EB IBs (you should compare this on a country- or regional-level, not on a city-level as by default the working model of consultants require them to be closer to the client site), (ii) "more prestigious" candidate pool given the higher pedigree of target schools, GPA, majors, extracurriculars, etc., (iii) % hit rate / exit into a broader set of "prestigious" career paths including C-Level roles (vs. limited to CFO / finance roles), politics, academia, etc., (iv) "more prestigious" lifestyle where consultants are typically traveling to client sites on business class (>3 hours), much more generous expense policy, staying in 5 star hotels, etc. which much less common in IB. I could go on.

There are obviously exceptions and "prestige" should never be a deciding factor between two very different career paths. It was also pretty amusing for me to compare both career paths in terms of their relative level of prestige, since this is all subjective and depends on what you value. Have many friends who went to BB/EB IB who were top class and had a "prestigious background". Fwiw, I was an MBB consultant and transitioned to investments in MF/UMM PE. Had the option to go to BB IB (received 2 offers) but decided it was not for me due to non-"prestige" related considerations.

Such an outrageous question.

But I’ll take the bait on part of it. On exits, most MBB people do not care about typical Finance exit roles. Only a fraction are actually interested in PE, HF etc. No doubt its competitive for these people, but it’s not like all MBB are trying to move through that door.

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Remember, always be kind-hearted.

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