Are repe/development analyst/associate/vp jobs worth it?
One of the most overlooked parts of the industry is brokerage. Students want to work at a bank for two years and then go on to private equity. I have always wondered if that route is broken or overdone, and no one has really ever questioned it, at least on the large scale. Part of the problem is how people look down on brokerage (both investment sales and capital markets), and the more prestigious one's university is, the lower the position seems.
There is likely way more money to be made for someone going above and beyond in the brokerage market, with the main factor holding one back being the lack of income in the first few years. As others have said in this forum, you likely aren't becoming a millionaire in your 20s anyways, and sometimes those liquidity events later on is luck.
If your goal is to work your ass off and accumulate money to go off on your own eventually, is the traditional path even worth it?
There are a few factors impacting both sides, including the following:
- High unemployment with limited new jobs
- Low transaction volume
- High rate environment
Ultimately, it appears to me that if I wanted to go out on my own in 10 years, I will have more money and maybe even relationships to work off of if I grind these next few years for myself instead of working potentially even harder for a fixed salary. Is there something I am missing?
Yes, you're sort of glossing over the fact that brokerage is extremely vulnerable to macro events (look at how much sales volume has been down recently - can't make commissions on deals you don't close), and also that its an extremely competitive business. It is probably as much of a grind as any other job; you're spending years making next to nothing, you won't be getting favorable splits for a very long time, and even then... why are you a better broker than anyone else? Some people are good at sales, and if you are a good salesperson, brokerage is a good place to be. If you spent a lot of time and effort getting into an top university and making great grades, you have a better chance at getting a more finance-oriented role and doing that instead of brokerage, because you may not actually have the talent for it.
There is a lot more competition in broker roles, precisely because it is easier to break into. It is also way more of a pyramid than REPE or development - there are very few players at the top of that pile, and a lot of people toiling down below in order to funnel profits upwards. While I have no data except anecdotal experience to prove this, I think it's almost beyond dispute that at any given point in a career, the average, median, and max salary is far lower for a broker than it is for someone in development or acquisitions.
Appreciate the feedback. I get where you are coming from, and it's sort of how I was thinking. Brokerage success is probably very specific to situation/market.
Getting to the principal side is easier said than done though, especially in this market.
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