How Sharp of a drop off is there between the top banks and everyone else?

I know in banking everyone loves to pretend like the gap between GS/MS/JPM and a UBS/RBC or even Wells is massive but in reality it seems to be incredibly small and nearly negligible if your goal is to be a career banker (exits seem to be materially different), but what is it like in S&T? I know GS/MS/JPM and some citi/barclays/bofa desks are pretty much viewed as the cream of the crop and generally pay the best, but what is the gap between them and the rest of the pack. Is it more desk dependent the lower down the totem pole you get? What MM/small shops are the best to shoot for? Thanks.

Comments (9)

Aug 6, 2022 - 3:15pm
macroboxing, what's your opinion? Comment below:

I can speak from a trading perspective. For the most part, you want to be at an American bank with a general culture of risk taking (GS/MS/JPM/Citi/BoFA). There is typically a big drop after that. The European banks have really cut down their tolerance of risk. In the past, DB was probably up there too (but everyone knows what happened lol). As a trader you want to go a place that gives you the opportunity to take large enough risk to make a name for yourself. And then within the bank, there are desks that have more tolerance and rope than others. 

As an example, in my market, some of the smaller players (ex. middle market banks and smaller dealers) were forced to exit positions during the early Covid days as drawdowns were getting massive. You can see in broker markets what people are doing. The larger players kept their positions (management has the tolerance and backs its traders) and 2020 ended up being a record year. 

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  • Analyst 1 in S&T - FI
Aug 9, 2022 - 9:21am

I can give some MM perspective.  I targeted a MM shop out of graduate school because I wanted to work less hours with the same amount of upside and I wanted to be on a flow desk.  I got offers from 2 BB's and 1 MM. The main difference between a lot of BB & MM shops is comp structure and hours.  I always wanted a structure that was eat what you kill meaning commission in S&T.  I haven't heard of a single BB that still offers a commission structure for people on the desk but MM's still offer commission.  I'm on salary at my shop for 2 years then it's commission after that, but the younger guys here that have stuck with it for 4-5 years (associate level now) so far are making way more than BB associates.  We come in at 7/7:30 and leave at 4:30/5.  In terms of exit ops I'd say it's similar to what you said.  Of course there are some incredible exit ops from the top BB shops, but if you network and know what you're doing... you can have the same opportunities from anywhere.  Hope this helps.  I'd say best MM shops to target are Baird, Stephens, FHN (TD now), Truist, or Steifel.  Feel free to PM with questions

Aug 9, 2022 - 4:34pm
thugs_bunny, what's your opinion? Comment below:

Thanks for the response, I have a few questions I would PM but can't due to anon.

Out of curiosity, what made you want to be on a flow desk, the work seems like it could definitely be interesting, just have heard a lot of people say its not a great place to start out due to various reasons e.g automation etc? Also are you on the sales side or the trading side? I could be wrong but from what I've read there seems to be a difference in what desks are attractive for the different roles.

Kind of related to the previous question, is there any meaningful difference between flow desks vs (non otc) market making vs the last bastions of prop in terms of background they look for or is it too product dependent to give a good answer too. Additionally, if you don't mind sharing, what kind of education background did you come from (STEM, target/non target, other work experience).

Thirdly, would you say those shops listed are top specifically for your desk or on average in comparison to other MM players they tend to be better. I understand theres probably some shops out there nobody has ever heard of with a few strong desks, but are those players generally speaking top of the middle market?

Lastly, I've read a few times that one issue with a lot of the MM places is that since they tend to be less miserable places to work, people tend to stick around longer on the desk, reducing the number of spots available for further progression. Do you see this as a real issue or is it easy enough to bounce elsewhere whether it be to another SS shop or the buy side once you have enough experience under your belt to even warrant these concerns?

  • Analyst 1 in S&T - FI
Aug 12, 2022 - 9:28am

I've wanted to join a flow because of the fast-paced nature of those desks.  I have many friends who are not on flow desks and who are in let's say a structured products type role and yes it is sales & trading, but it's much slower.  A flow desk is always moving and there is always something going on with clients.  Not to say there isn't always something going on at non-flow desks because there is, but it's a lot more about getting a big trade done which can sometimes take days or weeks.  I'll follow that by saying each desk is different, but from my experience flow desks are always moving.  About your point on automation... You have to think about it like this... Automation will come to the parts of this business that affect retail clients.  For example, retail clients at investment advisors will buy municipal bonds and corporate bonds in their personal accounts but that's pretty much it.  Mortgage-backed securities, for example, that doesn't really happen much.

I am personally on the sales side as of now, and at my firm, we look for people with strong educational backgrounds, but more importantly, we look for people that will fit well on the desk.  Of course, to get to that point you have to have a good resume, but I think you get the point.  I have a finance/comp sci degree from a non-target, and then a master's degree from a target.  I couldn't break into S&T from my non-target school (and yes i tried very hard), but from my target school it was actually attainable.

To your third question, I was just giving you a few references on places you might look at to break into MM shops.  If you're interested in talking about specifics I'm happy to answer more, but don't want to cause drama over giving opinions about ranking here (i'll do pm but that's up to you lol).

And to your last point, MM's absolutely have real work-like balance.  There is a lot of room to move up at a MM firm, but there are definitely less spots available for graduates which makes it harder.  I see it to be a relatively easy transition if your goal is the buyside.  I've only been at my shop for about a year and have had multiple recruiters reach out (I personally don't want to leave, but there is potential for that)

hopefully this helps

  • Intern in S&T - FI
Aug 12, 2022 - 7:57pm

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