Why would you do this
Curious to figure out why those in IB choose IB. Why not go into something like wealth management and have potential to make the same living, better work balance, and a less stressed work environment. Why not do wealth management?
I’m not in IB but you do not make the same living
Wealth management is for people that have much better sales skills than just raw intelligence.
Wealth management is all about making people feel secure and trusting you with their money. That is even more important than beating the market.
Also, I think while there are some all stars in wealth management that make tons, most on average make just mediocre money and struggle to acquire and maintain a book of business. I think the average person in IB makes more. Also, it’s very hard to break into a good IB job but once you do is pretty damn easy to coast.
curious what the average front office IB person makes, I always got the sense that you have a shitload of people making 1-200k at analyst level and then it gets way thinner at the top ranks but have absolutely no data to back this up
for PWM, average advisor income at the big 3 (UBS/ML/MS) is $4-500k nationally, so assume maybe higher in NYC/Chi/LA/SF and less in billings MT
I think that’s a very conservative take.
IB pay is quite regimented until you make director. And it’s very easy to get to VP3 if you want to get there. So that’s three years of analyst, associate and VP pay.
Of course there are deltas in bonuses between top and bottom bucket and some EBs pay a lot, but generally, just for illustrative purposes, as decent analyst you average 250k for three years, associate for three years you average 400k and as a vp you average 650k for three years. So average total earnings for 9 years is almost $4mm. And my above numbers skew conservatively at a BB. A strong performer gets promoted faster and always makes top bucket bonus.
I have to believe that pay graduation dwarfs what junior people make in PWM.
But like I said, if you gather a book of business of wealthy people who don’t really care about expense ratios and upfront fees and aum fees, you can make 7 figures as a glorified salesman and it’s really a great life. But you have to be a great people person.
Haha, IB doesn’t require intelligence. You’re grinding out ppt slides. And once you move beyond associate/VP it’s also just a sales job.
my thought process was for IB, much quicker and straightforward path and opens a lot more doors than WM. I would agree with the poster above that WM is mostly sales and telling people to give you their money, and that really didn't appeal to me. Comp is defo going to be different as well.
People that choose IB that talk bad about WM do so because they are insecure and are afraid to step into a role that requires them to produce early on. At the highest level in any line of business in a bank, you are in a sales role. MDs in IB have a sales job. When you drive revenue, you get paid for it. In IB you are a cost center for a long time. If you prefer to not have the pressure of driving top line growth early on, IB is a better move.
I generally control my schedule and as long as the business results are there, my management team leaves me alone.
I’m trying build modeling skills, learn about M&A processes and get deal reps to have a foundation for PE afterwards. And I want to get paid $$$ out of school. So IB it is for me
Two different animals for two different types of people.
Wealth management ( and I’ll group it with financial advisory) was put to me as one of the harder ways to earn $75k a year and one of the easiest ways to make $500k a year. If you are good and make it, it can be awesome. But if you aren’t inheriting a book, you have to be ready to have some really lean years while some of your buddies are bringing in 6 figures and building robust resumes.
For people with wealthy parents or parents that support them thru lean years/always I think it’s a decent path that can have good outcomes.
IBanking is for overachievers who aren’t even thinking about work life balance, the first step for them is breaking in and getting the badge.
no one really says to themselves I want to grow up to be in wealth management, it’s usually a default option. They grow up saying I want to be a banker, or engineer or doctor. That’s the difference imo.
this matches my experience 100%. lucky to have had the experience of building my own book and becoming a partner on a large team so will have mine plus inherit another
for those that think I'm unique, I'm not. if you can prove to someone that you can bring in significant money, you will find a home (or just continue to be 100% your own boss and not have to deal with partnership headaches like me rn *wishes I had hair to pull out*)
WM undoubtedly has a lower barrier to entry, and thus gets a bad rep.... for good reason to a degree too - there are a lot of investment advisors out there who manage money for Joe Schmo and basically are telemarketers.
However, there is a huge, and I mean HUGE gap between those guys and the top of the private wealth sphere. These guys are knowledgeable, polished, and rely largely on referrals. The amount of wealth they manage requires serious strategy and is not just plug and play products like the lower level Joe Schmo's... and at the top of the Private Wealth sphere comes elite pay. I was previously on a strong PWM team, and the two MD's who headed the team were each making ~$1.5-$2mm per year, with multiple multimillion dollar houses that they split time amongst. The junior partner (early 30's) was already making around $400-500k per year. The true cherry on the cake though, was that each of them worked no more than 40 hours per week, and could do so anywhere in the country. Not a bad gig at all in my opinion.
This is facts. I know a team managing a couple billion $$ and they bring in 90 million a year in revenue with a team of around 20 people. Imagine how much the MDs are making (only 2 of them), taking into account that analysts make under 100k
bc preftige bro, fuck PWM, only dumbasses become financial advisors. it's where people who couldn't hack it anywhere else go.
I though you did PWM???
I do, but I'm dumb, not prestigious, and couldn't hack it anywhere else, I don't see the inconsistency
IB is cooler work and I like the intensity. Keeps me on my toes.
The only people that I’ve personally known who own private jets are all in PWM. The cherry on top is that they work while chilling at Apres in Aspen or while on their boat in Miami.
PWM is cutthroat, but if you are a killer you can make multiples more than any investment banker ever will in their career.
Not buying this from someone who previously worked in PWM... you're never going to make PJ money... that's reserved for EXTREMELY successful business owners.
i know a lng trader who just got a gulfstream lol. many ways to get that rich, you just have to be extremely good at what you do
cuz you can exit to PWM from IB but not the other way round
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