5 ways a career on WS is not what it used to be

geoffblades's picture
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In the old days many people perceived joining Wall Street was a golden ticket. They figured if you put your head down and work hard your career can be whatever you want it to be.

Some thought they would make their money and be done in their thirties or forties. Others imagined they would keep ascending to masters of the universe. Some figured they'd do a couple of years in banking, then the buy-side, then start their own fund. Today, many Wall Streeters are beaten down. Slaving away every day, they no longer see how their careers are working for them.

Here's five ways your Wall Street career has changed and what you can do about it.

1. A job on Wall Street used to be well-respected

You used to be able to say with pride that you worked on Wall Street. Sure, people still viewed you with the "is greed really good?" type of look, but they didn't look at you like your job was to burn down the economy and kick people out of their homes.

Today people on Wall Street sheepishly say, "I work in finance," rather than proudly announcing that they have worked their tail off to land a top job and work around the clock striving for success. Screw that. Take pride in what you do. Work hard. Do good work. Be proud of being ambitious.

2. Comp is not what it used to be

When I was an analyst you could reasonably expect to be a senior associate or junior VP making seven figures. More than fifteen years later many MDs are lucky to make that. Even on the buy-side, including the big PE shops, comp is hardly what it used to be.

Now, to main street this is ridiculous money, but consider what you have to do to earn it, and what it buys you. A forty-something MD whose been at it for nearly two decades, working around the clock under constant stress, earning six-to-seven figures paying 50% taxes, jammed into an apartment in NYC, London, HK, or otherwise, with a wife and 2.2 kids is hardly living the rich life.

3. Exit opportunities are not what they used to be

Bankers used to believe that leaving Wall Street the world of opportunities was open to them. Many corporate gigs are legitimately taking a step back. Most start-up jobs are buying an option, with volatility rarely priced in.

The buy-side used to be the panacea for bankers, but not anymore. The glory days of PE and HF are behind us. The mega funds and opportunities are a fraction of what they were a decade ago. The opportunities to strike out on your own and start your own fund are limited to non existent.

4. Accelerated path diminished

My timing was lucky. Joining Goldman in 1998, I was one of few classes in history that on a mass scale promoted second year analysts straight through to associate. Skipping a year and business school was a boon for me. Some might want to go to BS, I didn't.

Today it is much harder to be an analyst promote, business schools have gotten more expensive, and associate (banking and buy-side) comp has come down pushing out your "path to freedom" by a number of years.

5. Less appealing long-term track

At Goldman a normal path to MD was to spend four years as a VP. Today that is five. After that, making partner might take 2-4 years. Today that is more like 6+ (if ever). The same is generally true across firms and across the street on the buy-side.

The track has slowed down and the comp at every level is lower. Do the math. The long-term track has become less appealing.

Reading this you might say, crap, none of that makes me feel great about a career on Wall Street, and I would suggest that is the right observation. Because when you start from a realistic world-view you can then ask yourself, What Can You Do About It?

First, I would suggest that even if WS isn't what it used to be, it is still an incredible place to get your career started. What's a better alternative?

Where do you go to get the type of experience you get on WS? Where do you quickly build incredible business skills and a strong resume? Where else are you surrounded by some of the hardest working and smartest minds in business? You can go to a tech startup and hope to hit a home run. Or go corporate and get on the snail trail. WS may not be what it used to be but it is still an incredible place to get started.

Second, here's what really matters.

Once you are there, what do you do with it? How do you get your career working for you? It may be an incredible place to get your career started, but the long-term path is only lucrative for a fewer number of people.

As one of my partner clients puts it, there is still an incredible opportunity in banking, but only for those who absolutely crush it. So, how do you crush it? How do you step back from your career, figure out what it takes to win, and build yourself into someone who crushes it? And how do you keep your career working for you over time? How do you keep setting your sights on what you want and keep moving in the right direction?

The simple answer is: Focus. You must stay ludicrously focused on what you want and what it takes to get it, and keep building yourself into the person who can do it.

About Geoff: A former investment banker at Goldman Sachs and investor at the Carlyle Group, Geoff Blades is an advisor to senior Wall Street executives, CEOs, and CFOs, on corporate and strategic matters as well as topics of personal and professional development.

Comments (31)

Oct 6, 2015

I agree with the snail trail for corporate roles. My VP recently told me that his manager sees his position being filled by someone with 10 years experience in my role... 10 years....

Oct 6, 2015

Unfortunate as it may sound to us finance types, perhaps this is Wall Street simply going through a correction. Since arguably the early 80s, there have been multiple sustained growth cycles that have benefited Wall Street (two LBO booms, dot com bubble, run up in commodity prices, booming real estate, creation of asset-backed securities, etc.) Post 2008, it seems that for the first time in long time, there are no large trends propping up the industry, and instead it's being hammered from multiple directions/sources (Dodd-Frank and other regulations, low commodity prices, graduates going to Silicon Valley, recent spates of bad press related to stress and overwork in banking). Wall Street may be entering an era in which it permanently has to change the way it does business for it to remain a lucrative arena in which to make a career in. With a recession likely looming the horizon, things may only get worse from here.

Oct 6, 2015

"Today people on Wall Street sheepishly say, "I work in finance," rather than proudly announcing that they have worked their tail off to land a top job and work around the clock striving for success."

This couldn't be more accurate. As someone who recently graduated and worked my ass off to get to where I am, it's truly disappointing that this has to be my response to people when I get asked this question. Shame that getting to work in such an amazing industry and I can't even feel good about it.

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Oct 8, 2015

It just sounds really douchey to say you want to work on Wall Street or you do work on Wall Street. There's respect in saying it but it comes with a twinge of social stigma solely because 'ordinary' people a) don't understand the crisis and b) universally regard investment bankers as shady, self-interested suits.

I think to most people on the forum (I hope), it's not just about the comp/prestige but how stimulating and intellectually challenging markets are, especially if you're on the buyside.

Oct 6, 2015

I completely get how to basically everyone it sounds douchey since they know the reason you're probably on Wall Street (money) and that in the recent past it comes with a poor stigma.

I do believe, as to your second point, many people aren't in finance strictly for comp and prestige, even if that has a lot to do with it, but I guess it's just frustrating getting to do genuinely interesting work and not being able to be proud of it.

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Oct 6, 2015

Senior associates pulling 7 figures?

    • 3
Oct 7, 2015
Ultima-RDK:

Senior associates pulling 7 figures?

Surprised they weren't making 8...it's Goldmin Sachs

Just think about the exit opps, bottles and models, synergies, hermes ties, analist to md promotes, etc

I mean you can almost play beer pong off their league tables

    • 3
Oct 6, 2015

This is really making me re-evaluate my goals of busting ass for the next 5 years in the hopes of standing a chance to become a Wall Street IB associate (I'm a senior in college).

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Best Response
Oct 7, 2015

I think people are misinterpreting the whole idea that 'Finance is not what it used to be'. From what I hear, finance is obviously not as lucrative as it used to be, and there is a chance that it will never be. That does not mean that finance does not still offer excellent opportunities for those who work extraordinarily hard. This is true for any profession and will remain true for finance.

I think there are too many people who got into finance for the perceived 'idea' and glamour of finance, rather than their passion for a particular profession. Sure, IB does suck in many aspects, but believe it or not, there ARE many who enjoy the deal process.

To offer an analogy, I think this is a case of 'dumb money getting squeezed out'. Too many people who got into the industry due to the allure of easy money relative to other professions. As this changes over time, these people, including the next generation of these people at colleges, will join the next 'fad' profession. The people who got into finance for finance will stay in finance, just as those who got into medicine for medicine will stay in medicine.

The old 'do what you love' adage may be cliche, but it has always held true.

    • 5
Oct 7, 2015
QGKZ:

I think people are misinterpreting the whole idea that 'Finance is not what it used to be'. From what I hear, finance is obviously not as lucrative as it used to be, and there is a chance that it will never be. That does not mean that finance does not still offer excellent opportunities for those who work extraordinarily hard. This is true for any profession and will remain true for finance.

I think there are too many people who got into finance for the perceived 'idea' and glamour of finance, rather than their passion for a particular profession. Sure, IB does suck in many aspects, but believe it or not, there ARE many who enjoy the deal process.

To offer an analogy, I think this is a case of 'dumb money getting squeezed out'. Too many people who got into the industry due to the allure of easy money relative to other professions. As this changes over time, these people, including the next generation of these people at colleges, will join the next 'fad' profession. The people who got into finance for finance will stay in finance, just as those who got into medicine for medicine will stay in medicine.

The old 'do what you love' adage may be cliche, but it has always held true.

Completely agree with this. It's a great industry and only those who genuinely love will hopefully start coming into it, rather than a bunch of trust fund kids.

Oct 7, 2015

love this way of seeing it

Oct 7, 2015

Not a bad thing necessarily. Only people who truly like banking/finance will join. Not like earlier when the hoi polloi would see the pay cheque and would try to jump in. Let them go to whatever areas is "hot" next.

Oct 7, 2015

Just started, first year. It feels like an ordinary job except the actual work is fun. Money doesn't stretch far in NY even with the salary bump. Wish I made more. At least the NY girls are easy on the eyes.

Wall Street (at the entry level) is the new 9 to 5 plus ~7.

Incoming Ash Ketchum, Pokemon Master
Literally a problem, solve for both X and Y, please and thank you.
Hugh Myron: "Are there any guides on here for getting a top girlfriend? Think banker/lawyer/doctor. I really don't want to go mid-tier"

Oct 7, 2015

Sure people might look down because you work in finance, but I laugh at them when they say they work in tech but are actually a glorified customer service rep for Yelp or "Senior Vice President" of a "high tech" sock company.

    • 1
Oct 7, 2015

Sitting here on the snail trail, and having read plenty of "Wall Street isn't the same" anecdotes on this site, I'd still bank in a heartbeat if the opportunity presented itself.

Oct 7, 2015

I could be wrong, but I disagree on #4 analyst promote. From what I understand, unless you were a very shitty analyst, even if you are just average, banks are more than happy to take you on as an associate. Moelis for example offers $175k bonus to analysts that stay to be associates. Why? It's because generally speaking, an average analyst can outperform a new MBA associate easily given the amount of time they have already spent in banking (assuming the analyst is not incredibly awkward or introverted).

Oct 7, 2015

Re #1 and #2:"

Posts like yours are the reason Wall Street jobs don't earn respect from the public anymore. Then it gets front paged on a site like this. It makes us all look like a bunch of ungrateful pricks.

Yes, I understand the frustration of paying taxes on hard earned money. But publicly complaining about taxes when you make 7 figures is just offensive to most people.

"Strength does not come from physical capacity. It comes from an indomitable will."

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Oct 7, 2015

Fairly good post. Some questions and clarifications.

  1. In terms of buyside exit opportunities, I think we have to distinguish between post-college and post-MBA banking. The former (especially top bulge bracket groups and the elite boutiques) still do just fine with getting into private equity firms after their analyst stint. Post-MBA banking is a different story. It is expected that you're not gonna get PE, and your options are mostly just staying in banking and hoping to move up or biz dev/corporate strategy. I do know a few 2013 MBA grads who recently got hedge fund gigs after 2 years as banking associates, but I'm not sure how common that is. In general, hedge funds and PE like to hire them young.
  2. Adjusted for inflation, is banking comp really down a lot from the late 90's/early 2000's? BBs now pay first-year associates a base of $125K plus a signing bonus of $50K and a first-year bonus of roughly $50-$75K. Some of the boutiques pay even more, with first-year associate base going as high as $160K. I know a second-year associate at one of these shops who made around $400K this past year including bonus. Perhaps comp at VP+ levels has gone down, but with the flurry of M&A activity this past year, I wonder if that is actually true.
  3. NYC taxes and rent SUCK. It's disgusting that we have to fork over half of our earnings to an inefficient federal government and a corrupt state and local government that just gives our money to bloated unions and bureaucrats. You would think that NYC would at least have nice clean infrastructure given how much we pay in taxes, but that is sadly not the case. Probably the most inefficient city in the Western world.
    • 5
Oct 12, 2015
MBAGrad2015:

3. NYC taxes and rent SUCK. It's disgusting that we have to fork over half of our earnings to an inefficient federal government and a corrupt state and local government that just gives our money to bloated unions and bureaucrats. You would think that NYC would at least have nice clean infrastructure given how much we pay in taxes, but that is sadly not the case. Probably the most inefficient city in the Western world.

Man, you want to see bloated, inefficient government, try living in DMV (District, Maryland, Virginia). The metro system out here breaks down a lot, doesn't fix anything, and runs trains every 20 minutes on weekends. To top it off, THERE NO MONTHLY PASSES. The system is all based on distance traveled and ends up expensive as hell. I miss NYC for public transit.

    • 3
Oct 7, 2015

Re: #1: I don't see why other people's negative opinion of finance/Wall Street it that big of a deal. If they think you're some greedy huckster part of the process in tearing down the world economy, then that's just total ignorance on their part. Who gives a shit what they think... Nobody should feel ashamed about their job if they like what they do, even if its toilet scrubbing.

Re: #2 (comp is down): Time to get the Democrats out of the Oval Office...

    • 1
Oct 7, 2015

Oh, and like another poster I was a bit confused about the bit on analyst to associate promotions. That is still quite common for those who stay in banking -- two years as an analyst and direct promotion to associate.

Oct 7, 2015

Banking in emerging markets - even with the macros blown up right now - still is an incredible career opportunity compared with other industries.

Oct 12, 2015

What emerging markets are you referring to? All? I'm very much interested in working in Brazil, but the future there looks bleak. I'd be surprised if jobs there are actually attainable to those outside the financial/political elite as most emerging markets are not meritocracies.

Oct 7, 2015

Who cares about any of this? Who cares about the respect of the world? Who cares about prestige? Pay? "I'm only making 200k instead of 400k. :'(" Get over yourself.

DO WHAT YOU LOVE. Don't care about what anyone else thinks - especially other WSO contributors.

    • 1
Oct 7, 2015

I too was under the impression that comp was back at '06 levels ... but maybe that is not true for senior level guys. I don't think you see as many fund managers taking home a billion dollars in one year...

  • Anonymous Monkey
  •  Oct 9, 2015

I don't think you see anyone taking home a billion dollars a year..... Maybe Ken Griffin....but that's it. ahhahah

Oct 9, 2015

I thought the whole point was 2007 style outsized compensation. The whole golden handcuffs thing.

  • Anonymous Monkey
  •  Oct 9, 2015

Aw wah, people don't like it when my friends and I talk about "fuck you money" and bottles and models. I worked hard to be a ostentatious asshole -- does nobody respect that anymore? Now we make less money and have to do math? What happened to the good old days of blow, smoke and mirrors, mono-ethnic diversity and recklessly investing client's money with OTC securities?

    • 1
Oct 10, 2015

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Oct 12, 2015
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Nov 22, 2015
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