Are hours of my life my only value-add in this space?

Pretty pessimistic post here, but currently working as a Summer Analyst at a boutique bank and starting to actually get a feel for what banking truly is as opposed to the superficial narrative everyone inside and outside of the industry submits to. With that, it's starting to feel like most of the work, specifically at the junior level, is less about critical thinking skills, intelligence, and financial acumen, and more so just about collecting and consolidating information for presentations and models. As a matter of fact, it seems like the only place that requires finesse in this industry is your people skills- looking good in front of the client, seeming intelligible, getting the client to bite on certain opportunities, etc. But, once again, you really don't have many opportunities to exercise that finesse as a junior person because you aren't front and center with the client. So given the relatively average talent required to do the work, it seems like the only real way to differentiate yourself from the competition is by putting in more time doing this cumbersome consolidation day in and day out so that your presentations and models come out crisp and you don't mess anything up. And this seems to make a lot of intuitive sense- since no bank can really offer a better product for their clients, the only thing they can do to compete is work their people until midnight frequently to get a slightly faster turnaround with a slightly more refined powerpoint deck.

So is that all this business comes down to? Are the "best and brightest" fighting their way to Wall Street just to compete on the basis of how much of their life they're willing to sacrifice to their work? The salary is certainly an incentive as is the prestige and "how much you learn," but I (naively) thought you would have to bring more to the table in these roles than just giving up your 20s.

Interested to hear A) if you agree with my thoughts or if I'm just a nihilistic incel and B) if I am a nihilistic incel- what do you bring to the table other than just your willingness to devote your time and energy to the deal process, more so than anybody else. Also, if you agree with my reckless analysis, but have some nuance to add, would be super happy to read about it.

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Comments (12)

  • Associate 1 in IB - Cov
Jul 16, 2021 - 8:50am

At the junior level, there is a huge dispersion between people who take the time to understand what they're doing vs those who require step by step instructions. A good analyst

1) understands every number in the materials, how it's calculated and can explain in a clear and concise way

2) keeps up with what's going on in the industry and remembers how they presented something in prior projects and can make suggestions based off of what they know

3) Checks their work thoroughly 

4) catches it if I make a mistake in instructions or if I'm forgetting something

5) is proactive - does things they know need to get done without waiting for instruction and learn over time what needs to get done in a process 

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  • Intern in S&T - Equities
Jul 16, 2021 - 9:40am

Hate to break it to you, but the "best and the brightest" are solving complex math problems at Jane Street and Citadel (and getting paid vastly more out of college to do so), not making pretty presentations at 3am.

  • Intern in S&T - Equities
Aug 15, 2021 - 1:37pm

What's the value added of Jane Street and Citadel? Same as the value added of every other market making firm and investment management firm respectively. Market makers provide liquidity for investment managers, which in turn invest and grow clients' money.

The complex statistical and mathematical models they use allow them to predict the markets better, which allows them to do their job better: just look at RenTech if you want an example of the huge success of using math to determine investment strategies. The value added of solving math problems is pretty obvious if you ask me.

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Jul 16, 2021 - 11:05am

Probably going to get MS'd for this, but I don't care because it's true. 

As a junior, straight out of school, your only value is processing volume. You know nothing, you have seen nothing, so of course no one really cares about your opinion. The value to you, is you get to be in the room with people who's opinions matter a lot. You can observe them and learn what works, what doesn't, what style of negotiating might be more applicable to your own personality, etc. This is an apprenticeship business because the finer details and nuances are impossible to put into a textbook or classroom setting. You have to learn through experience. You will get no immediate value-add skill that you can begin to employ the next day or month, etc. and have to take a longer-term view on your skills building. 

  • VP in IB-M&A
Jul 16, 2021 - 11:33am

There are a few dynamics at play. One is that as a summer analyst you're not going to get exposed to anything that resembles responsibility, unless it's on a fake project or something with a long lead time and very low priority. Although it sounds what you have in mind is more broad and not just related to your SA experience. 

As a full-time, the degree to which you get an opportunity to intellectually engage and show critical thinking skills, intelligence, acumen, etc. depends on the group you're in and its execution culture.

Some groups run lean teams, put a huge amount of of responsibility on juniors, throw you in the deep end and give you unstructured problems with little guidance. In those situations you'll get all the intellectual engagement you could want, but off-the-charts levels of personal stress too. Some groups run highly structured teams, with each level giving extremely crisp guidance to the level below them, in the interest of minimizing the number of iterations and ensuring the work product comes out precisely as intended. You'll find this experience much less stressful but also much less intellectually engaging. You will however learn best practices and experience less iteration-related frustration/anger. 

The situations where analysts can really add huge amounts of value (and are relied upon to add value) is when it comes to modeling. I don't mean valuation or merger modeling - if you're in a strong group you should have rock solid templates and just be plugging in inputs, which is more the type of "do easy things accurately" work you're describing / disliking. It's moreso with operating models, and particularly on the sellside, like when you get an internal model from a client with 100 sheets and crazy amounts of complexity, and need to make sense of it, audit it, and then rebuild it in a simplified way that is both perfectly accurate but also abstracts the more detailed inputs. There's no substitute for a good analyst with lots of brainpower, financial acumen, love for numbers, etc. on this type of stuff. 

But yes, to differentiate yourself from your other analysts, a lot of the time it's about doing intellectually "easy" things quickly and accurately, being predictive about next steps, catching things your seniors missed, adding value proactively by being up to date on what's going on in the industry, etc.

I think you're wrong about the way banks compete with each other though, it's really not about speed unless you're talking about a particular client that is full of ex-Moelis bankers who all got destroyed during their banking career and really truly value quick turnaround times. Banks definitely can offer "better products" for their clients – it's just case by case. Bankers get hired for their relationships with likely counterparties (and understanding of their internal bureaucracy - i.e. how to get a deal done), and for their tactical experience in negotiating and managing the flow of information. Occasionally they get hired for their valuation expertise, although in reality valuation is what the buyer/s are willing to pay, and banker-led valuation work is more of rubber stamp/guidance than a deal driver. 

Jul 16, 2021 - 9:18pm

The vast majority of the work that you will do for the first year of your job could be done by a conscientious 4th-grader.  

I come from down in the valley, where mister when you're young, they bring you up to do like your daddy done

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Aug 15, 2021 - 1:17pm

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