Big 4 vs IB
Hey guys -
Am sitting at my desk at 1am right now cranking through yet another pitchbook. For context, I'm working at a BB, started out as an analyst and went the A2A route instead of doing PE / corp dev or whatever. I was chatting with some of my college buddies who are working at big 4 firms and they pretty much uniformly hate their lives. Here's my question though. Maybe it's my sleep deprivation talking but what exactly is so bad about working at a big 4? I mean sure the hours suck balls at the beginning, you're getting paid squat (at least in comparison to banking and consulting people), and the work is really boring.
But let's be honest, how many people here are really passionate about banking / corporate finance? Don't get me wrong I think that I'm pretty good at my job and it pays the rent, but I don't exactly wake up every morning fired up to do yet another sell-side pitch that's going to get thrown into the trash by the client once we leave.
The way I view it: you start out at a big four and provided that you have a shred of competence and can stand the hours, you can continue to move upward both in terms of title and $$$. And let's be honest, the hours are bad in big four, but it doesn't get to i-banking level that often. So provided that you can put in decent hours and don't mind earning not great comp at the beginning, by the time you're in year 6+, you're pulling in over $150k and the hours start to get better. By the time you make senior manager / partner, you could be earning anywhere from $500k - ~$1m.
Now that's not going to make anyone a high net worth individual anytime soon, but provided you want to enjoy a nice 1% lifestyle without too many financial worries it pays the bills. You also get a designation and some great job security out of it.
Set that against my career path. Yeah I'm making more $$$ than my big four friends for the time being (and yeah I get that the PV of my income now is greater than PV of their income down the road but let's just ignore that), but the job security is pretty much nonexistent. Office politics get more and more important once you start to get more senior in the industry and it's entirely possible that I can get logjammed around the director level and not be able to get the promotion to MD. Let alone the risk of getting laid off if the economy tanks because of any of the number of systemic risks in the market right now (Trump / China banking instability / Korean War 2 / Subprime auto loans / Crypto currency crash) etc.. At that point, short of finding a job at another bank, I'm likely going to find a role where the compensation is substantially less than what I could be making and might actually be lower than my friends at the big 4 at that point.
And I know that some of the college kids on this forum who've never been in industry before are going to start commenting something like 0h banking iz definitely the best b/c u can go BB -----> PE ---- > Harvard ------ > Bill Ackman 2.0. But that's not what this discussion is about. Ignoring the exit options, I genuinely wonder whether or not big 4 or banking is the better long-term career path.
/ rant over
So tell me, is the big four route actually the path to job security and (relative) financial independence or am I missing something in my sleep deprived analysis?
Idk about TAS and other practice areas, but audit really does seem close to living hell. The guys I know often spend 60-70 hours a week doing some of the most mind numbing shit imaginable. The turnover in their teams is absolutely insane, too, and it's not only the junior staff. Lots of people jump ship at the manager and sr. manager levels cause they're either too burned out or know they'll never make partner or both. I suspect you're underrating how hard it is to keep moving up in the Big 4. The stat I've seen tossed around is that only a couple % of people ever make it to the partner ranks.
Long story short, Big 4 seems like the "grass is greener" scenario here, and you might just end up having that be an intermediate stop before making an exit to something else. Not knocking your ability or assuming you don't have the talent to make partner, just saying that the vast majority of people don't make careers out of working at those shops.
After striking out with IB recruiting for SA during Fall 2016, I ended up taking an internship doing Sales Management for a CPG company.
I didn't really like the internship (loved the company, didn't like the work, though the money was surprisingly decent), so at the end of the summer I was thinking about staying a 5th year at my undergraduate institution and getting a MaCC. Anyhow, I was able to connect with a partner at a Big 4 and he set up a two-day office visit for me in the week between the end of my internship and when school started. On the first day, I mostly schmoozed with more senior people, was shown around their office (which was super nice), taken out to lunch, etc... I was like "This ain't so bad! I could work here!" On the second day, they allowed me to shadow the junior people on-site at one of their large insurance clients which was located close to their office. Never again. It was like watching paint dry. So boring. Going through different transaction accounting records and making sure that obscure numbers match.
Anyhow, I was able to leverage positive performance reviews from the summer and previous consulting and finance internships into an interview and eventual offer in the FDLP of the F50 CPG company I worked for in sales management.
Anyhow, when I start my job next summer I'll be making a 15-20% more money (though not IB levels of course), working less hours, and not wanting to shoot myself like junior auditors always want to do.
That said, I do think being a partner at a big 4 firm would be a cool job. You have incredible c-suite exposure and make good money. That said, audit isn't something you can enter mid-career at a high level. It truly is something that you have to pay your dues in/climb the ladder (even more so than IB IMO).
Interesting thoughts guys. It sounds like you guys think the path to partner / senior vp at the big four is also pretty tough. I had always assumed it was pretty easy for the people who stayed since most people quit. Any other thoughts?
Former B4 auditor here now a TAS Manager. This is definitely a grass a greener scenario. Not sure if you were being specific to any B4 group or just posing a general question, but let me address both points:
Audit is literally the most mundane profession you could imagine. I know a lot of you don't get off about the work you do in baking/CF, but at least you're doing something. In audit, your client hates you and doesn't want you there, you're literally just checking off boxes of all the same shit you did last year, and for some reason it still takes weeks of hell to issue the exact same opinion you did last year on basically the exact same numbers. You add zero value for anyone. Even if you believe in the whole "protecting the investors and the market" hype, anyone who has ever been an auditor knows that's bullshit. If an issue ever arises, you just make it go away. How many qualified opinions have you ever seen? The only caveat here is the hours. Outside of busy season, it's really not that bad and nowhere near banking. In the summers, I'd basically show up at 9 and leave at 4 - unless you're on a 6/30 year end client and getting screwed all year.
TAS is significantly better. However, I will say that it's still not as interesting as other finance positions. Yes, you get to be part of the deal process but really as an outsider looking in and it significantly varies based on how much your client actually appreciates/utilizes your insights. A lot of the time, you're being hired just to confirm your client's expectations rather than to really contribute anything. The pluses here are that I still do enjoy the work - meeting with management, developing analyses, writing reports - especially when our client is engaged and interested. The hours aren't anywhere near as bad as banking - a rough week for me is 75 hours - probably 55 on average. And it's decent pay - not breaking the bank by any means but can afford a half-decent lifestyle in an expensive city.
I will say your comp numbers are pretty off. You are right that yous start with peanuts, but it doesn't really get that much better as you move up the chain (compared to other finance positions). The $150k+ figure for years 6+ is inflated - more like $100k+. The youngest I've seen anyone make partner is mid-late thirties and you start around $200k and move up a little each year from there. Very few B4 partners make $1M. Also, bonuses in accounting are shit - they're tied to the performance of the firm as a whole rather than your group. Even though my TAS team killed it last year, the loss leaders (aka audit) dragged the firm down so much we hardly got anything.
In terms of exits, audit really only opens doors to other accounting positions. Maybe you can go controller to CFO if you stay long enough. TAS can open some good doors if you bust your ass. I've seen TAS colleagues go to corp dev, corp strategy, IB or even a few PE. It takes a great deal of effort but it's possible. I will say that I'm heading to an MBA business schools ">m7 business school next year and am not sure if I could have gotten in had I worked in IB - mostly just because I had a lot more free time to study for the GMAT and get a good score.
As someone who has worked in Big4 and IB.......grass is way greener situation. Big4 IMO is only great coming out of undergrad and using the brand to leverage to an MBA or a gig that will set you on the path to get a decent MBA. from manager level in big4, it really isn't worth it.....as alluded above, numbers there are highly inflated; top performing managers (and in some cases senior managers) in big 4 get paid what BB analysts get paid. A top performing associate at a BB will get paid what a 1st year partner will get paid. pitchbooks, esp those that lead nowhere could be a pain, but as said above, big 4 works (outside consulting) is mind numbing and as a matter of fact more tiring than an IB gig. Most of all, it is way easier to exit to a decent gig from IB than big 4.............IMO, big4 only makes sense if you are coming straight out of undergrad for the brand or going in at the partner level where you have clients and need a more relaxed life. Otherwise, you will highly regret going in at any position in between.......
Take Big 4 over MM IBD to have more time? (Originally Posted: 12/11/2014)
I have two job offers: one in the tax division of a Big 4 firm and another in the IBD of a reputable MM bank. I don't want to do accounting or finance long term, but at the same time, I won't be disappointed if I do do it long term. What I really want to do is start my own business.
My grandmother was a professional chef and I grew up loving to cook. With that, I'm really interested in starting some consumer food product and believe that taking the Big 4 job will provide me with the time outside of work (when it's not tax season) to work on that. However, the MM bank pays better and has better exit opportunities (though if I go Big 4, I probably would want to work til partner).
I have an idea for a product and am working on the plan to bring it to market right now. I know if I take the banking job, I'm going to have to put it on hold for 2 years.
What do you guys think I should do?
If you take the banking job, you'll be able to save up some money to be able to start your business.
Honestly bringing a product to market isn't something that you're going to do by yourself while working either of these jobs in a reasonable time frame. If you have people to collaborate with that you trust then maybe the Big 4 job would give you enough time to work with them but otherwise the banking job would definitely give you more seed capitol and maybe the right connections for raising additional capitol.
You can always take the CPA and move to Big Four tax after working in banking. Moving from Big Four tax is much, much more difficult. Also, the percentage of Big Four employees who actually make partner is very low. Most leave after two or three years.
definitely take MM IB over big 4
I'd take the MM IBD position.
Are you kidding me? MM IB.
Why do you care about exit opps if you already know you don't want to work in them?
In the event that I end up in the field for the long term.
I hate how people on WSO talk about exit opps without even exploring their current opp.
Next, you should go to an accounting forum and ask the same question.
IB over big 4! big 4 has crazy hours already
depending on the time of year and your B4 clients, you'll only have slightly more time to commit to your product than you would if you worked in IB (as i understand; i'm in public accounting).
that being said, i would suggest taking the IB job because youd be able to bank more for your future project and, more importantly, in the process, you'll likely network with some smart people who could help you out with your venture in some way
IB over Big4. You'll be surprised to learn that 90% of the info regarding working hours on WSO is complete BS. You'll work hard but IB will help you reach your goals faster.
Choosing a job because it has better exit opportunities borders on insane to me if you don't want to do those exit opportunities to begin with.
Both careers (Big 4 and IB) are careers where you pay your dues to begin with and profit later on. Seems a shame to invest the time early on if you just plan on leaving the industry completely.
Might not be an option, but I'd argue that corporate finance would teach you a much more applicable skill set
There's also the stigma of being branded an "accountant"
Big 4 V. IB....Explain the Disconnect? (Originally Posted: 12/15/2012)
I am a soon to be big 4 audit intern in a major metro area and I spend a decent amount of time researching/speaking to people about the various demands of the job. There seems to be this overwhelming consensus that the hours at the big 4 and other accounting firms is hellish and people cannot cope. This is mostly chalked up to busy seasons with 80+ hour work weeks and approximately 60 hours or so during other times of the year.
On the other hand, as a avid wso browser, I see that most people in finance roles at IB, ER, etc work average weeks of 80+ hours and sometimes up to 100+.
I understand that the nature of the work in "high finance" is a bit different, and probably more stimulating than accounting, and furthermore that pay is way better. However, where is the disconnect coming from in terms of, for lack of a better word, complaining about hours? Is it really the pay, dull work, or something else; or are the people that choose to go into these two fields generally two different kinds of people?
Accounting people complain about long work weeks because they are staying in accounting and know its not going to change for a while. IB, ER, etc work very long work weeks but know that the hours will improve every time they move up and lateral into other industries (HF, PE are popular.). So overall, I think for IB, ER its more just seen as putting in your time and getting it over with, vs. accounting getting used to a new lifestyle overall that is not poised to change.
Bump
I believe that they are just different types of people. Some just want to make a decent living, not work too hard, and be generally happy. Others are driven to be at the top of whichever field they choose and are ready to make extreme sacrifices for that
Analysts in IB have hope, associates in audit/tax have a lot less
Big 4 IS consulting vs Lower tier IB (Originally Posted: 04/09/2010)
I majored in computer science at a non-target state school. I have a 3.4 GPA. In terms of prestige/money/exit ops which would you guys say is the better route?
Lower tier MM IBD M&A based in the South East - not one of the bigger players
Big 4 IT Consulting
education exit ops or career exit ops?
Prestige/Money = IBD all day everyday. Nothing touches IBD out of undergrad with regards to salary and prestige.
Exit ops = That depends what you're hoping to exit into. PE? Well obviously IBD. Not really sure how you'd ever exit IT consulting and where you'd go.
Dude IT consulting is so baller
Doing IT consulting from a non-target is the new killing it
I forgot the obligatory PJC comment:
I'd rather work as a bullet proof vest tester than Big 4.......let alone IT consulting.
Actually, I know someone who went to a pretty stellar MBA program from Big 4 IT Consulting. But this person had pretty stacked credentials - 750+, numerous extracurriculars/charities/etc., startup business.
That said though, I myself would pick the MM M&A just because it would keep more doors open. You could try for PE, or corp dev/industry, or IB at a bigger bank, or even jump to consulting. IT Consulting is quite specific in that regard, and won't give you the same variety of options to choose from.
hmmm good question, depends on who you are
money - IBD
prestige - IBD esp. M&A (doing IBD for your neighbors is more prestigious than anything you'll do at the big 4)
exit opps - obv depends what you want to do, but I think your closing more doors than you open with IT consulting.
but you need to think about how you want to spend your days and weeks, and make the call that's right for you. Chasing prestige is just chasing a midlife crisis.
Boutique IB vs Big4 Finance (Originally Posted: 09/07/2010)
Hi All,
I've been working as a Finance Graduate at a Big4 Bank since Feb this year in a management accounting role - Decision Support (Sales & Marketing). Work is good, but not where I see myself in the long-term. Salary is $60k all up. My background is Applied Finance and Accounting with a 80% wam.
I am really keen on an investment banking career and was offered a full-time role at a boutique (unknown) investment bank within Corporate Advisory/ corporate finance, with exposure to other areas such as Equities and Funds Management. This role is an unpaid role but the previous analyst said that paid offers were made a few months after working unpaid.
This opportunity can only start in October this year, meaning that I should roll off the grad program early If I decide to go with the IB option, with the benefit of working in an area that interests me most. At the moment, my firm does not have any corporate finance/ Wholesale Banking/ Investment Management opportunities available, so there is a high chance after the graduate program that I'll still be in Decision Support or even a risk-related role.
I am leaning strongly towards the IB option, but wanted to hear everyone's point of views first. Which option would you recommend and why? Time progression in moving to a bulge bracket? Anyone who worked in a small boutique, what were your experiences/ exit opps like? What salary can I expect from this type of role? General career progression?
Responses are very much appreciated!
go the boutique man, if youre sure you want IB
Choosing Big 4 Advisory over IBD? (Originally Posted: 11/06/2011)
Hey guys,
I was hoping to get some opinions on a decision I'm going to have to make fairly soon. I'm currently a junior at a target with a near perfect GPA and sophomore experience at a BB, leading me to believe I would have a decent shot of landing an SA stint at a BB this summer as well. However, I already have an offer for an advisory role with the Big 4 and am currently debating whether or not to take it (exploding offer). I've listed some of my thoughts below and would appreciate any feedback. Thanks in advance!
Compensation - Even though base salaries in advisory are rather low (60k without bonus), I think the hourly rate is higher. I feel this lower salary is also justified by the job security seeing as being an IBD analyst is almost like working on a two year contract without a guarantee for a job after.
Exit Opportunities - Granted, the exit opportunities coming out of IBD are generally broader (VC, HF, PE, etc.). However, seeing how many analysts coming out of BB's are being forced into b-school in this economic climate has not reassured me that things are going to be much better 2 years down the road. I'm also fairly confident that given my work ethic, I can either progress through the Big 4 hierarchy fairly quickly or line up a good job in industry with a client.
Culture and Work/Life Balance - This goes without saying but life at a Big 4 is obviously much more balanced than life at a BB. This definitely plays into my decision as well because I'm very hesitant to trade my health for some extra money during the prime years of my life.
Growth of respective industries - With Wall St. coming under scrutiny and all the increasing regulation, its only going to be mean less money for Wall St. firms and more money for advisory firms (currently making a lot of money by advising Wall St. how to best adapt and restructure themselves in the face of this regulation). I wonder if this trend is going to continue for the foreseeable future or if we'll ultimately see a reversal though.
These are just some of my thoughts but I realize that they may be too optimistic or naive. As such, I'd love to hear the experiences of some people on the board. Thanks in advance!
go big 4.. it's very possible to go to ibd later .not impossible like the monkeys make it out to be
[quote=corsaire]go big 4.. it's very possible to go to ibd later .not impossible like the monkeys make it out to be
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Haha, I love the video. It's possible, but really hard (possible depts to transition to IBD would be TAS/Valuation). What I'd recommend is that you try for IBD and if it doesn't work out, you could always move over to the Big 4 later on (much easier). You'll be better equipped with modeling skills, and it doesn't hurt to have a BB name on your resume.
Normally I try to make sure people are being realistic about Big 4 advisory versus banking or elite consultancies, largely because I think people buy the fairly exaggerated work/life balance angle sold by the Big 4 in the recruiting.
However, that's largely because most of the people on here have specific finance-related career goals, which doesn't seem to be the case for you. If you just want to build "a career" in general, I think the Big 4 are a really good place for that because you can get a lot of different work experience, you get a good name on your resume, you have a chance for promotion/leadership experience early, you can do rotations overseas, etc.
One thing I will say is that you can't count on using an MBA to transition from Big 4 to finance these days. I know several people who went to top-15 programs with that intention and they're all ending up back at the Big 4-albiet with their MBA paid for and perfectly solid consulting jobs in hand. Tough to know where the market will be in 6-8 years when you'd be exiting business school, but something to keep in mind.
One other piece of advice: If you do Big 4 advisory, I recommend doing it in a second-tier city (from a size perspective, not trying to start a fight about city quality.) Big 4 cost of living adjustments don't nearly represent the difference in rent/basic necessities, and unlike banking you don't have a big bonus coming to even things out.
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