I've been in contact with ppl from the AM firm from which I received a full-time offer (lines of PIMCO, BLK, Fidelity..), as I still am having trouble with my decision (IB over AM) and I'm starting to be annoying af.
The folks I talked to were from the equities/FI divisions. I was surprised to see that a great deal of their PMs followed a basic trajectory: analyst, associate, then PM all at the same firm. However, I was too shy to ask about comp progression. I'm taking the IB offer as it pays significantly more. But AM, in the grand scheme of things, is an overall better career path, especially with the stability and high retention rates at the top firms (although it is still vague to me if the work gets more difficult for PMs, which is not an issue).
With regards to AM, does the compensation increase substantially, moving up the ladder? If someone could enlighten me about this, would really appreciate it. Thanks!
Personally, I would take an AM offer (equity or FI) at any of those firms over IB because of the much better lifestyle and because I want to be an investor long term. If that is your goal I would suggest the AM role and do not worry about short term compensation because long-term you will likely earn just as much there (if not more) with significantly better lifestyle. Just my thoughts though!
Appreciate your thoughts!
I'm aligned with your path as well, in the long run. I don't really care much for lifestyle now, I don't really have much of a social life. But yeah, I want to be a PM myself. Learning that it's actually possible in Europe to easily move from IB to AM put even more into it
Do you have an idea how long it takes before, yknow, you're paid "big bucks"? (I swear I'm not as venal as I might sound, just curious!)
In my experience, it would be extremely difficult to move from IB to AM. I would not count on it at all.
I actually don't know each step of the ladder but I do have a data point for T.Rowe Price's UK Equity Research Analyst Position being at £65k (which I thought was very impressive) and I imagined that Fidelity and PIMCO would pay similarly. Obviously from there it is going to keep increasing...
One thing I would caution you about is the difficulty to get into a PIMCO/Fidelity/T.Rowe type shop, particularly as you get more senior as the people already there do not want to leave which makes it very hard to break in. Just food for thought if you're sure you want to be in public markets. If you're interested in PE then definitely the IB route is the better choice
Hi. This is probably a stupid question, but what is it about these firms that mean people tend to stay for a long time?
I’m sure this is a very nooby question but I’m bouncing all over WSO trying to find out as much as I can as a current undergrad.
I work in one of the firms mentioned in equities in London and can offer some advice:
- Pay in AM is significantly lower than IB for I would say the first 2-4 years. In my experience from year 5 I was earning significantly more than the equivalent level in IB (from the arkesden salary surveys).
- AM comp however is very dependent on personal performance (ie. ability to pick stocks), I had very strong performance, so this would not be the case for everyone, but was true in my case. Generally salary is less than in IB (as is the case in any AM or HF) but bonus + deferred comp can be higher.
- It is very fair that you are paid less for the first few years in AM, as: 1. Your hours are much less than IB. 2. The general environment/ people tend to be nicer. 3. You are paid to learn... in AM there are not many mundane tasks for grads to do, really you don't add much value but are around to learn and to become useful after a few years. In IB, you immediately add value to the organisation via formatting PPT presentations.
- I honestly wouldn't worry much about pay in your first few years. It doesn't feel like it to you now, but the difference between making £90k or £60k in your first year is totally irrelevant over time. You should not base your decision on this.
- As you say, many PMs tend to come through the ranks at the same firm. AM very rarely if ever hire from IB in my experience (either hire from research or other buy side shops). If you want to be an AM PM, I would very strongly advise you to take the AM role now.
- I think your decision should come down to what you want to do. If you want to work in IB long-term, clearly work in IB. IB at the higher levels is a sales job. Lots of students sniff at this, but if you love sales and love working extremely hard, this is probably a great career for you (full disclaimer I have never worked in IB). If you want to do PE, go for IB (I think it is extremely hard to go from AM to PE in my experience, but in IB you will be bombarded by headhunters asking you to interview in PE). If you want to do HF, both IB and AM work (not sure to be honest which is better... would probably decide based on which you prefer to do LT in case you don't get a HF offer). If you want to do AM, definitely go for AM.
- If you are good at any of these roles, you will make a lot of money... successful PMs in AM, and MDs in IB make millions of £ per year... you should base your decision more on what you like and what you think you will be good at, than anything else.
Whoa .... thanks for the response! (in retrospect I think i should've posted in this forum earlier lol)
I think it could be said that I'm more inclined to AM in the long run, and given the information you provided i think I'm a little relieved.
Kind of irrelevant, but would like to hear your thoughts, if you could
I'm hoping to pass CFA level 2 (results jul 29th). The knowledge I've gained is obviously huge. from your experience, do you think it's going to add anything exceptional to my skillset, given that my previous experience has only been in M&A?
I don't mean to be blunt but no I don't think so.
CFA is not bad to do, and does give you a grounding in some basic finance concepts that is definitely a plus, but the real world of investing is very, very different to the academic world of the CFA. It is certainly nothing exceptional to do it - many people in AM do the CFA, and those that don't pick up the concepts (and many more) on the job.
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