Financial advisor vs investment banker

Hello Wall Street oasis,

I have read on these forums for a few months and I have a question for all of you. So my father is a financial advisor at a known BB in the Midwest and we are well off. I have just come across the topic of investment banking(I'm a senior in high school) and I was wondering what career path do you guys think is better? Also keep in mind that I am going to go to a state school in the middle of the country and I would like a work life balance BUT I also want to make a lot of money. So my question is would it be worth it to try to break into investment banking or should I consider working with my father? Thanks a ton in advance!

Comments (41)

 
Aug 6, 2018 - 4:52pm

Thank you for the fast response! But the thing is I am interested in both and could see myself being happy in both although the work life balance frightens me I will admit. I probably should I have said that in the first post my bad! But do you think I would have a tough time getting into ib from a ku, mu, u ark caliber of school?

 
Aug 6, 2018 - 4:59pm

If you break into IB your path to a well-paying career is pretty much set. You get the technical skills that are readily transferable into pretty much any skilled position in finance.

The problem with being an advisor is that you don't really get any hard technical skills that you can transfer into any solid finance position that's not just another sales role. Its incredibly hard to establish a client base, especially if you just come out of undergrad because you're so young that not many people will trust you with their money.

 
Aug 6, 2018 - 4:59pm

Since you're thinking about this as a senior in high school, the college you choose to go to doesn't have as big of an impact. Sure, it'll be a cleaner line if you go to a school that investment banks typically recruit out of but you'll have 4 years in college to shape your networking, internships, and activities to IB if you choose to go that route. I'm sure you'll garner a lot of IB advice from this site. Head over to advisorheads.com for a financial advisor forum pov. In the end you have to weigh the pros and cons as they apply to you. That being said, if you go to work with your father, you'll likely receive good training/mentorship. Take advantage of the time you have and look for internships in many parts of finance. These aren't the only two choices for work/life balance and money.

 
Aug 6, 2018 - 5:19pm

I think this is solid advice but one thing that he does have to realize is that the financial advisory business is not going to be as lucrative as it used to. Many people are flocking from the 1-2% annual fees that most advisors charge and putting them into passively managed funds for close to nothing. Sure, there are always going to be people that want to have a real person managing their money but when passive funds consistently outperform active funds who is going to want to get a pricey advisor?

 
Aug 7, 2018 - 3:21am

Flexskeet_1:

Is getting into investment banking doable from a state school in the Midwest

Yeah, it is.

IB isn't just in NYC.

But, brosef still has to slaughter his GPA.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

 
Aug 8, 2018 - 11:16am

Yeah, it definitely is. I go to a non-target private school in the Midwest, but have been cold-networking a TON in the last few months. I noticed a couple of things:
1. There are plenty of people in IB from state schools, and plenty of higher ups from state schools with top-level MBAs. It's not impossible to break in.
2. It's much harder to break in, especially to the main NYC offices. However, there are offices out there that are much more welcome to non-target school kids, and the possibilities to transfer to the main office after 2-3 years is pretty high.
3. It's firm dependent. I've talked to tons of state school students from Citi and GS, but very little from JPM and BAML. Target firms that will be interested in you.

 
Aug 8, 2018 - 8:42pm

Flexskeet:

Thank you guys for the advice! I think I will be attending Kansas university because it is the best school in my area and cheap would it be possible to get into investment banking from there?

No. You should go work with your Dad. If he has a big book, you will be set for life.

 
Aug 9, 2018 - 12:36am

He has approximately 250$ million in assests. Also I have met a lot of his clients and they are really great people, do you guys think that would set me up for a good future?

 
Aug 9, 2018 - 10:40am

Do what you're actually interested in. You're asking us what the best career path is but that's an incredibly relative question. Do you think you'd be happiest working for your father? Or do you want to get into IB?

Neither of these questions can be answered for you. You're just starting college, so you should try and figure out what you like the most and what works best for your goals, not what sounds most ideal in reference to your bank account.

From my experiences with people in the industry and spending time on this site, doing IB just for money doesn't seem like it works long-term. Intern for your dad next summer and decide from there.

 
Aug 9, 2018 - 10:47am

If your dad has a $250mm book and has explicitly said to you that he will make you his successor, you should be sprinting through a brick wall at that opportunity.

Edit: This is assuming you're actually interested in the work. I'd rather be undercompensated for a job I enjoy than overcompensated for one I'm miserable in, but that's just me.

 
Aug 9, 2018 - 1:20pm

Yes I really enjoy acting as a financial advisor I like the upper level investment banking stuff but not so interested in making pitch books 100 pages long and working 90 hours a week in a big city. And yes my dad said I will be his successor and he is only 46 so he could have 400 million aum by the time I am done.

 
Aug 9, 2018 - 1:27pm

Honestly I was just interested in making 150k when I'm 22 in investment banking and I like what my dad does but I never thought it could make me enough money to which I would like to

 
Aug 11, 2018 - 7:52am

If your dad is only 46, go gain some experience doing something else for at least a few years before you join him. That will give you some standalone credibility with clients instead of just the guy who hopped on his dad's gravy train.

 
Most Helpful
Aug 11, 2018 - 9:08am

This is great advice.

Also, even though you're dad is only 46, he likely isn't as tech aware as you. There are probably many things you can do to create value for his practice (automate certain things, bring marketing efficiencies, social media, etc.) Client succession is generally a huge concern.
1. Will they work with you when he retires?
2 Big one - Will their kids work with him / you when client passes away.

That's an area where you can create tremendous value. You're blessed with not having to worry about driving revenue which means you can spend time building services that will both protect and grow revenue. I've worked with some estate planning law firms that do a nice job in this area. They have a formal client succession program where they bring in client's family each yr for updates (and charge a fee to do this - brilliant). This way they get to continue providing trust services upon M&D's death and bring the kids into their practice for a long time. You could establish things like that.

But at the end of the day, wealth mgmt is heavy on sales and relationship building. If that's not you, don't even bother.

 
Aug 11, 2018 - 4:16pm

Yes, and I'm giving you some aspects of "doing" financial advisory with your dad that will actually help his firm. He has already built a fantastic practice. Your immediate value in "doing" financial advisory will be in helping him build a mote around the practice WHILE you learn the business. Part of your decision would likely include what you would be doing, like doing, etc. You have no way of knowing if you like IB until you actually do it via intern. With the FA track, you have the luxury of (assuming your dad lets you and wants you to be involved) working with / helping your dad throughout UG to provide value to HIS business and see if you like the retail investment business.

Take money out of the equation (you would likely make far more working with your dad and eventually owning the practice) than in IB as I'm sure he's a 7 figure guy and only the survivors will get there in IB. These are vastly different businesses with virtually no similarities. Don't forget that your dad is in the retail business which means spending lots of time with the public. Is that for you? It requires a level of relationship skill (especially when dealing with their personal money) that few on this site possess. It's not about technical skills as you can use 3rd party managers or hire a CFA for that. It's about getting them to invest (and stay invested) with you, solving their financial issues, and being their financial go to. Very different environment than IB and completely different skill set. Would be very odd for one to enjoy both worlds, so which one are you?

 
Aug 12, 2018 - 2:35am

Well first of all my dad is not a 7 figure guy. He has explicitly told me that he charges less than the average financial advisor because he wants to give them a good deal. I would assume he makes around 200-250k, as he has never told me. But do you think i could make as much money working for him as ib? Also if I were to do ib I could transfer to a school like Indiana for ib with ease would that be a better option? Also can this discussion consist less of "do what u like" as I have already taken this into consideration heavily and I enjoy helping with my fathers work and talking about stocks but am also am intrigued by ib and the high salary that it entails.

 
Aug 16, 2018 - 3:06pm

your dad is 46.... in 10 years he is 56 and you are 27... he is prob still working... so a clean idea to what his plans are would be helpful so everyone is on the same page, I have a good friend who took over his dads book but his dad didnt retire until his son was 40... also some firms will make the junior broker hit tiers to take over a book so its not as easy as your dad just saying "here you go"...

if you like sporting events, golfing, and leaving the office at 3pm.. this is a great career path

 
Aug 16, 2018 - 11:42pm

I don't think he plans to retire anytime soon so that could be an issue and to whoever said 200-250k in finance isn't a lot, get ur high heels off of Wall Street and come down to reality where the average senior financial analyst is making 80k!

 
Aug 20, 2018 - 12:32pm

Which one is "better" is entirely about your goals, wants, and perspectives. Do not be fooled by the "work-life balance" and "unlimited earning potential" that many in the financial advisory field discuss as if its a given. Establishing a viable book of business takes a decent amount of time and effort; failure to establish a strong client base substantially limits your earning potential.

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