Investment Banking vs Consulting

Hey monkeys,

This year I am a sophomores and am deciding between FO finance roles and management consulting. I was just wondering how some of you made this decision and what swayed you to finance/consulting?

What are the differences between the ideal candidate for each field (in terms of GPA, work experience, leadership experience, fit, technicals, etc). I would be recruiting for Toronto, if that helps.

Region

Comments (166)

 
Oct 7, 2017 - 8:55pm

There is a variety within both, but the FO requires more technicals. They're both competitive to get in at the bigger firms. Consulting can integrate multiple fields like involve IT or there is like strategy and usually involves travel. It just depends on what you're more interested in, so quality internships are definitely important and to determine that too.

 
Oct 8, 2017 - 11:12pm

Courtside:

Bump, I also can't decide between the two. Which requires a higher GPA?

I was interviewing in both IB and Management Consulting before graduation. I interviewed with a few M&A shops as it was my top pick, but ended up only getting an offer from a consultancy.

The IB shops require a higher GPA than consulting.

"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

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Oct 9, 2017 - 11:47am

Isaiah_53_5:

The IB shops require a higher GPA than consulting.

While on average it might be true that IB:s require better GPA:s than consulting firms, it is not entirely true in all cases. MBB:s require top grades as well...

Array
 
Oct 9, 2017 - 1:40pm

I actually found that was the opposite when I did OCR recruiting. McKinsey and Bain (the only consulting firms I wanted since I wanted to have buy-side exit opps) had significantly higher GPA requirements and wanted all these vague leadership qualities and what not.

I had a 3.9 and didn't get an interview with either McK or Bain, but got GS, MS, BAML, Citi, LAZ, EVR, Moelis, Barclays on the banking side, and actually some buy-side UG opportunities like BainCap and KKR (didn't convert either of those FML haha). Apparently, my resume read like textbook banking though, so might be less to do with grades and more to do with my background.

 
Oct 13, 2017 - 6:55pm

One consideration is that consulting recruiting outcomes are more binary than banking. "MBB or bust" rings more true.. there's a big perceived gap between the top 3 firms and everyone else. If you can swing MBB, its an awesome option, but otherwise banking has way more spots that offer comparable upside (~2,000 IBD vs. ~200 or less MBB consulting). If you want to be on the strategic and operating side, you can start in banking, wade over to PE, and then use an MBA to accomplish the trifecta that'll get you en route to the C-Suite.

 
Oct 14, 2017 - 1:21am

Having gone through both processes, consulting interviews test your raw intelligence and creativity on a much deeper level than ib interviews. The consulting case interview is designed to test how you approach a problem and come to a solution in a structured way. IB interviews generally rely on memorizing formulas/answers from guides. While both take a lot of time to practice for, and assuming that the fit is equal for both fields, I think that consulting interviews are much more difficult. On the other hand, consulting interviews give you much more of an opportunity to stand out by showing how smart and creative you are whereas with IB interviews, almost everyone will get most of the technicals.

 
Oct 14, 2017 - 5:52am

Have worked in both IBD (M&A) and consulting several years each. While IBD is more focused on specific tasks (i.e. pitchbooks, modeling, reporting into a specific manager/team, fixed location, and might even be fixed industry/segment) consulting is more open and flexible.
Consulting:
- travel to various countries, clients
- virtual teams assembled for each client or case (from what I've seen in my line)
- huge variety from restructuring to NPD, innovation to relaunch/GTM
- you might develop a bigger network over time (more international, more industries, more clients across countries)
- my junior consultants have more senior management exposure with a consultancy at client site (this might also be possible in banking but it wasn't the case for me or others I have met. Analysts not meeting c-level in meetings, ..)

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Oct 14, 2017 - 5:53am

Consulting vs Investment Banking (Originally Posted: 12/18/2010)

Hello. I am 14 years old. Unlike other kids my age, I am really interested in money, investing, investment banking, and consulting. I know how to invest, and I do invest. I also know all about how businesses and companies are run. My ultimate goal is to eventually have a job that makes 2 million dollars and up, annually. I'm in eight grade at a private school. I get good grades and will study my butt off in highschool! Here are some questions I have regarding these careers.

  1. Do I have to go to an Ivy League college like Harvard to get a job in the i bankink or consulting fields?

  2. Why do people tell me I have to start a company and/or business to get rich? Why can't I get a high paying job? Can you not get rich by working for someone else?

  3. New York or Chicago, where should I plan on living during my career?

  4. In these careers, can you retire in your 40s to 50s with a florida mansion, yacht, private jet, nice car, etc.?

  5. Which is a better career (pay, quality of work, etc.) to go into, Investment Banking or Management consulting?

  6. If i go into investment banking, should I stick with i banking my whole career, or go onto PE firms or HF?

  7. If i go into consulting, should I stick with consulting my whole career, or go into fortune 500s and aim at becoming a senior position?

Please help me. Even though I am 14, I am very anxious at my future career. Please help me!!

Thanks,
Ben

 
Oct 14, 2017 - 5:54am

Kids like you get raped for all they are worth by a system that smells desperation like sharks smell blood.

Still not sure if I want to spend the next 30+ years grinding away in corporate finance and the WSO dream chase or look to have enough passive income to live simply and work minimally.
 
Best Response
Oct 14, 2017 - 5:56am

Ben - I know it feels like you're growing up a bit and jobs and money sound like fun, but trust me - you have plenty of time. For some perspective, here is a list of things you still have to do and experience before you even think about investment banking:

1.) Getting your drivers license
2.) Making out under the bleachers at high school football games
3.) Shitty summer jobs
4.) High school girls
5.) Losing your virginity
6.) High school graduation
7.) COLLEGE (oh, college)
8.) Shooting shitty vodka with your freshman buddies
9.) Sticking your tongue down the throat of drunk college girls
10.) College sporting events and tailgates
11.) Spring break
12.) Toga parties

And 100 more I haven't listed. You have some serious good times ahead dude, don't rush through 'em. The only thing you need to focus on now is getting the best grades you can so you can get into the best possible college - future Ben will handle the rest when the time comes, trust me.

- Capt K - "Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
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Oct 14, 2017 - 5:58am

First of all, I think it's pretty impressive that you're already considering careers at 14. When I was your age, I was too concerned about shaving to even care about a job.

I would keep working my butt off at school and making sure you enjoy your time there. Go out, make friends and just do lots of stuff.

I would also make sure I get into an Ivy school if I were you. Although it doesn't guarantee a job, it makes things a lot easier.

Once there, network like mad but also make sure you go out and have lots of fun. You'll regret it later on otherwise. Money and job isn't everything.

 
Oct 14, 2017 - 6:00am

I did. Why shouldn't he? If someone's motivated and can identify their interests early enough, what's keeping them from exploring and learning about fields? The amount of knowledge I picked up from this site alone in a period of six weeks was absurd. He could have had the same immersion process I did.

I am permanently behind on PMs, it's not personal.

 
Oct 14, 2017 - 6:01am

OP why dont you stop wasting our time and go back to trolling internet pedophiles.

You know you've been working too hard when you stop dreaming about bottles of champagne and hordes of naked women, and start dreaming about conditional formatting and circular references.
 
Oct 14, 2017 - 6:02am

Watch this:

That's all the info you'll ever need (I can't believe I'm the first one to post this)

Pretty women make us BUY beer. Ugly women make us DRINK beer.
 
Oct 14, 2017 - 6:05am
  1. No, but hard if you don't
  2. Lol wow you'll get a better understanding of how life works after your grow some pubic hair
  3. New York
  4. Is it possible? Yes.
  5. Lol seriously? This is a serious question? If IB were better, people wouldn't go to McKinsey over IB. If consulting were better, people wouldn't go to GS over consulting. You'll learn about "preferences" after you kiss a girl for the first time.
  6. You probably won't even make it that far
  7. Consulting all the way
 
Oct 14, 2017 - 6:11am

^^ I think he meant obsessed. lol.

I'd suggest some SAT prep classes (especially the citical reading and writing part) instead of worrying about entering IB or Consulting and then 'exit opps to PE and HF'.. jeez..

 
Oct 14, 2017 - 6:12am

IBanking vs MConsulting - Intellectual Work (Originally Posted: 12/21/2017)

I wonder between I Banking vs Mgt. Consulting, which one tends to have more intellectually stimulating work. By that I mean you have to really think and analyze things for your work rather than just putting things together repetitively. This might be a controversial topic, but opinions from those of you who know both industries could really help grads to decide on the industry they want to go to.

I understand that to get into IB at major banks or Mgt. Consulting at MBB, one has to be intelligent to a certain extent already. What I'm trying to find out about is the actual work itself, and as one moves up the rank in these two industries, how do the nature of the works change for them. Thank you!

Array
 
Oct 14, 2017 - 6:13am

I'd say it depends how you define an intellectually stimulating work. For juniors, IB would be more repetitive because at the end of the day you are mainly asked to build/update valuation models and slides accordingly, so I'd say that the work is not very diverse but can be more technical than consulting, which is a form of stimulation IMO.

In consulting you never know what you are going to do, and even after 3 years, you could have worked on very different missions that were never the same but I would say you go less in the details of what you do and similarly, it is just putting together relevant pieces of information in a document.

This might evolve differently with seniority but I wouldn't know. I believe IB is slightly more stimulating in the sense that you always have a very short time frame and have pressure from your hierarchy, eventually requiring from you to deliver a quality job very quickly, more often than in consulting.

 
Oct 14, 2017 - 6:16am

they aren't all that different, regardless of whether you're a junior or senior.

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Oct 14, 2017 - 6:18am

Consulting or Banking for entry level? (Originally Posted: 02/12/2017)

I got offers to work at IBM Global Business Services for consulting and a boutique investment bank for investment banking. The boutique is like a 10-men shop. I would like to go back to school for a top MBA program after working for 2-3 years and then work in investment banking or PE. Should I go with IBM for consulting or the boutique for investment banking if my goal is to get an MBA after a few years and then work in IB or PE? Thanks for your comments.

 
Oct 14, 2017 - 6:19am

It is my understanding that IB experience pre-MBA is best if you want to do IB after business school and that PE works similarly. On top of that, you could lateral from your boutique into a more recognizable firm down the road if you want.

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Oct 14, 2017 - 6:20am

If a top MBA program is your top priority goal, I would say that taking the consulting gig at IBM would be a better choice. It would give you a better brand name as well as a consulting experience that b-schools tend to respect. In terms of post-MBA career, you can go into IBD without pre-MBA IBD experience, but going into PE without pre-MBA PE experience should be extremely difficult. If PE is what you're looking for, taking the boutique IBD role and making your way into a PE role before going to MBA should be the only option.

 
Oct 14, 2017 - 6:23am

if your goal is mba>ib/pe , then IBM consulting gig is best as it will give you a better brand for top mba placement.

on the other hand, if an mba is not a priority, going into an ib boutique and trying to lateral to an mm ib or even mm pe could be a better option.

the above poster is correct in saying that post-mba switching to PE is difficult without prior IB experience.

hmm
 
Oct 14, 2017 - 6:24am

While I didn't work full-time at big blue, I interned there 3-5 yrs ago. It doesn't have the flash that those above are stating it does on the resume. I get questioned as to why I went from corporate finance/old tech to finance roles. I would do the IB role if you want to go MBA>IB/PE. You will have the skill set and deal experience to talk about in interviews, that's all that matters.

Also I'm assuming you'll be in Armonk NY or Fishkill, for the IBM gig vs a major city for the IB gig?

26 Broadway where's your sense of humor?
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Oct 14, 2017 - 6:25am

Boutique Investment Bank vs Second Tier Consulting (Originally Posted: 10/30/2013)

Hi, I am in my junior year of my coop undergrad at a Canadian university
I will be working at a boutique investment bank in Hong Kong in the coming winter term and looking for an internship placement in the following summer.
Should I stay with the boutique for IB or work at a large company for a less IB-related role (e.g. consulting at a big 4 accounting firm), assuming both options are available.

I don't have too much employment experience in the financial industry so I am hoping the coming 8 months can boost up my chances of getting into IBD or MC when I graduate.
Please also note that, since I am in a coop program, I still have 2 to 3 work terms (i.e. internship placements) before I graduate.

Thanks!

 
Oct 14, 2017 - 6:26am

ngtheboss:

Hi, I am in my junior year of my coop undergrad at a Canadian university

I will be working at a boutique investment bank in Hong Kong in the coming winter term and looking for an internship placement in the following summer.

Should I stay with the boutique for IB or work at a large company for a less IB-related role (e.g. consulting at a big 4 accounting firm), assuming both options are available.

I don't have too much employment experience in the financial industry so I am hoping the coming 8 months can boost up my chances of getting into IBD or MC when I graduate.

Please also note that, since I am in a coop program, I still have 2 to 3 work terms (i.e. internship placements) before I graduate.

Thanks!

What're your longer term goals?

 
Oct 14, 2017 - 6:29am

Post MBA INVESTMENT Exit Opps: Consulting vs IBD (Originally Posted: 10/21/2017)

Hi All,
I am interested in hearing about the finance/investment related exit opportunities that people have seen pursued POST MBA for banking and consulting.
I am speaking about someone who joins banking or consulting after MBA with no experience in either beforehand and considers exit within 2 years.
It feels that the rules of the game are very different once the MBA barrier is crossed and you enter the workforce as an associate vs an analyst.

It seems that PE or similar investment roles become more or less impossible post MBA for both banking and consulting but are quite possible from both beforehand.
For banking, it appears that the transition to investment firms happens only as an analyst (and very quickly) or at a partner level. It seems to happen very rarely at associate level as the process is designed with headhunters securing analysts early and few roles available at more senior positions.
I imagine it is the same for consulting but am unsure and the variable is that consultants have more operational knowledge vs IBD analysts pure financial modeling knowledge and operating decisions become more important with seniority in PE.

As the non-finance exit opportunities seem to be better from the consulting side and the fact that it seems to be a more interesting and varied job, I am considering pursuing this in the hope that a transition to investment (based on the development of business analysis skills) is not impossible but understandably less likely.

Does anyone have a sense of
1) The relative probability of securing private-market, special situations or distressed related investment roles from consulting vs from banking POST MBA? (even more helpful if you could compare the relative probabilities vs their pre MBA equivalents)
2) How these relative probabilities from Question 1 look in London vs NY? Appears that London is more consultant friendly.
3) The best groups within banking to join (eg LevFin vs TMT etc) to position for a post MBA exit?
4) The best projects within consulting to focus on (PE due dill vs turnaround vs Healthcare etc) to position for a post MBA exit? Maybe best not to focus on specific area?
5) What firms operate internal private investment units (eg GS PIA, GS SSG) and what the relative difficulty of transitioning to these groups internally is vs external buy-side firms?
6) If these transitions become harder at VP vs Assoc level? Logically I assume yes for reasons outlined above + salary issues but if this is incorrect clarification would be helpful.

For the sake of this discussion:
1) Let's assume consulting is MBB and banking is top 3 BB tier firms.
2) Let's assume all forms of private investment are of interest (credit or equity). Info on VC/Growth equity or HF is of interest but PE the focus if possible, please.

Thanks in advance for your advice!

 
Oct 14, 2017 - 6:31am

MBB Consulting Over Banking in this Climate? (Originally Posted: 09/24/2008)

With likely weakened deal activity over the next few years, would going into consulting be a better choice? I don't want to be doing pitches all day...

 
Oct 14, 2017 - 6:33am

im sure consulting is going to be affected by this downturn as firms cut back on certain services.

but it will be more secure than a bank laden with mortgage backed securities.

if you went to a boutique that wasn't suffering in the subprime mess, it might be better.

but i would suggest MBB consulting over banking in this climate.

------------ I'm making it up as I go along.
 
Oct 14, 2017 - 6:34am

consulting is diversified over the entire industry spectrum (although i guess you could argue so is m&a, but in the downturns deals are definitely a lot fewer)--while there will probably still be a downturn, it will definitely be not as bad as banking--especially since consulting firms have countercyclical offerings (cost/expense management, etc). but don't let the recruiting bs that they spew out fool you--they'll all be seeing lower revenues too

 
Oct 14, 2017 - 6:36am

If you are really having trouble deciding between one or the other then you probably shouldn't do either. Bankers and consultants are a very different breed and lead very different lives. To do either well, you have to be 100% sure that is what you want to do. If not you will find yourself a miserable and looking for a way out pretty quick.

https://www.accountkiller.com/removal-requested
 
Oct 14, 2017 - 6:46am

Consulting gives you a completely different skill set than a banker. If you are considering MBB as a back-up/alternative to banking, think about why you wanted to do banking. Many of the reasons to do banking (get into PE, make lots of money, be in NYC) don't exist for consulting. In terms of pay scale...check it:

25-26 year old's at Bank's make 300-350K (somewhere in the associate area).

25-26 year old's at MBB make 150-200K.

The difference becomes more disparate as experience increases - an EM at McKinsey probably makes about 250K max while a VP at an investment bank moves towards a half million.

The exit ops are completely different - in consulting, you can move into strategy/industry roles, while in banking you move into buyside finance or corporate finance roles...etc.

 
Oct 14, 2017 - 6:47am

big unit,

Excuse for being naive, but I have to ask... I see as many MBB alumnus at respectful PE firms as BB analysts. Are they expected to carry different roles at PE firms, say, MBB alumnus involved in operational roles while BB analysts in investment role etc.

Thanks in advance.

 
Oct 14, 2017 - 6:48am

I stand by what I said. Just as going to Harvard over MIT is almost always a better idea, so is going to MBB over banking. Thanks for the analogy.

Big unit your understanding of exit opportunities is pretty limited. Consultants have extremely similar finance exit opportunities (PE, HF, corp development), and of course much broader non-finance exit opportunities.

curiousG, I would say that it depends. Most of the people you see are probably on the deal side - i.e. they have the same roles as the ex bankers. A few PE firms have dedicated portfolio teams that are usually full of consultants or ex-industry folks.

 
Oct 14, 2017 - 6:50am

big unit, you're a fucking idiot.

Many of the reasons to do banking (get into PE, make lots of money, be in NYC) don't exist for consulting.

Some would argue that going to the buyside is easier coming from MBB. Audax, MCP, Golden Gate Cap, and Bain Cap are some PE shops that prefer consultants over bankers. On a per hour basis, consulting and banking pay are the same. Yeah bonuses might be a lot better in banking than they are in consulting, but you're not working nearly as much. Of course you can be in New York for consulting.

Conclusion: big unit is a fucking idiot.

 
Oct 14, 2017 - 6:52am

Out of the consultants I knew who were interested in doing large cap PE, they placed almost as well as the bulge bracket bankers I knew. I did a few PE interviews but wasn't really interested in it - for the guys who were, they got interviews even at the non-consulting friendly places (KKR, TPG, etc.)

I'm sure the bankers are going to freak out, etc. etc. but that was the reality. Maybe it was a product of the bull market, I don't know.

Also, it is really stupid to cite the better money as a banker. Factor in the instability in bonus pool, lay-offs, hours, and the fact that post-tax, your bonus is not at all significant when viewed even in a 5-year horizon. I don't want to get into a banking vs. consulting argument (though I know some of you are itching for it) but they are fundamentally different industries.

Oct 14, 2017 - 6:53am

this thread is basically each side trying to convince the other side which is better. ideating, you mentioned that you knew consultants that got into large cap PE, and thats great. all stars, regardless of background will end up in good places.

however, i still think banking provides the better platform to go into PE and other high-paying exit opportunities. how many consultants from smaller or less well known firms (not MBB) get into PE? not many. how many bankers do you see from "less prestigious" (notice the quotes) banks get into PE. quite a lot.

and to add to that, i'll take my "unstable bonus pool, threat of layoffs, etc" 120-150k salary (that's right, a 90k bonus is still a lot of money after taxes) over 60k, anyday of the week. but hey, maybe i'm a risk taker.

 
Oct 14, 2017 - 6:56am

I love how many lives I ruin on WSO... first joefish, and now, this clown! this is actually quite amusing :) it's quite powerful how some mere characters, emanating from my fingertips, on a computer screen can provoke such an intense reaction. I must be pretty f*cking awesome.

go back to your second-tier job... oh, wait, you don't even have that :)

 
Oct 14, 2017 - 6:59am

"Many of the reasons to do banking (get into PE, make lots of money, be in NYC) don't exist for consulting."

Typicalbanker, you seemed pretty outraged by the above statement. Are you a consultant? I stand by what I said and I'm obviously right.

  • Most PE shops don't look at consultants. I'm glad you mentioned Audax and a handful of other PE firms that take consultants. Lots of smaller firms take them. Of course, EVERY OTHER PE firm takes bankers aside from a select few. So thank you, in this case, the exception proves the general trend.

  • A 1st year consultant makes about 50% of a 1st year banker/S&T. 75K all in, versus 130-150K all in. Though in a down-year for finance such as this, 1st year bankers are pulling closer to 110-130K, still quite a bit.

  • Most BA's/AC's at McK/Bain don't work in the city, there are a very limited number of slots limited to a few Northeast schools (I worked in a different office)

 
Oct 14, 2017 - 7:02am

Not sure what it's like at the mega funds, but at my PE shop (MM), we have two verticals in our "investment professionals" listings. You wouldn't know it from the site (hell, I didn't know it until I got here), but there's a team that strictly does origination (all the ex-bankers/finance types) and there's a team that strictly deals with operations (all ex-consultants). On the junior level, however, the background is heavily finance-biased.

Regarding the original topic, MBB is always good but don't be fooled into thinking that it's a "safer" place than banks (or that you'll even get into one for that matter). MBB is quite selective and there are many people who fail on the case studies (lots of bankers for that matter). I have friends at the big 3 plus other notable firms such as monitor and parthenon and all have talked about ducking the swinging axe.

 
Oct 14, 2017 - 7:03am

Well this definitely seems like an opinionated bunch, so hopefully I'll get some responses...

Out of these three career choices for right out of undergrad, which would be the best?

3 Positions:
1.) bulge-bracket investment banking
2.) McKinsey Corporate Performance group (mixture of strategy and financial analysis, analyst is the corporate finance specialist in the group)
3.) Bain generalist

 
Oct 14, 2017 - 7:04am

There is no "best" out of undergrad -- you need to find out which one suits your personality.

1) BB Ibank- depends on which one. Many are very rocky these days and deal flow is slow in some sectors. If you enjoy corporate finance including accounting, cranking through models, formatting, etc., ibanking would be good for you.

2) I'm not sure what it does but it doesn't sound the same as being a business analyst at McKinsey. Obviously, McKinsey is a fantastic place to work but not sure what it'd be like for their "corporate finance". I will say that when our more senior guys (VP/SVP) checked out MBA resumes, McKinsey Corp Fin wasn't that interesting to them.

3) Bain is also a great place to work, depending on what office you go. Great opps into Bain Capital. But again, are you interested in learning operational efficiencies and making a company run smoother through "fixing" different parts of the company? Also, do you like case studies? A few of my friends absolutely hate them and just plain suck at them so they avoided those types of interviews altogether.

 
Oct 14, 2017 - 7:05am

funny, all of these arguments seem to focus on how easy it is to get into PE.

just rhrowing it out there, PE is not going to be as big for the next 10 years (it's a cyclical business, big in the 80s, small in the 90s) as investor appetite for shitty debt goes down.

for all the bs that "operational PE" shops spew, let's be realistic...an operational improver can increase market value usually what, 5% (with no cap structure alteration)? without the leverage, there is no way that all these PE funds are going to keep clearing their IRR hurdles. personally, i think this bodes badly for both the consultants and the bankers...

 
Oct 14, 2017 - 7:06am

i like how people talk about MBB as some sort of backup.

i went to a top target and getting into mbb was significantly harder than 'bulge-bracket' banks. the banks regularly took dumb jocks or kids with a passing interest in econ who got barely form a proper sentence. lehman and Citi were well-known for taking 3.0-3.3 GPA kids who had little going for them.

by contrast, you didn't even get an interview at McKinsey without a kickass internship and a very high gpa. then, very few people made it past the first-round. it's actually harder to bs case studies since they're asking you to do math in your head and do numbers faster.

at my pe shop we take a good, hard look at McKinsey ba's analysts. and we definitely prefer them over random analysts from non-GS/ms banks.

just had to put that out there.

 
Oct 14, 2017 - 7:07am

How to clearly and precisely spell out the differences between IBD and strategic consulting (Originally Posted: 04/09/2012)

Hi everyone,

Not so long ago I had an interview for an internship in IBD, two guys interviewed me: a junior and a senior.

The interview with the junior was ok, however the one with the senior didn't go too well because after I answered the question "why do you want to do IBD" he kept on saying the same identical phrase: "you can do that at McKinsey" after whatever reason I gave him for doing IBD.

My specific reasons (other than the ones which are actually the same as for doing financial consulting at McKinsey such as competitive and international environment, etc....) were two:

1) personal interest in finance - I have pursued a Bsc Economics in my undergrad and I learnt corporate finance in my free time

2) attracted by how the principles of corporate finance can be applied to any firm across a wide range of industries

My question is: how does an interviewer want the interviewee to spell out the differences between IBD and strategic consulting, such as financial consulting in McKinsey? What actually are these differences?

I kept on saying that you don't deal with corporate finance at McKinsey, but the interviewer claimed that you do.

Thanks for the help!

 
Oct 14, 2017 - 7:09am

Your interviewer was correct, at a strategy / management consulting firm, you'll likely use more corporate finance as you're trying help effect the firms stock price / firm value from an operational perspective, i.e. telling what they should do better.

In IBanking, you don't. That's not a bankers job, any corporate finance that a banker crunch's the #'s on is in connection to an m&a or capital markets deal, read: transaction. Bankers efforts are exclusively dedicated to getting their clients access to capital.

Ace all your PE interview questions with the WSO Private Equity Prep Pack: http://www.wallstreetoasis.com/guide/private-equity-interview-prep-questions
 
Oct 14, 2017 - 7:10am

Takeaways from this interview. 1) Do not argue with the interviewers. No matter how much you think you know about the organization, you will not know it more than him. And plus he is the one who is going to hire you and not the other way around. 2) If I were you, I would just admit that he is right and move on to the next question like focusing on asking about his experience at working at the firm and so forth. 3) If you were already at an interview stage, the goal is to build rapport and pass the likability test. People already assume that you are already some-what-technically-competent. When you keep arguing with the interviewer, you fail the test.

"I am the hero of the story. I don't need to be saved."
 
Oct 14, 2017 - 7:11am

I don't think you can just tell him he's right and move on. That will show that you don't know why you prefer IB over consulting. As mentioned above I would focus on the transactional experience - getting clients access to capital markets, vs. the strategy side of consulting. You are more interested in helping a company get access to financing or other capital market solutions that meet their needs, rather than telling them how to run their company or what to do with their capital.

 
Oct 14, 2017 - 7:12am

@ californiaanalyst - could be, however the guy was very unfriendly right from start: didn't introduce himself when he came in the room (he threw his card on the table), never looked in the eyes, drummed his fingers on the table, etc..

@sxh6321 - that's what I was trying to do however he kept on asking why I want to do IBD and he wanted an answer, but he refused all the ones I proposed! So I was stuck and it just felt uncomfortable at some point.

@stirnger bell and boothorbust - thanks for the advice, I believe that the main point which I was missing is:
IBD ---> transaction advisory
management consulting ---> operational advisory

Do you think that the guy's behaviour could also have simply been a voluntary strategy to put me under pressure?

Thanks

 
Oct 14, 2017 - 7:13am

I would agree that he is just giving you a hard time to keep pressing on this same issue like this. Sorry to hear about that. Yes, he is doing this on purpose to see how you would react. Anyway, spend more time polishing your pitch and also note on the difference based on the suggestions that "stirnger bell" and "Boothorbust" have provided. Move on to the next stop.

"I am the hero of the story. I don't need to be saved."
 
Oct 14, 2017 - 7:14am

While the guy was probably giving you a hard time he had a point. To the average banker your answers would have sufficed because they don't care all that much. But really, your answers weren't specific to IBD but rather finance in general.

Some IBD specific things would include: (1) wanting to do transactional based work - possible tie into competitive based nature, (2) interest in providing capital to companies to help them grow, (3) interest in M&A to help companies grow, enter new markets, acquire new technologies, etc., (4) are interested in learning how to value and structure a deal, etc.

For the future, I'd suggest trying to think of specific reasons you wanna do IBD - also, depending on the group / firm you are interviewing for tailor your pitch.

 
Oct 14, 2017 - 7:15am

I recently accepted an IBD analyst offer and this question came up over and over during the interview process. This is how I handled it:

1) Don't be afraid to give the impression that you're interested in consulting. It shows that you are exploring all your options.

2) When asked why, tell them that you're interested in corporate strategy, business analysis and gaining exposure to a range of industries. Have evidence to back this up.

3) When asked why you prefer IB to MC, tell them that while you're impressed by the exposure and personal development that MC will afford you, you believe that IB will give you:
1. a skill-set that is more grounded in reality (MC can be very fluffy and are typically very flippant about M&A - which bankers hate)
2. more direct impact on shareholder value (strategies that look good on paper don't necessarily translate to added value for shareholders - bankers love pushing back against overzealous consultants)

Good luck!

 
Oct 14, 2017 - 7:16am

I admire your restraint frank90. If it were me, after the 5th consecutive time he said "You can do that at McKinsey", I would have blurted out "Oh yeah, cocksucker? Can I fuck your mom at McKinsey!?

But seriously though, in future, you should highlight the operational vs transactional aspect a bit more.

Calling Ron Paul an isolationist is like calling your neighbor a hermit because he doesn't come over to your property and break your windows.
 
Oct 14, 2017 - 7:18am

This should clear up this question definitively (at least from the banking end) and efficaciously. The dude with the handle Marcus_Halberstram posted this on one of his recruiting threads a while back:

"So what is an investment bank? "Its a financial institution that essentially creates markets by connecting buyers and sellers, and risk and capital. At a very high level, there is a sales and trading business and an investment banking business. And from what I understand, the investment banking division is structured into products (e.g. M&A, Leveraged Finance, ECM, DCM) and industries (e.g natural resources, consumer products, financial institutions)." Thats an A answer, IMO. "

Done.

Ace all your PE interview questions with the WSO Private Equity Prep Pack: http://www.wallstreetoasis.com/guide/private-equity-interview-prep-questions
 
Oct 14, 2017 - 7:20am

@azimut - thanks looks like great advice. Can you please explain what do you mean exactly by saying that MC can be fluffy and flippant about M&A ie why is the IB's skill-set more grounded in reality? Can you provide an example?

@ke18sb - makes sense cheers

@ stringerbell - thanks much clearer now

 
Oct 14, 2017 - 7:22am

BB IBD vs MBB Advice - 1.5 weeks to decide (Originally Posted: 12/22/2015)

Hello everyone. I've been a longtime WSO lurker but this is my first time posting. I go to a non-HYP Ivy and recently received offers from BBs (think BAML, Citi, CS... all IBD), as well as one of MBB (our OCR is in the spring but I got it through a diversity program).

I'm not really set on either industry and I can see myself being happy at either. Honestly, my main goal is prestige, HSW MBA admissions, and exit opps in general.

All IBD offers are generalist and in New York and for MBB I can choose between New York and Boston. Just wanted to hear your thoughts on this since I have until December 31st.

 
Oct 14, 2017 - 7:23am

Well since you only care about prestige, exit opps, and HSW admissions you should take the MBB offer. Great starting point for people with no specific career preference, great industry exposure, a feeder into the M7, a prestige stamp, and quality exit opps.

 
Oct 14, 2017 - 7:28am

Take the MBB offer. If you kill it you'll have some good to great PE options available if you seek them out. Also, and this is just my opinion, but from what I've seen from my friends currently working at PE funds (both large and small) is a desire to have been better prepared to speak on the operational side of things. Sure their models are airtight and they can dig deep into financials, but the minutiae of actually running companies effectively/efficiently-required for conversations both with portfolio companies and fund owners-had its own learning curve. The way the environment is now, companies are expected to generate profits running as lean as possible and you'll have the experience of having worked on projects that deal specifically with these issues.

All things being equal it's better to come from a top group at a BB of course, but I think MBB is strong enough to offset and diversifies you in a way for PE that the specialization in banking might not. And since you don't want to do Finance long term this probably keeps your options a bit more open. But YMMV

FWIW, I'm in Corp Strat at a F50 and one of our senior guys (Ex-MBB)-he actually ran our in-house modeling class when I got here- just handed in his notice and will be returning to a PE fund. That's the type of flexibility I imagine you'd find most attractive.

 
Oct 14, 2017 - 7:29am

Consulting - Deciding between consulting and banking (Originally Posted: 12/02/2006)

Hey guys,

I'm sure there's some people like me who are trying to decide between consulting and banking for next year, and I'm wondering if anyone knows what the salary progression is for an undergrad analyst after first year in consulting. I've been offered 60 + 10 with bonus determined by performance, and I've read that bonuses are anywhere from 5-30K for first years (although I haven't talked to anyone at this particular firm about bonuses). What is the salary and bonus picture like in year 2 and 3, though?

Also, if anyone is interested in discussing the choice between consulting and banking, I'm open to it...I am struggling right now although I haven't been to sell day yet for consulting...

Thanks,
Luke

 
Oct 14, 2017 - 7:31am

Which one is better: banking or consulting? (Originally Posted: 11/13/2016)

Recently, I read an article that compared banking and consulting as careers. While banking was mentioned as having higher pay, consulting was mentioned as having more travel, more prospects for promotion, and more overall security.

What do you think? What would you prefer as a career and why?

 
Oct 14, 2017 - 7:36am

I think it's all about your interest. Choose wisely whatever you like, choosing your career only for huge money or traveling across the world, both have their own importance.

 
Oct 14, 2017 - 7:37am

Hello scorpio20, I hope you are doing well.
Well I am a professional consumer consultant and very happy with my job. I think consulting is a great career option. It helps you to build more links with different people. I am satisfied with my field and my career had grown really well in past few years. But at the end its totally your choice. Thanks and regards.

 
Oct 14, 2017 - 7:40am

Career choice after Master's: consulting or banking (Originally Posted: 12/14/2017)

Hi everyone

BG: I am a recent college undergrad from a west coast non-target. Recently I have been doing an ER internship at a MM bank (off-cycle, long-term, have potential become a FT after a few months, either in the bank's IBD or stay in ER).

I am going to grad school (Master program, non-MBA) next year, and I recently got an offer from a good MSF/MSM program (think UVA/Vandy), and it seems that this school is a target for consulting firms. They also have good representation on the street.

The question is, I am not sure if I want to do ib or consulting after my Master's degree.

Here are my concerns:

  1. I don't really like the banking hours and unprotected weekends. I value personal time. Even as an intern in ER I can feel it. Consulting hours are slightly better and most of the time you have protected weekends right?

  2. Travel. I like the prospect that I might be able to see different cities and meet people in consulting. Yes to take flights constantly is not pleasant, but it's better than sitting in an office for 80 hours a week, at least to me

  3. Are there a lot consulting firms that do financial advisory or "strategy" consulting? It seems that there are a lot more fairly good banks than consulting firms, in terms of the absolute number of companies. Compensation in consulting is lower, but this is fine to me.

How can I know which path I want to go? Thanks a lot.

PS: I'm an international student who wants to work in the US after graduation

 
Oct 14, 2017 - 7:41am

iridescent007, hey, look at the bright side, at least you didn't get a ton of monkey shit thrown at you...here is my best guess on threads that might be helpful:

  • Complementing a Math PhD: Master's or MBA? appreciated. MBA hedge fund consulting I-banking quants ... I am looking for a career switch. I hold offers for the following three programs: MBA from INSEAD MSc ... I am thinking of jobs in finance but I do not exclude consulting if I can somehow leverage my PhD as ...
  • No MBA, state school Master's... can I still dream? context: I do not have an MBA. My Master';s Degree from 2006 is from a "regular" US state ... because I just got a call for an interview for a full consultant position at BCG. Let's put this in ... is also located) after graduation, I have been working in communications at a financial services firm ...
  • Career Advice for Non-Trad w/ Master's in Accounting? I am about to begin my last year of my Master';s in Accounting program, and I currently work ... balance, but also job stability. Here are my career options, and I need help deciding what to do: A) Stay ... I don't know how I'd get my 1 year experience after passing the exams. Oh, and ZERO benefits ...
  • Master's in econ, 3 years commercial banking, looking for Boutique/MM analyst or ER...PLEASE HELP!! Hello everyone, quick profile: Master';s in econ from University of Rome, Italy 29 years old ... manager) CFA level 2 CHP level 2 did investment banking institute modeling course decided to make career ... 1 internship experience at hedge fund research company 3 years commercial banking (personal banker, asst. ...
  • Need help choosing a school-- Master's of Management-- Fuqua vs. Kellogg I decided to apply to master';s of management programs. I am interested in going into management ... econ classes), and after a gap year spent living abroad (thought I wanted to go to law school), ... consulting and am beginning to prepare for interviews now. I was awarded a scholarship at both Kellogg and ...
  • 2013 CMC Master's Placement Thought I'd fill WSO in on some of the 2013 CMC Master';s placement: Bank of America ... Merrill Lynch- Investment Banking Analyst, New York, NY Cowen & Co.- Investment Banking Analyst, San ... Growth- Analyst, San Francisco, CA Lazard Freres & Co.- Investment Banking Analyst, Los Angeles, CA ...
  • Biology Major (Non-Target) with Ivy League Master's degree (Health Econ)-- how to enter IB? of medical school after undergrad to study at an Ivy League (think HYP) in health policy and health ... econ. I have a lot of experience in student governance, and research-related consulting, but nothing in ... banking. Any tips for where/ particular firms to aim for to break into banking? Need a summer internship ...
  • More suggestions...

If we're lucky, maybe these professional users will respond: bbsgbbsg Absolute zero mattwilly8989

If those topics were completely useless, don't blame me, blame my programmers...

 
Oct 14, 2017 - 7:45am

In the interests of full disclosure, I'm still in school, but consulting is seen by companies as a luxury expenditure, and I've heard of several that are cutting expenses by ditching consultants. I'd expect revenues to be down at consulting firms, and while they don't have the exposure to bad assets banks do there is only so long they will bother keeping personnel they don't need, although they are generally smaller so could probably choose to forgo layoffs in favor of attrition if they chose to

 
Oct 14, 2017 - 7:50am

It depends on the type of consulting (strategy, technology, boutique, etc), the geography and the industry focus.

I work as an economic and strategy analyst for a global strat & ops consultancy that laid of 15% in February after 5-10% "voluntary" reductions in December. As we do more advisory vs. project-based work, most of our contracts operate on an annual basis. We were thus more susceptible to attrition in the near-term than the MBB set, who do longer-term project work.

Our primary clientele in the Fortune 500 and Global 1000 (80% of revs) is shrinking while our middle-market business (20%) is growing. Europe fairing much better than U.S. business.

MBB has lagged us a bit but I expect their business to deteriorate; recruiting is way down and I know there is pressure to tighten up the far-flung network of offices. I expect this to accelerate as contracts expire or clients go out of business.

It's a relative boom time at BAH, who consults the government in long-term contracts that require (by law) more butts in seat than the work requires. Stay away from Booz & Co., which thinks they are chic but was booted from the partnership because they were bleeding cash.

IT is fairing the worst.

 
Oct 14, 2017 - 7:52am

thanks for the insight guys. i am actually trying to decide between an NYC office of a BB bank in trouble (think UBS, Citi) and an office in Eastern Europe of a MBB. I think I want to do consulting down the line, but I want to stay in the US for that, and I am afraid that the MBB abroad will not be well viewed (I am a foreigner from the region, so recruiters might assume that I got it through connections). Any advice? And perhaps any stories of how people switched consulting offices from abroad to the US?

 
Oct 14, 2017 - 7:53am

I work in economic consulting, at one of the major shops, so I can only speak towards that world. I think that economic consulting is more insulated than many other areas of consulting, since companies can't put off litigation forever and these firms will always need people to do research and crunch numbers. That said my place still had some layoffs (which were basically confined to one practice area; none of the people were juniors) and I know of at least one other major economic consulting firm that has gone through similar troubles.

 
Oct 14, 2017 - 7:54am

ibanking vs. consulting for future doctor (Originally Posted: 01/20/2007)

Hey Guys,

I'm a senior at HYP and am seriously considering going to med school / getting an MD/MBA in the future. Should I bank or consult?

Would your opinion change if I were to say I'm choosing between UBS and LEK? What's the reputation like for these two?

I have to decide in a week...Thanks!

 
Oct 14, 2017 - 7:55am

LEK is a legit shop. I'd take that over UBS, more intellectually challenging and fun..you are going to be working your ass off in med school, you might as well enjoy your life now.

As far as overall prestige, LEK > UBS imo.

 
Oct 14, 2017 - 7:57am

You will get very little that will apply to a career in medicine from banking, except for the lack of sleep. Go to LEK.

 
Oct 14, 2017 - 7:59am

Given the two options i would probably go to med school and forget about the MBA. Doctors are doctors, they arent bankers.

Just make sure you do a surgical specialty and then set up your own shop.

 
Oct 14, 2017 - 8:00am

I still don't get how consulting or banking follows from a serious interst in medicine

If you want to be a doctor then go to med school and be a doctor.

MBA primarily focuses on corporate management, not practice management. The MD/MBA would be an asset for you if you were planning on going into senior management at a company like Stryker, but that's about it.

just my opinion though

 
Oct 14, 2017 - 8:02am

hey, sorry about the confusion

I'm seriously considering med school and then later going into pharma management, biotech, or biotech vc...I think. Public health is also a consideration.

I was just thinking banking might be beneficial if I want to get a better understanding of how companies in healthcare are run. That's why I was seriously considering UBS Healthcare because apparently it's very well-reputed. But then again, LEK is also very reputed in biotech.

I'm still not completely sure what I want to do, but I do know that I'm probably going to med school.

--Thanks for the help guys!

 
Oct 14, 2017 - 8:03am

Plenty of future doctors do banking or consulting, just as plenty of MDs go to business school after med school. Many hospital CEOs have a background in finance and/or an MBA, as well as MDs who go into international health development. I think it's a great idea to do a banking or consulting stint prior to med school, as most doctors are completely clueless about running a business.

 
Oct 14, 2017 - 8:05am

Getting an MBA: Consulting vs IBD (Originally Posted: 02/12/2011)

How does the probability of getting into a top tier grad school differ if I work at a bottom level bulge brackett doing investment banking out of college versus working as a consultant at a top tier management consulting firm?

 
Oct 14, 2017 - 8:07am

Do a search, but basically yes, MC will give you a much broader experience and if you get into a top-3 management consulting firm it will place you well for business school. However, if your goal is private equity, investment banking will do a better job placing you into a pre-MBA PE role. The catch is that if you go the IB/PE route, you will find yourself having a tougher time differentiating yourself from all the other finance guys (though there is no shortage of consultants getting MBAs either.

 
Oct 14, 2017 - 8:08am

Management Consulting is probably the best possible career in terms of admissions to B-school. You are pretty much guaranteed much more personal recommendation letters and a very versatile work experience, which definitely helps considering that many Bschools have become unfriendly to finance addicts (see Harvard and Stanford).

 
Oct 14, 2017 - 8:14am

IB at unknown firm vs. strategy consulting at a big 4? (Originally Posted: 12/27/2017)

I'm a rising junior at a target looking to go into IB/management consulting (in the US/UK). Have a ~3.4 GPA, and I worked in strategy consulting at a big 4 previously. I can either go back (this isn't in the US/UK - but the work was amazing) or work at a small IB firm in New York. I'd love to hear thoughts on this

 
Oct 14, 2017 - 8:16am

If you want to do consulting take the strategy consulting offer, if you want to do IB take the small IB firm's offer and network to lateral. All depends on what you actually want to do after graduation...

 
Oct 14, 2017 - 8:19am

Consulting pay vs. IBD pay (Originally Posted: 01/24/2007)

My sister is looking to get into consulting (despite my objections). Can someone post ballpark salary figures for entry level analysts (is that what they're called?) at a large consulting shop (think McK, Bain, BCG)? How much of a discount is it compared to those of us in IBD?

 
Oct 14, 2017 - 8:20am

Around 60-70 for consultants.

The gap gets a lot bigger as you go further up. At the VP level in banking you are often making far more than partners in consulting, obviously not always the case tho.

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