Salary pay cut when changing careers?

I wanted some advice on a career change I am working towards - I am an engineer and want to move into either Asset Management or investment banking, also open to management consulting. I've completed both a masters in electrical engineering and recently completed a masters in Finance from Harvard extension school . My question is - for all of you who might have made similar career changes - did you take a pay cut when making the change? From all I've looked into at glassdoor it looks like I might have to do that if I'm starting off as an analyst. (I was making 6 figures as an engineer).

Comments (35)

Feb 9, 2017

Could someone help me with this question? What are good careers in the financial services that would best leverage an engineers skill that are not back office? I discussed with an MD at AIG recently and he said that portfolio analytics at fixed income places would be good. Problem is AIG is not hiring and he also said I should definitely expect a pay cut. Does anyone have experiences to share here?

Feb 9, 2017

The reality is you don't have any finance experience so why should they pay you for your otherwise irrelevant credentials? They can find a fresh graduate with a econ/finance/engineering degree and pay them a fraction of what you're demanding. It's the nature of trying to switch careers this late in the game.

Feb 9, 2017

Thanks - I'm reconciling myself to the fact that most likely I will have to take a pay cut. If you dont mind me asking (since I noticed you work in fixed income AM), what are some of the major FI AM firms? I would think maybe engineering is valued at a fixed income analyst position because of the quant and analytical skills required.

Feb 9, 2017

Have you tried IB MBA Associate roles? Not sure why you would want to start as an Analyst when you have a Masters.

Feb 9, 2017

Yeah I've applied to associate roles too - that is online with no luck yet, but then again online applications can be demoralizing sometimes, you have no idea where they end up! Networking alot through linkedin - messaged ALOT of people - have not made the connection yet. Just trying to figure out how I can best leverage my engineering skills and finance education to make this move. I'm really into both the macroeconomics side of global currency and stock markets as well as the financials of individual companies (as I've invest in stocks on the side) so I'm open to financial consulting too. Are AM firms 'easier' to break into compared to IB, you think?

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Feb 9, 2017

AM firms are easier IMO, but it is a shrinking field with the DOL regulation and more roles require programming and coding skills. Best of luck on your search.

Feb 9, 2017

If it's what you want to do, I say go for it. I was working in IT (Hate it) and wanted to switch into finance. I took a paycut of more than 30% to be in the industry so I would be able to work my way in. In the end it will be worth it. Money doesn't buy happiness!

Feb 9, 2017

Make the switch to what you'll enjoy.

Feb 9, 2017

Negatives to switching:
Immediate 25% cut in base
Have to move

Positives to switching:
Much lower COL
In a more prestige role
In a position that you'd enjoy more
Can meet (and in future exceed) current earnings potential

I say go for it

Feb 9, 2017

chicago isn't a high col city

Feb 9, 2017
bottera:

chicago isn't a high col city

Fuck yeah it is. Maybe not compared to NY or SF, but it's pretty high. I lived there for ~7 years.

To the original poster, make the switch if you can afford it financially. I recently took a 20% cut to move into a FI analyst on the buyside, making the transition from a finance role at a F500 company. I actually enjoy going to work now, and am much more motivated. Best of luck.

Feb 9, 2017

I transitioned from an FT role into an internship because the new area interests me exponentially more. Not regretting it thus far.

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Feb 9, 2017

I'll say it a hundred times: it doesn't matter worth a shit what you're making at your level. Don't hesitate. Especially if your daily work responsibilities would be more interesting and make you happier.

Feb 9, 2017

I can't understand how people keep focusing on top level numbers, the only number you need to look at is your net income...you are taking a pay cut but your cost of life is also expected to be lower...what's the big deal here ? Just take this job if you like it...

Feb 9, 2017

Do it. Switching from BO to FO gets exponentially difficult every year you get older.

Feb 9, 2017

Listen to all the advice above.

I'll act like the Ghost of Christmas Future, here to warn you - I stayed in accounting way, way, way too long. I'm trying to switch and it's not easy. Go do what you think you'll enjoy.

Feb 9, 2017

I think you gotta do it. Unless you're supporting a family, you're probably going to net out to a 10% loss of relative income but you're earning potential skyrockets and you've got a seat at the table. And that's what matters, a seat at the table.

Feb 9, 2017

Are you seriously asking this question?

Why would you not take the new job?
Make a list on a sheet of paper of pros and cons of NOT taking the job. The only pro would be that you don't take a cut in pay. Everything else will be a con. And don't you forget to write this con first: the possibility of never getting an opportunity to move to FO.

Do you have another FO offer which pays high? If not, I totally fail to understand why you asked the question. I mean, really?

Feb 9, 2017

Factor in happiness level, career development and career potential and then make your decision - don't base everything off of salary.

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Feb 9, 2017
Nefarious-:

Factor in happiness level, career development and career potential and then make your decision - don't base everything off of salary.

This, 100%.

EDIT: Also, terrific signature quote from a terrific movie

Feb 9, 2017

It's one of the best movies - that line speaks so much to life in general.

Feb 9, 2017

Thanks guys. I agree 100% as well. I guess I am having a moment of pride now that the time has finally come.

Feb 9, 2017

how much lower are we talking about? 10%?

Feb 9, 2017

4% actually. I was expecting an increase during negotiation and they came back firm on the original number so in my mind I felt like it was much more.

Feb 9, 2017

A career is like poker, all the money is at the final table.

If you can make more down the road, you'll never even remember the minor hit at the beginning.

Feb 9, 2017
consultant 13:

Thanks guys. I agree 100% as well. I guess I am having a moment of pride now that the time has finally come.

Have pride in the fact that you've been trying to break into a great (and ultimately lucrative) industry and pulled it off, man. Good shit

Feb 9, 2017

It's all about the money, screw happiness. However, this means future money not just present. Go with whatever has the best career outlook.

Feb 9, 2017
CRE:
consultant 13:

Thanks guys. I agree 100% as well. I guess I am having a moment of pride now that the time has finally come.

Have pride in the fact that you've been trying to break into a great (and ultimately lucrative) industry and pulled it off, man. Good shit

Thanks for the encouragement! That is a good way to look at it.

Feb 9, 2017

Congrats on the accomplishment! Don't interpret the pay decrease as an insult. Pat yourself on the back and go buy yourself a whiskeycigarsteak dinner.

Feb 9, 2017
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Feb 9, 2017