Why do MBAs seem to favor consulting over banking nowadays?

I looked at some employment reports of top 15 bschools during 2012-2017 and this seems to be the trend.

For example, Columbia, a finance powerhouse, had 55 graduates heading over to McKinsey in 2017, while that figure for Goldman Sachs was only 8! The top 5 recruiters in 2017 were McKinsey, BCG, Bain, Amazon, and Deloitte. In fact, across top 15 bschools, the percentage of MBAs who went to IB in 2017 is only 5-10%; for consulting it is 20-30%.

Now, I understand that:
1. Maybe half or more of those heading to MBB had their MBA sponsored -> they were just coming back
2. BB IBs get most of their Associates from their Analyst class, and only hire MBAs if slots are not filled
3. Ex BB IB analysts go to BSchool in order to jump to the buy side -> hence why the percentage of MBAs joining PE/AM/HF across most schools is still high
4. A large portion of MBA students are ex-engineers, ex-journalists etc. who may no finance experience and are not interested in the financial services industry -> management consulting is more "fit" for them
5. Maybe the IB industry is shrinking. Or maybe the management consulting is more hip and cool. Or maybe bankers are seen as evil/greedy post the financial crisis. Or maybe most MBAs want to have a slightly better work life balance after grinding out 2 years in IB. Idk.

Are there any other factors I am missing? As I understand, management consulting used to be the favorite industry for MBAs (hence the case method for many schools), before investment banking became cool in the 80, 90s and 00s (pre 2008).

Comments (104)

 
Sep 7, 2018 - 1:12am

You have covered most of the points-so great job on that! I will just add that maybe since work life balance in Banking in non existent and also add better job security on Consulting. I am also debating between the 2 at a top 20 school next year so eager to know if anyone can add anything here.

 
Sep 7, 2018 - 1:53am

Have you really not considered that consulting is way more interesting? I don't mean to spark a IB vs MC debate in this thread but you cannot deny that there is so much more varied work in consulting and therefore (to me at least) is more attractive as the day-to-day work won't get as boring and repetitive as in IB. I'm sure there is variety in IB and you aren't doing the same thing for months but it's also fair to say it is much less varied than in consulting.

Another key reason is skills. People (at least in Europe - the market I speak from) have more chances to travel, develop soft skills and learn languages. Everyone in my B-School class was at least bilingual with a 3rd language at business proficient level and some 25% of students were trilingual with a 4th language at business proficient level. With those skills, why the fuck would I want to go into IB? They would be wasted until I got to much higher levels and actively met clients whilst in consulting you meet them from the analyst/associate stage. You also travel MUCH more in consulting and these softer/language skills also help when you go to new countries and markets.

A final reason is that consulting now is much more technical and to cater to certain markets you need to have technical skills (as you mentioned) such as a PhD in an engineering or medical subject. In IB (correct me if I'm wrong) you do see some of these people but they are on the same level as finance only people (unless you're in ER) which rightly so doesn't seem fair. Also, whilst IB explores various industries and sectors, the sector knowledge needed isn't as specific as consulting. I've had friends with finance only experience work on M&A project from biotech to O&G. In consulting you won't have generalists working on complex industry specific problems at senior level - you'll need your science PhDs and your Doctors. Perhaps you'll have some Partners too but because they've done projects in that industry for 15 years and can contribute. In general I feel that the STEM + MBA combo is much more valued in MC than IB.

 
Sep 7, 2018 - 2:36am

Also, to add to what you said, I am interested to know how do the 25% IB Associates who stay manage their health? Do they grind it out? What health problems do they suffer? How is it humanly possible to sleep 5-6 hours each day and then start working like a machine the next day? How does the body cope up for those who stay? Also, add to this the all nighters that happen and not to mention Sundays are also working.

 
Sep 7, 2018 - 2:54am

Some grind it out, some have different levels of adenosine receptors (the neurotransmitter that makes you sleepy) and circadian cycles allowing them to be more function with less sleep. 6 hours 6 days a week is fine provided you can recover a bit more on another day (which in most cases is possible). Health problems are the usual suspects; cardiac issues, blood flow issues, fatigue, poor diet, nutrient malabsorption and so forth.

 
Sep 7, 2018 - 12:30pm

@the pharma guy you're so biased that it makes it difficult for me to take you seriously. Moreover, many of your points are wrong but I can't be bothered to explain you why.

It's funny to see so many MC guys that feel the urge to argue that their job is more interesting than IB. If you were satisfied with your job, I bet you wouldn't waste time posting and arguing here.

 
Sep 7, 2018 - 2:08pm

First point: threads like this are started to debate and discuss topics. Saying 'so many of your points are so wrong I can't be bothered to explain why' in most cases is a long way of saying you can't argue against them. If you can, be my guest.

Second point: debating why I personally feel MC is more interesting is a personal opinion. I never stated is as absolute fact. Being in MC I clearly defend it just as in plenty of other threads IB guys debate ways in which they think their job is better than MC. Doesn't mean if you defend your industry you're unsatisfied. One can express their sentiment. The fact you don't understand this is pretty sad. And my dear 'prospective monkey' - you don't seem to be in a job so how can you know the day to day of the job of either industry? I may not know about the day to day of IB (which I stated) but I can speak for MC.

 
Sep 9, 2018 - 3:05pm

Honestly they are similar skillets. Similar hours when you take into account travel. Consultants just love to say how they are better than bankers and vice versa. Banking pays a lot more and that's undeniable.

But consultants can brag on Instagram how they are in Istanbul or something traveling and taking photos..
.. which is what millennials are obsssessed with - travel. Hence why consulting is more sexy to millennials MBAs these days. The traveling Instagram lifestyle

 
Sep 7, 2018 - 3:14pm

There are a lot of things wrong with this post, unfortunately.

1 - it is a very short term mindset. "They would be wasted until I got to much higher levels and actively met clients whilst in consulting you meet them from the analyst/associate stage". Question was about MBAs - so analysts meeting clients is irrelevant for comparison. Sure, consulting associates tend to interact with clients more and can use these language skills, but at senior levels the client interaction is the same. Pretty sure language skills are universally applicable and being able to negotiate a cross-border deal due to language fluency is a huge plus...not a 'waste'.

2- "In IB (correct me if I'm wrong) you do see some of these people but they are on the same level as finance only people (unless you're in ER) which rightly so doesn't seem fair". I've read this sentence 3x and still dont know what you're trying to say. I think you're saying that consulting is more technical than IB, which almost by definition, is wrong.

3- "whilst IB explores various industries and sectors, the sector knowledge needed isn't as specific as consulting". I'm not sure you understand the different roles in banks. almost every bank has industry coverage teams where team members literally dedicate their lives to developing sector-specific knowledge. Maybe you're thinking of product groups, who work along side industry teams to bring depth of product knowledge to various industry teams.

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Sep 7, 2018 - 5:44pm

These are fair points to make and I'll attempt a fair counter.

  1. Fair, no point comparing analysts but even after associate at VP level the level of significant and long-term client interaction. Above VP you get the significant team leading experiences in front of clients but seeing as VP could be considered EM level in MC, by then you would have much more interaction. As for the language aspect I strongly disagree. Not only would they be used by mainly senior staff (above VP) but the level of daily interaction is very very different. I've worked on Pan European projects where on a daily basis I was speaking Italian, French and Spanish. I do not know a single person in banking at associate level that does this. And if personal experiences aren't enough, at a career event I asked this to a senior guy at an EB and he literally said languages at analyst and associate level didn't matter. This was for London - the capital of European finance and languages don't matter even at associate level? Come on. Granted, as I said I write from a European background and perhaps IB in Asia is different but in Europe and the US languages win in MC. Hands down.

  2. I could have made it clearer but what I'm saying in a nutshell is that in IB the biochemist gets hired as easily as the nuclear engineer or financial statistician - they are all hired and seen as 'good with numbers'. In MC if I hire a nuclear engineer I will hire him for his knowledge of nuclear physics and staff him on projects of that industry. The point of 'I don't think it's fair' is that a PhD who worked his ass off to gain an incredible knowledge of his field will be seen as the same as a guy with an MFin who has been there for 2 years when it comes to crunching numbers because they will do the same number crunching.

  3. Here I mean that in MC the specific sector knowledge you have would be much deeper than IB. I'll do another biomed example as it's my field. If you're doing a biotech M&A deal it helps the banker to know about the industry and certain elements of the deal will change but although some assumptions will differ to other industries, a lot of the work will be repeated across the board. Sure, having additional technical knowledge will help but in a similar fashion to point 2, it won't be used as much as in MC. In MC if you work in biotech you don't only need to know the therapy areas (oncology, cardiology etc) and the technical terms (agonist, antagonist etc) but also the specific science such as cell mechanisms and cell pathways or reading clinical data. These skills are constantly used in MC and consulting projects but may only occasionally be used in IB projects. So, like in point 2; if I'm a talented person in a science or difficult subject and I can choose a field where this technical knowledge will be regularly used in minute detail or one in which it could be occasionally used and if so in a more superficial way, why the fuck would I pick the latter?

 
Sep 9, 2018 - 12:21pm

I have been lucky enough to take part in different networking event at both IB and MC firms in London and in regional offices. One McKinsey associate told me she spent 6 month training Insurance Brokers in a small town in Italy, another BCG associate told me he spent 4.5 months inventorying all the pieces in a warehouse 50 km outside London, etc. And yes, they were speaking to clients, i.e.: the insurance brokers, warehouse people - I would define this neither "interesting" nor "client exposure"

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Sep 11, 2018 - 3:53pm

Basil Hayden:

Millennials in general are tipping the scale on the whole work-life balance thing so this is not surprising.

I was reading an article and this is definitely a case. The whole "I'm going to let my boss run every minute of my life" is a trend nowadays whereas before it was "I want to make alot of $$".

Increased regulation probably has also dampened the mood for it. There's definitely more documentation and processing related tasks in the financial services industry which limits the reputation of how enticing the industry is. More and more, it's the tech people/start-ups that are what bankers used to be. Can get away with partying, limited HR rules, generally good money. I think real MC is still relatively limited as a whole, but there is that appeal for travelling then grinding it out on PP and on excel.

 
Sep 7, 2018 - 1:25pm

I don't think BB IB's get most of their Associates from their Analyst class. A minority of IB Analysts stay in banking as most of them go to the buyside, corpdev, startup, FAANG, etc. If you were to survey all the IB Associates at BB's, I think you'd find that the overwhelming majority of them are post-MBA Associates.

I also don't think most ex BB IB analysts go to BSchool in order to jump to the buy side as post-MBA buyside postions are competitive enough among MBA's with PRE-MBA buyside experience. BB IB analysts that go to BSchool go because they're not sure they want to do banking long term and want to "see what else is out there" or they just want a break.

I echo the previous comments about work/life balance, travel, varied work, technical skills, etc. I'd also like to point out that as a path to the C-Suite (outside of Finance), consulting is probably more viable than banking. I rarely see ex-bankers as CEO's of (non-finance related) companies. You can pretty regularly find ex-McKinsey guys in the C-Suite of companies in all manner of industries. This makes sense to me as the skill set you pick up in MC is probably more applicable to the CEO job than the skill set you get in banking. I don't know if this factors into people's decision making when recruiting but it probably should.

 
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  • Managing Director in IB - Ind
Sep 7, 2018 - 2:40pm

Having worked both in MC and IB, I can offer a few opinions:

1 - MBBs single, most impressive achievement, has been getting MBA candidates to believe that they offer better work life balance than IB. This may be true the first 12-18 months after graduation, but then IB begins to have a better work life. A VP at an IB has more control over their schedule and can be home for dinner majority of nights. Managers in consulting are still doing the soul crushing flights / client travel to Tier 3 cities that keep them away from home for the majority of the time. Have a bunch of friends that are 5+ years out of MBA, the consultants who are partner track work more than the IB folks almost without exception. Also - IBs realize the bad press they have been getting and most have taken steps to ensure burnout is less of an issue.

2 - IB has a bad rap for being uninteresting and repetitive. Really? Sure at the analyst level, can be uninteresting - but majority of entry level jobs are repetitive and mundane, need to learn. The fact is that if you are working on an IB engagement - it will almost certainly be one of the CEOs top strategic priorities - because the nature of IB is so impactful and strategic. That is interesting. You know what isnt interesting? Sourcing paper clips for the canadian government, firing/relocating IT folks from Chicago to Columbus, replacing replenishment software for a retailer (all actual consulting engagements I was staffed on). For every insanely interesting consulting engagement, there are 10 projects that really suck - dont believe the hype.

3 - Consultants arguably have better exit opportunities - so maybe this is driving the decision. IBers are essentially relegated to some flavor of finance. Consultants can pivot to anything.

4 - The decision is different out of undergrad. I do think that analysts in consulting face less burnout and generally have a more enjoyable life than IB analysts.

TLDR: Consulting firms have done a great job of getting MBA candidates to wrongly believe they offer better work/life balance and more interesting opportunities as compared to post-MBA IB.

 
Nov 22, 2020 - 11:34am

Before getting loads of MS will caveat this by saying generally I agree with your post, but some possible responses from my MC perspective:

1 - Would agree that at the manager level the hours get very rough for MC, but disagree on Partner level. At that point both IB and MC are traveling a lot, and hours seem pretty similar. The main thing I'd point out is you seem to dismiss the "first 12-18 months" but the reality is most MBA students don't enter IB or MC to stay long term. 18 months could be 75% of a lot of people's tenure. Post-MBAs are also often in their upper 20s with a significant other and possibly kids, so those years have to be considered.

2 - Agree that IB has an incorrect reputation with this. What I think is attractive for MC from an "interesting work" perspective is that what you are actually doing day to day can vary astronomically case to case. That's not to say IB isn't interesting, but it is objectively less diverse over a 2 year period.

3 - Agree, especially at the Post-MBA level. At the undergrad level I think it's pretty even.

4 - Hours are definitely better for undergrad MC hires, albeit pay can be a lot lower if you aren't MBB (and even then pretty substantial gap).

 
Sep 7, 2018 - 6:23pm

Having been on both sides, there are lot of misconceptions that hold people back from banking. As someone else mentioned, after first couple of years banking hours get substantially better. The pay gap also widens. I don't think most MBA students are aware of that or don't plan beyond 2 years. Banking travel also picks up lot more once you've been there 2-3 years - but more same day trips around the country vs getting banished to Pittsburgh weekly trips for next 5 months.

The client exposure at banking is also much higher than you'd think. Buying or selling a company or taking it public? The client is basically CEO/CFO/Head of Corp Dev and in a live deal you do interact with them literally every day - in person and on phone / text and not just limited to MDs.

I would also argue the deal process gives people lot more insight to companies or businesses than doing another market study that surveys N = 42 experts. Overall you also work with lot more clients / projects - basically working on 3-4 deals and covering another 30-40 accounts at same time vs one project at a time in consulting.

Anyone who has gone through recruiting can also tell you that at least in US, banking recruiting is very subjective around client preparedness (basically more about fit) and a decent portion of my classmates who went to consulting probably wouldn't pass that filter. Consulting is more open to smart guys who might be little rough around the edges. Sure knowing 4 languages might be fancy, but that doesn't really matter.

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Sep 9, 2018 - 4:43am

In Europe, the smart and quirky guys end up in IB, the people with good fit go to consulting. At least that was my experience from recruiting at my school and various interviews. Also, the languages not being useful is more US based I think. In Europe it is key not only to communicate but also to understand the culture and do business well e.g in Spain, Italy and Portugal business is done slowly due to bureaucracy issues and it isn't uncommon to 'pay' or use political power to speed things up, in Northern Europe people are blunt and don't like to be bullshat or beat around the bush and in South American it is very hard to do business unless you have a man on the ground as not many will trust you at first.

 
Sep 9, 2018 - 5:59am

Aren't MBB guys smart as well? At least in my country, most MB (Bain has not been established yet) staff are HYPSM/Oxbridge/top US/UK university graduates.

I graduated from a top EU university with various Big 4 internships and MB didn't even looked at my resume. Granted, IBs rejected me left and right, but that's not the point. Had to settle for Big 4 TAS in the end.

 
Sep 9, 2018 - 7:42am

abacab:

Having been on both sides, there are lot of misconceptions that hold people back from banking. As someone else mentioned, after first couple of years banking hours get substantially better. The pay gap also widens. I don't think most MBA students are aware of that or don't plan beyond 2 years. Banking travel also picks up lot more once you've been there 2-3 years - but more same day trips around the country vs getting banished to Pittsburgh weekly trips for next 5 months.

The client exposure at banking is also much higher than you'd think. Buying or selling a company or taking it public? The client is basically CEO/CFO/Head of Corp Dev and in a live deal you do interact with them literally every day - in person and on phone / text and not just limited to MDs.

I would also argue the deal process gives people lot more insight to companies or businesses than doing another market study that surveys N = 42 experts. Overall you also work with lot more clients / projects - basically working on 3-4 deals and covering another 30-40 accounts at same time vs one project at a time in consulting.

Anyone who has gone through recruiting can also tell you that at least in US, banking recruiting is very subjective around client preparedness (basically more about fit) and a decent portion of my classmates who went to consulting probably wouldn't pass that filter. Consulting is more open to smart guys who might be little rough around the edges. Sure knowing 4 languages might be fancy, but that doesn't really matter.

This needs to be highlighted and reiterated until the MC crazies read it.

  1. What part of waking up at 4 AM on a Monday morning to catch a flight to Iowa sounds appealing? Once I land in Des Moines or Cedar Rapids, I get to talk about software implementation or reducing head count at factories in the Midwest. Yikes.

  2. I enjoy valuation and transaction-based work. Simple.

 
Sep 9, 2018 - 2:08pm

Means not being a weirdo for lack of better words. The pharma guy here is a good example. You've seen it before - the guy at work, class or meeting who would keep arguing why he is right and disregard everything and try to prove he is smarter. Imagine putting that in front of a client. That's when even low level client people say "oh you are 2 years out of undergrad / MBA and telling me how to run my department" or the top management never invites you back. Sometimes you have to take the feedback from other side or present / refine your view right way.

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Sep 9, 2018 - 7:43am

HFT:

Consulting has more balanced hours and also it's relatively recession proof compared with IB so better job security.

MBB? Sure.

But there is quite a bit of need for restructuring, divestitures, and potential acquisitions in economic downturns, no?

 
Sep 9, 2018 - 11:06am

I was told by a Director at a BB that it's just the cycle of the market. In a similar discussion, he related it to how HF recruitment is down in this market but assumes it will continue its financial reign in the future.

 
Sep 9, 2018 - 11:29pm

Former consultant, now at MBA, here's my 2 cents. Any consultant who is bragging about interesting work and travel is bullshitting you. As has been already pointed out, sexy engagements are few and far between. Even when you do go to Europe (had about half my engagements in Europe, half in NA), you are usually in some backwater town. Consulting gets paid on hours, and the most hours are in boring ass implementation projects. Everyone on here who says otherwise is a dumbass student who thinks House of Lies is real life.

There is one exception: the consultants who DO get short term sexy work are, wait for it, those in the finance focused practices!

Anyway, you are reading the employment stats in the wrong way. Yes MBB as 3 companies took more, but literally 3 dozen banks recruiting for IB alone come to campus. Not to mention Asset managers, funds, etc. Most will only take 2 to 3 interns. So while yes, Banking recruiting is down, I would say 25% or so of the class still actively goes for banking.

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Sep 10, 2018 - 12:54am

Most of your points are valid, but I'd like to point out that the total number of MBAs who went to investment banking (I'm not addressing the the finance industry as a whole in this thread, because obviously many would like to go the buy side) was still low compared to consulting.

Stats (2017) - full-time hires
Wharton
Consulting: 32.2%
Investment Banking: 11.2%

Booth
Consulting: 32.9%
Investment Banking: 12.6%

Columbia
Consulting: 33.1%
Investment Banking: 13.7%

Even when a dozen banks come down for recruitment, the number of students heading to consulting is 2.5-3x to that heading to banks.

Now understand that they might lump a lot of weird jobs with "consulting", but even so, as per Columbia's employment report 2017, 29.8% of MBAs went to "strategic/management consulting" and only 3.3% went to "other" types of consulting.

 
Sep 11, 2018 - 12:50am

Yea I don't dispute your point. Anecdotally, the banking focused students know they want to do banking, consulting people mostly are kind of figuring out what they want to do. Most are recruiting for tech and sometimes companies like Nike as well. Consulting also comes to campus first, so many people use recruiting to practice case interviews. As a result, there are just more people recruiting for consulting, even if certain students weren't set on consulting, and because of this MBB gets first dibs and can lure their chosen candidates away.

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Sep 10, 2018 - 3:54pm

I also notice a lot of people from consulting end up in business school. Seems like 20-25% on average at T15 schools. Perhaps it provides a wider breadth of exposure to business?

 
Sep 10, 2018 - 4:39pm

A ton of those students are sponsored.

I think overall the Consulting Industry has just experienced stellar growth during a period where IB has sort of gone the other way structurally, if not retracted outright, and it shows in the recruiting stats. Not sure to what extent this is demand/popularity driven. These schools want the best employment figures and will happily feed entire classes to the hungriest industries. Suddenly Amazon is pulling in boatloads of people?

IB also just has more of a poor reputation in general between the two-and I don't even mean the work-life balance. I'm referring to it being considered downright abusive/toxic in many circles.

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Sep 10, 2018 - 3:57pm

Because so so so many people come to business school without the slightest clue about what they want to do when they get out. Many people came to the conclusion that their current career isn't on the path they want it to be, and taking the GMAT/applying to business school is a pretty great way to hit the reset button at 27.

Most people who end up with IB Associate gigs came to get their MBA with the intention of going into banking. Many of the consultant types get to business school and realize "Well, I want to get paid, work on high stakes projects, and I want a job with prestige. Banking and consulting check all those boxes, and I think I'll take the deal where I'm making ~$165K on 65 hours a week rather than ~$200K on 85 hours a week."

 
Sep 10, 2018 - 4:53pm

Easy answers here:

  1. Work life balance: at least your weekends are protected in consulting (moreso than in banking)

  2. More diverse set of exit options in consulting

  3. Consulting is more accessible to more people. Regardless of your interest (marketing, finance, big data) you can probably find a niche for yourself in consulting.Finance generally only attracts people who are mostly just interested in finance.

 
Sep 10, 2018 - 6:10pm

Consulting always has been and will continue to be a major recruiter at top MBA programs. Even during recessions, MBB hires a lot of people, due to high turnover after 2-3 years and companies requiring expert advice. MBB has an extensive network of contacts across industries, and they are selling companies on the intelligence and pedigree of their consultants.

Consulting is a great combination of good money and awesome exit opportunities due to the transferable skillset you develop. You also gain exposure to senior executives of your clients, so you readily develop an "executive presence."

I do think however that post-MBA banking at top boutiques is one of the most underrated jobs out there.

 
Sep 10, 2018 - 10:06pm

Most people who goes to MBA are career changers (i.e. NGO/Industry > More Lucrative Roles). Management Consulting is accept a wider range of people at post MBA level (i.e. associate, VP). Investment Banking (esp M&A) or Private Equity is traditionally looking at people who already had previous experience, thus limiting the pool of people applying and getting accepted.

 
Sep 10, 2018 - 10:35pm

LOL I don't know, could it be that GS is a much harder place to get hired than McKinsey? Every top MBA program sends dozens to top 3 consulting every year without fail. Good years, bad years, doesn't matter. Schools host consulting recruiters full-time with their own offices in the school. They feel like employees of the school. It's almost like hiring MBA's is the main business function of these big consulting firms.

Nothing against it, I know plenty of great people working at those places. But comparing the numbers side by side is definitely apples-to-oranges when one place is known to hire the best and the other place is known to hire everyone.

 
Sep 11, 2018 - 12:25pm

When I was in school, it seemed like most prospective consultants knew going into the job that they would not be there very long. It was a way to kick the can down the road for another couple of years while they networked and figured out what they wanted to do. In the meantime, especially if you are single, it's a pretty decent deal; you travel, get solid vacation and benefits, and make good money.

Banking is and will always be a grind. Long hours, crappy weekends, minimal vacations and an ever shrinking pay gap between your comp and that of your buddy who works 45 hours a week in software sales at Microsoft.

"Anything less than the best is a felony"
 
Sep 11, 2018 - 8:36pm

Fascinating discussion. My observation as someone who seen it first hand in B-school:

-The most impressive people went to MBB (and PE/AM)
-The douchebags and Type A guys who knew they wanted to be in finance went to BB's
-The weirdos went to Deloitte Consulting
-The somewhat smart driven people who wanted optionality , prestige, and pay went for strategy consulting (T2/Big4)

Now that im 3-4 years out, I've seen the following play out:
- half the people from Banking and Consulting quit within 2 years. The exit opps were pretty similar between MBB/BB's and Big4, (Corp dev, Corp Fin, FAAG product managers, Corp Strat). a small handful of BB/EB guys were able to make it to the buy-side.

  • The bankers who stayed are still pretty miserable from lack of sleep and abuse, but are in it for the fat pay check. Whether it's the lifestyle or pride, they dont want to take a big pay cut and move to industry. Some are waiting to see if VP is the promised land. ($400K & leave by 8pm)

  • I dont talk to many of the consultants but the ones at MBB seem to be somewhat happy and making decent pay ($200+)

Anecdotally a number of people who didnt do banking or consulting ended up getting hired at consulting firms as experienced hires. The people who wanted to lateral to banking were unable to as experienced Associate spots at banks are very far and few in between and primarily go to Associate laterals.

I think this all goes to show that the banking industry is on a downswing. Banks are cutting expenses left and right, and still have a shitty toxic culture they cant shake off. They are losing out the best and brightest to consulting and on top of that, they just dont have the budgets for headcount that consulting firms now have.

 
Sep 12, 2018 - 8:33am

I'll first caveat by saying I can only reflect on what I've seen around me, since I've never had IB experience, don't have an MBA and am too junior at MBB to write a qualified 1st person reflection on the senior levels. But from what I've seen, my Managers and Senior Managers are still working ~70h per week at MBB, and the work-life gets worse, not better, as you go up the rungs. Partners have 3-5 projects they are cycling between simultaneously and travel quite often during the week.

However, MBAs around me have told me they picked consulting over banking for a couple reasons that go beyond work-life balance: 1. culture and 2. more diverse exit opportunities than finance, and that seems to tip the scales for them. On the first point - whether true or not, it seems there is a not-insignificant portion of MBAs who feel that banking has a toxic, rite of passage-esque culture and that seemed to steer them away.

 
Sep 12, 2018 - 10:38am

The big picture is pretty similar.

In either IB or consulting, juniors aren't doing great (either making less $ in consulting for decent hours, or more $ in IB for rough hours . . . not a big difference for most people).

Also, in either IB or consulting, the partner/MD types at the top are doing a lot better. There are differences, but probably not important to most people. . senior bankers probably make more, but may have tougher hours or more risk of getting cut, or maybe longer odds of making it to the top. So, six of one and a half dozen of the other.

Long story short, these jobs aren't great at the bottom and can be pretty great at the top. So if you sense any difference in your ability to make it to the top (probably driven by your interest in the work), that should overwhelm any other considerations.

If you're still torn on that front, I'd say do IB. Mid-level pay is quite a bit higher ($400-600 for banking VPs) and exit options are similar but it seems banking Associates have an outside shot at PE/HF that is less the case for consulting.

 
Sep 16, 2018 - 5:41pm

Unless you are extremely passionate about a specific field (e.g., long-short equity investing, PM at a big tech firm, etc.) and have the right resume for it, MBB consulting and EB banking are the best post-MBA opportunities. They provide the ideal mix of high compensation, prestige, exposure to senior executives, great exit opps, and transferable business skillsets.

 
Nov 20, 2020 - 2:55am

you have to realize one thing: when you graduate B-School you are average 29ish, not 22-23 like undergrad. Your life is totally different, you might have a long term gf or potential wife + kids at this moment in time and obviously banking at this stage is not worth it to a lot of individuals. 

Also a LOT of people do banking just to go to PE and HF industries so they want to get in and get out QUICK which might explain the low numbers.

life is short, and people don't want to have that lifestyle at that stage of their lives, their are plenty of industries/jobs you can go from B-school that will pay equally or MORE than IB so that's also another reason

 

 
Nov 22, 2020 - 5:13am

But isn't consulting just as much damaging to your relationships?

Look, you work 70 hours, or maybe 80 hours as an Associate when you're on a live deal. But you still get to go home every single day and sleep in the same bed as your spouse.

If you're a consultant, you're gone for 4 weekdays, and can only see your SO Friday evening + weekends. Granted, you don't have to work as much on weekends vs. bankers.

Both are just as bad.

 
  • Analyst 1 in IB-M&A
Nov 20, 2020 - 9:10am

I've done IB and consulting and will say yes consulting is a lot of work but the intensity/stress is NOTHING like IB. That makes it much more bearable. Also, people in IB are generally assholes while consultants on average are nicer (with some exceptions). This is just known by everyone. The banks don't hide their cultures and have no issues filling roles with competent people. Also, IB isn't difficult and I think banks have realized that. Any somewhat competent human being can do it as long as they have drive.  

 

My wife went to a T5 MBA, and from my conversations with her classmates, tons of people still have no idea what they want to do with their lives as they graduate. They do know that they want to pursue their interests, not work a ton and get treated like shit just for a paycheck. There were a handful of IB-types, but they probably had some interest in finance before they even started B-school. If you're not necessarily interested in finance and are still "figuring it out", why would you go to IB over consulting? 

 

It's pretty easy and I'm still confused why there's confusion over this. If you don't have interest in finance, you don't go into IB

 
Nov 22, 2020 - 10:02am

That subreddit is pretty cringe. Only a few solid posters there post anything of quality and often times it's those who recruited for non-consulting industries post MBA. Reality is a lot of "MBA" forums online are not great - best to talk to MBA holders in person. I can guarantee someone would learn far more about what an MBA means and what it can do in the M7/T15 range if you actually talk to graduates/current students at these programs.

 
  • Analyst 1 in IB-M&A
Nov 22, 2020 - 6:00am

Bc the possibilities are truly endless out of MBB. Also, if you ever want to work in-house it's a good start. I never appreciated  this until meeting MBAs at a T5, but you can make Wall Street money at other places with 100x the stability! E.g. being senior at a large company. Many smart people understand that. Maybe without the "prestige", but high IQ people know that is an empty pursuit anyways. 

 
Nov 22, 2020 - 10:01am

No former MBB consultant I know makes as much as their counterparts in banking at the VP level and higher... most often exit to a cool startup or a Manager/Director level at a Fortune 500 (which comp is most likely in the 170-300K range). Maybe those who exit to a corporate VP level make 500K+ but those are often senior consultants exiting. 

Usually have much better lifestyles with their exits. To make that type of comp with 40-50 hour work weeks is amazing. If your goal is to make as much money as possible 15 years out of an MBA? IB may be the option. That's the main appeal of MBB over IB - WLB, not the potential of income.

 
  • Analyst 1 in IB-M&A
Nov 23, 2020 - 6:21am

Idk, I have buddies who did MBB and left to go in-house or to a boutique consulting firm and they're barely getting paid less than my friends in IB. Maybe $50-$75K less? Is that really that much less post tax (25-50k)? And I'm taking about the Associate and sometimes VP level. 

 

Comp at IB isn't what it used to be aside from EB/BB where most MBAs don't even go. Limited spots. You know how rare it is for someone to last in IB vs consulting or in-house? I feel like obviously upside is much greater in IB, but on AVERAGE the pay isn't that much different although obviously IB is higher. I've lost count of how many MDs I've seen bounce around firms / get fired. You know they're getting donuts for some of those years. I feel like I see this more and more now, as banks are notoriously impatient with MDs. 

 

You can make consistent high figures in MBB exit opps down the road. IB is inconsistent and you can get fired after one bad year.

 

I also noticed a lot of dual income couples who combined would make a lot a few years out of B-school (e.g. one in tech one in consulting) and if that's the case, why does one person need to be miserable in IB? There are more and more dual income couples now. 

 

All of the above is what MBAs consider, from my convos with them at least.

 
  • Analyst 1 in IB-M&A
Nov 23, 2020 - 8:16am

Nope, early 30's. I am just pointing out my observations from having discussions with T5 MBA students on IB vs. consulting. Obviously a lot of truth to what I said given the statistics. 

The average earnings of someone who pursues IB vs consulting post MBA isn't that wide given the failure rate of those in IB. Also, in tech / consulting exit opps you get STOCK not deferred comp. Also, IB is in secular decline. There's more scale and threat of automation. Most smart individuals are thinking LT prospects for their careers. LT prospects in IB are bad. Tech/consulting/in-house are strong.

I don't know who your "friends parents are", but I grew up in Greenwich and all my friends dads are MDs. SEVERAL of them have told their kids not to pursue finance. Why do you think that is? 

These are things that came up repeatedly in my conversations with 2020 grads. The literal ONLY reason anyone picks IB is for compensation, and that argument has gotten weaker and weaker. It's not just WLB, some of these people are still trying to get rich.

But, I don't need to argue this point. Look at the stats of where Stanford/Harvard even CBS students are going. These are exceptionally bright people. If you just think it's for WLB, you are an idiot or are very disconnected from reality.

 
  • Summer Associate in IB - Ind
Nov 23, 2020 - 9:22am
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