Why does everyone want to work at a top bank?
Genuinely curious why does everyone want to work at a top bank? Is it because of compensation, prestige, exit opps? What is the difference between working at say GS and RBC?
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To answer your first question, yes, it's because of of compensation (debatable), prestige, exit opps.
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$$$ and prestige=Ability to flex on others
GS pays less than a lot of MMs at the junior level
ubs pays the most i've heard
When it comes to internship compensation he's not wrong. It's paid hourly with overtime over $61/hour. Every other bank is pro-rated
The difference between working at GS vs RBC - stronger deal experience, better brand name/prestige, better exit opps. Compensation is not that much of a factor because all of the top banks on the street pay roughly the same. There are many firms that will pay more than GS, but Goldman is Goldman.
That said, you will still get a great experience at a bank like RBC. The only point of comparing is if you have offers at both and need to decide. If so, yes, go with Goldman. Nonetheless, if you work at a BB/EB or Top MM, you've set yourself up for a great future.
At the end of the day - The ability to stroke ur ego by lowkey shitting on ur college peers and feel better about yourself sacrificing most of ur college life for a more "prestigious" job + the insecurity of what people might think of you for working at a "lesser" shop.
Plus, compensation. (in some cases does not apply e.g. choosing GS over other BB)
This.
I am not sure receiving an offer from a more prestigious bank necessarily requires extra effort. Getting into ANY good bank will require serious effort during your studies.
Then the recruitment process is very random, many of my peers from university for example found themselves obtaining offers from (JPM/GS/MS) but were rejected from Barclays, UBS. A lot of this has to do with fit.
Ultimately, if I was given the choice of GS vs Nomura, considering both jobs will be very demanding for similar pay, I’d rather take GS, which guarantees better exit opportunities, and certainly more deal exposure and a more enriching experience.
Having said this, I don’t agree with most people on this forum regarding the fact that it’s JPM/GS/MS or bust. I think you can have an amazing experience at most other banks and set yourself up for a great career whether you work at GS, Jefferies or CS (at least in Europe).
Just my 0.02
Agreed but I think it applies more to Europe whwre you have less control over your application - ie networking doesn’t matter which makes the process more random. I’d disagree that it’s based on fit, it’s more due to quotas and who they need both diversity + languages criteria which narrows down fairly quickly candidates.
All great points. Recruiting is very random and subjective and, therefore, not always indicative of merit.
You're telling me CS NYC is a poor place to start your career? Not sure I agree
it comes down to two things. Deals and prestige. When looking for exit ops, having a BB may open up more doors for two reasons. One, you have worked on the biggest deals out of any banks besides BBs ofc. Second, eventhough many kids from MM banks go to great PE or HF shops, there are other exit ops that people think about/ take. Havinga BB name of ur resume sets you apart because you have worked for a reputable company. For example, comp sci majors go to google or amazon and then can get a job anywhere.
amazon is not really selective for tech positions, g/fb/unicorns are another tier
This is 100% accurate
FB is so not competitive it's actually scary. I've seen some really unqualified people work there.
Ultimately it's due to the belief that a better brand name will lead to more opportunities
This is the type of champagne problem that ivy kids who went to prep schools have to deal with. As someone who came up broke, non-target and just hustled (not a genius), I'm just happy to be here. Practically speaking, there is only differences in extremes and it doesn't matter too much. Been stuck on this website since freshman year and the amount of pointless dick swinging is insane and fruitless; just get happy you got into the club bro.
Appreciate your perspective but sometimes people are just wired that way (to always chase for the top dog option and won't settle for less), doesn't always correlate with wealth/socioeconomic status. Some people are just more competitive than others
Because my parents gave me conditional love and working at a top bank meets their standards.
As an Asian: because I wasn't smart enough in HS to study law or medicine so finance is my redemption path in the hopes that father and mother can finally be proud of me.
amen
Hilarious; that's a good one
This is too real lol
I haven't seen it answered in this way yet, so I'll chime in that ultimately it boils down to one word: optionality.
A lot of the people that go to Harvard/Stanford don't actually know what they want in life right away (which is a totally fine thing at that age), they simply know that there's a big tournament that they've been playing all their life with everyone else their age, that they are inherently really good at this tournament, and that they have been able to win basically every round of the tournament so far.
It's usually pretty obvious what the next round of the tournament is, if you choose to keep playing.
So when all the Harvard/Stanford students are sorted into their Econ major in undergrad, they realize that making it into GS or McKinsey is the prize in that tournament round, so they try to get into the best bank or consulting firm possible out of sheer competitive reflex.
They aren't ready to make a real career decision yet, so they decide to simply delay that decision until after they've made it to a further tournament round. They play the tournament because they know that winning each round creates a perch from which they can ultimately decide what they actually want to do. That perch gives them literal capital ($$$), social capital (prestige/brand), and professional capital (financial/analytical or other skill foundation) that creates the optionality to someday actually make a career decision.
Even if you you eventually want to start a tech startup or a launch a surf resort or work a middle American corporate job or create a suburban smoothie stand or become a YouTube vlogger, the credibility you have from the 2 years you spent at Harvard followed by the 2 years you spent at Goldman TMT are still going to be nearly universally valued by your future colleagues/employees/investors/creditors/audience.
The crazier thing is actually when people are sooo good at the tournament that they become absolutely addicted to the limitless optionality and never make an actual career decision - they simply just keep winning into the next round (which is great for some people, but not for everyone). They accumulate so much career capital that they don't realize that they've taken a completely risk-off path.
I would argue there exist plenty of people who do Harvard -> GS -> KKR -> HBS/GSB who don't make an actual life decision until the end of their MBA at 28.
Obviously at that point they get to make a pretty dope, enviable life decision, so I'm by no means trying to hate - I'm merely attempting to provide a bit of perspective on the original question.
As an aside, what's funnier still is that plenty of those people even after their MBA will try to just go into Product Marketing at Google, Partner Strategy at Apple, Corp Dev at Facebook, etc. - thereby accumulating another risk-off high-optionality path. Ultimately these people will jump from big tech and "take a risk" in the next blitzscaling startup like Uber - likely receiving an equity payout from that company's exit which is at most comparable to the size of one of their bonuses from their megafund days.
In conclusion: If you are the rare breed that knows you want to be a career banker, go to the bank that's going to develop your skills. If you want to continue to delay your decision and compete in the tournament, go to Goldman Sachs.
BOCTAOE
Great response.
I think this is why you see a divergence at the MBA level in terms of bank selection. BB obsession and general league table dick measuring doesn't hold the same weight for many, because MBA's aren't looking to leverage it into 2 year PE/HF exits as often.
A good number of my peers picked MMs or even small boutiques over BBs, which at the analyst level would be considered blasphemy by many on this forum. The majority focused on culture and location (where applicable) over "name brand" when they actually wanted to be bankers.
Great post - it's similar to why people go to Harvard over like, Cornell (insert whatever other school you want here, point isn't exactly about Cornell). Yes, top students at Cornell will be as qualified as the top students at Harvard and will have the same career options open to them (and let's be honest you'll be learning a lot of the same things), but Harvard is simply going to open more doors.
It is at this point many decide the tech startup / surf resort / smoothie stand is not only an acceptable path, but can even provide meaning (and can be levered up with favourable financing from a friend). Their recent Medium post lays it out quite nicely.
Agreed, sounds like we know a lot of the same types of people, haha
Well said
Pay — both current compensation and future prospects thereof — is generally positively correlated with prestige. Concurrently, working at “prestigious” places generally means you’ll work with more capable people on more important / well-known projects, which in turn makes you more capable + valuable and feeds back into the pay factor; it’s kind of a chicken or egg thing.
Think most of the mystique of “prestigious” employers can be explained by a combination of the two above factors. Sure, there’s some exogenous “prestige” of decades-old renown of some shops, but that luster wears off very, very quickly in financial services if they’re no longer hiring the best people and paying them well.
Like everyone has said above, everyone is competitive and wants to be at the top because they hear of people who are at that level and how "successful" and "cool" they are so they believe that in order for them to be the most successful and accomplished, they need to be at that level. It's truly crazy how many people are actually just doing all of this just to get to the top when they really don't have any genuine desire for what they are doing. I know a lot of associates and VPs at my firm who repeatedly say they have no idea what they want to do with their lives but because they are doing well at their current jobs and making good money, they might end up doing IB forever.
I don’t understand your post. There is no difference between GS and RBC
I think he's making a comparison to illustrate the fact that why students would pick the prestigious enviable bank which is the venerable RBC, over a bank like goldman sachs
I say for Goldman the brand name, exit oops, and your joining a big network of people, kind of like joining a IVY league school. Also if your one for planning out your life you may go to Goldman. Strive to be their make partner (which isn’t easy to do) then retire and join politics, maybe as a head of treasurer in the presidents cabinet.
because to some degree, the quality of employees is at a higher caliber. this allows you to grow and learn faster
The dream takes place at B-bar on a nice summer Saturday during intern season. After hours of being introduced to person after person who have internships at X/Y/Z banks, you inevitably bite your tongue and wait for someone to ask you with an air of pompousness "What do YOU do in the city". You coolly take a sip of your vodka soda and answer, "Oh i'm in banking. Goldman."
Amazing.
A combo of everything you listed, but for some I'd have to say pure ego. Case in point below:
on a networking call with VP at Goldman
Me: "Why did you decide to work at Goldman over XYZ?"
Him: "Because it's Goldman dude."
Same happened to me when I was networking for SA gigs. Looking back, asking "Why GS over Barclays?" was probably a dumb thing of me to ask anyway though
Not gonna lie - I would choose Barclays (fully acknowledging that GS carries more 'prestige')
OP, on an unrelated question, I also often wonder why people want to date hot girls vs un-hot girls? Is it because of better sex, prestige, exit ops?
I think he'd choose Arkansas State over Harvard...nvm he wouldn't get into either
I don’t think anyone “wants” to date ugly girls. they just companies bc something else makes up for it. same goes sometimes for school, maybe the location, maybe they have friends already there idk
I think this also matters a lot in context of what market you're in.
For example, if you're on the West Coast, there's going to be a marked difference between working at GS/MS/Q vs. essentially everywhere else - Q gets basically all of the most interesting sell-side mandates, GS/MS get lots of good large cap M&A / IPO deal flow. When the consistency of quality deals is actually so much higher in the "prestigious" groups, it makes sense.
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