What is like being an investment banker really like?

I have been researching career paths a lot recently, and I really like the idea of becoming some sort of IB or financial analyst. Im a very hard worker and love the grind (lol). I honestly want my career to be the focus of my life, and I am looking for something where there is opportunity for growth. If any aspiring IB or current IB could tell me a bit about what its like, that would be great!

Just realized I mistyped the spelling- I meant to say What is being an IB really like? I promise im not an idiot haha!

https://www.wsj.com/articles/SB10001424052970204062704577223623824944472

Be prepared to work very long hours 6-7 days per week. My kid’s friend worked 105 hours per week as an analyst. The grind is one thing but your work is truly your life, particularly when starting out.

The money is great, the hours terrible, the work not stimulating (mostly mind-numbing excel and powerpoint work), the exit options great. Most wash out after 2 years due to the stressful lifestyle. Really do your research to see if it’s for you.

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Yep, it’s a grind- agree with above. One of my kids spent 2 years in IB out of undergrad- some 100 hour weeks, great $, contacts and had plenty of options in the financial sector when he wanted to move on. He’s got a great resume at 25.

But, it came with much sacrifice. Many times he was unable to do some of the fun things his friends were doing ( travel, meeting up at sporting events, concerts). Little time for volunteer work he likes to do. But, lots of careers are like this and it got him where he wants to be now. He still works long hours and is paid very well but he has more of a life outside of work.

Good luck to you!

You have to be super smart, driven and be willing to be on call and working all of the time. You also have to be well-spoken and have excellent manners. There is a real hierarchy. You cannot be arrogant. The humble, hard-working team player does best. ( They often hire athletes for this reason). Teams often become very good friends as they see each other all the time. LOL.

The money and benefits are amazing but honestly it’s not for everyone. You also have to be a self-starter and be interested in doing research and learning new things all the time (often on your own). You might be writing reports based on your research or presenting or you may be more of the technical type. Both are valued. You must be a team player and be willing to work within a hierarchy. It’s not a casual environment. Clothing, presence and even your writing will have to be fairly formal.

See if you can find someone who works in this industry and has been there for a few years. Many kids do it for a few years then go to grad school. That’s not where the real money is. It does take several years to get the experience to get the kind of money that people think of when they think of IB. People who are in fields where the jobs pay extremely well earn every penny.

All of these comments are accurate. Run very far away, unless you want no life outside of work. With COVID, you don’t even get the commardiore (sp?).

One other thing to note: getting an IB internship or full time job, even from a target school, also requires a lot of sacrifice. Recruiting for IB is no joke and usually consumes the first two years of undergrad due to the accelerated recruiting cycle (which is a shame). Your resume alone won’t get you an internship. You’ll need to grind - lots of networking with current bankers and studying for the technical aspects (specific finance knowledge) of the interviews.

I seriously don’t get the attraction of IB, particularly given that even at the senior levels, the hours are still terrible. There are much better ways to make a good income, imo.

Try to understand the difference between the more glamourous sounding/uber high payiing jobs in IB and the much more common drudge work jobs with the same expectation of hours, mental committment, and results, with fewer of the perks.

You have time to make your decisions and the career center at whatever colllege you land at should be able to provide info.

Btw, “comaraderie” is the word, @SchoolNews. Yes, a very important.

I don’t disagree, the lifestyle is very rough. However, it would be helpful to hear some of the better ways to make a good income that you are thinking about. Especially for someone who is super-smart like IB analysts need to be, that pay exceptionally well, etc. Kids would benefit from hearing what the more appealing alternatives are. Thanks in advance.

Go to your college career center and find out if there are any alums who work at firms you’re interested in. Contact them to discuss their careers and potentially get internships. Don’t say “hey what’s it like?” Do some research so you can ask pointed insightful questions.

In my experience IB are not the brainiest bunch. They tend to be social, outgoing, and friendly. IBing is a meet and greet industry.

If you are interested in finance you might want to look into money management instead of IB. Analysts and money managers are smart, slightly better life style, make a good living. If you are a math kid there are a lot of firms who are doing math modeling for investment.

Investment banks are in the intermediation business, intermediating between those who have capital and those who need capital. The values they bring to the table are relationships and analyses. Compensation is directly tied to P/L on Wall Street. The value of relationships is easy to measure. The value of analyses not so much. It’s really a glorified sales business (or “distribution” business in Wall Street parlance).

New analysts do the grunt work and their average compensation is arguably worse on an hourly basis than in quite few other professions. After a couple of years, most of them don’t make it to the next tier. They are either let go or quit themselves (because of exhaustion or their finding some other opportunities). To succeed in IB, ones needs to be smart, and more importantly, good with relationships. The investment banks look to hire in certain target schools because their graduates tend to have these attributes, and may bring with them some future relationships that were established on campuses.

The biggest competition (and threat) to investment banking is technology. Technologies can gradually disintermediate those relationships, disrupting the IB business model. Investment banks are heavily investing in the same technologies, trying to stay ahead of the curve and managing the coming disruptions. Will they succeed? It’s anybody’s guess. But one thing is certain. The IB fees will come down, gradually but significantly. Overall compensation will inevitably also come down along with the fees. There will likely be fewer investment bankers in the future.

@Happytimes2001 : Curious about two of your comments in post #6 above.

“You also have to be a self-starter…” = Could you explain your thoughts ? Thanks in advance.

“That’s not where the real money is.” = Also curious about your thoughts regarding this comment. Again, thank you in advance.

My experience (as a consultant) from a bunch of deal and litigation work with lawyers and bankers has been that bankers have a more miserable lifestyle than lawyers who in turn have a much more miserable lifestyle than consultants (both at a junior level and a senior level). But while all make a good living, the ranking of relative pay would tend to go in the same direction (bankers > lawyers > consultants). Part of that relates to the relative steepness of the pyramid (ratio of senior to junior people).

In terms of skills I tend to think top consulting firms value pure brainpower more than law firms who value it more than banks. However, PE firms and some hedge funds seem to be a special case - wanting lots of brain power and paying very well, while not having quite such a terrible lifestyle. That’s why it’s a popular choice for the most talented refugees from both consulting and banking.

Top law firms value brainpower as much as–or more than–consulting firms/IB.

PE & hedge funds & IB & consulting firms do not require a law degree & bar passage.

@publisher Self Starter in the sense of self-directed. Not that many young kids can be given a project and figure out how to do it (without step by step instructions). This is something that is difficult to teach. It’s a highly valued skill that many kids don’t learn since they aren’t allowed to fail and pick up and do it again.

That is not where the real money is: Some folks (young graduates) think making 100K is really great ( it is at that age). As people work and gain the experience they see there are various levels within the same field. Some will be making really good money and others will be making millions ( or a small % of a very big deal). Most want to be on the high end ( and if they are working many hours and experience that’s their goal). It’s not uncommon in IB and some other fields ( intense and high paying) to take a year off or even retire at a very early age ( work intensely until you don’t have to anymore). It’s hard to balance family and some of these careers.

Strangely, consulting is similar in many ways. They hire lots of highly capable graduates and pay them well but very few will get to partner level. This is really what people think of when they think of being highly paid. Consultants can often spin-off and create their own firms doing whatever it is that they have expertise in doing.

@Twoin18 Well having worked in two of the three fields you mentioned( IB and Consulting), I would say it really depends. Bankers don’t necessarily make more than lawyers or consultants. Financial people usually take a piece of the deal. My assumption is lawyers do too) and consultants are highly paid by contract. Anyone in these fields can amass a lot of money. It really depends on what piece of the deal they are getting. Though all get paid a great salary the $ is in the deals/bonuses.

Top Consulting firms do value brainpower. They need to since high level consulting involves placing people into new situations and businesses where they have to figure out solutions and work to implement them. Each situation is very different so the learning curve is steep. The IB folks tend to be in more of a specific silo. Bankers are by nature less flexible in thinking. They learn what works and repeat. Consultants can’t do that ( except perhaps in accounting). Business consultants often work with widely divergent companies. Don’t know about lawyers but I would imagine they are either working widely with all types of businesses or within a specific area of expertise.

If my kid wanted to go into any of these three fields, I’d recommend consulting. Best bang for your early-stage career and all the lessons can be applied to later entrepreneurial ventures. The second would be law. And the last would be IB.

As a recent college grad, you will only be eligible for an entry level analyst position. You will spend lots of time modeling - or dumping numbers into existing models. While you will be expected to have your brain turned on while you work, nobody is going to actually expect you to solve real problems.

You may be called in to work on something late in the day and you will be expected to cancel plans you had to turn it around overnight. You will be supporting a transaction business and cannot be the reason that there are timing delays. If you love the work, the expectation will be that you get an MBA - this isn’t a ladder you climb based on where you start.

Fundamentally, this is a difficult job to sustain with other interests. But if you are willing to make this your priority for 2 years, it’s an OK way to see one element of finance. Personally, I feel like the entry level equivalent at a consulting firm - which will require the same time commitment- offers a better overview of business.

@gardenstategal Actually, that may depend on the IB. While entry-level candidates may not be developing entire projects they may own a portion of a work product. Additionally, some IB folks are on the modeling side (which is more mathematical) and some are on the research side. The research folks actually do work that is integrated into the final product. So IB doesn’t necessarily mean just being a cog in the wheel. Maybe that’s not what you are implying?

I’m guessing you may be basing this on the experience you had ( or your child) but my experience and those of others hired as recent graduates was much deeper. I’m old (lol) but I’ve had friends who have kids in IB and I’ve spoken to them and they are doing interesting things. No one told me it was dull. Some were really deep in one area.

Agree that your life ( and prior commitments) will not matter and the expectation might be that you get an advanced degree ( though I would say not necessarily an MBA). Often the advanced degrees are in mathematical fields, economics or other such as a Phd in finance. There are often people on the same team with co-related degrees. The math person, economist and financial whiz on a team can create a better deal than any MBA. But an MBA is a great general degree too.

Would love to know if you were working in IB (or your kid was) if they also saw experience diversity in teams.

I was and did not (unless you consider having both Christian and Jewish representation to be diverse.)

I work with IBs on the deal side and am basing my comments on their experience, which is recent, as well as the experience of a couple of friends’ kids. Even current… But yes, I suppose that they have counterparts somewhere else - not on the deal side - who are having more intellectual experiences. I am not seeing those folks… They are all smart and personable. As one said, "yeah, we all used to be interesting. " And I agree, they are hardly micro managed. And the days of babysitting the printer are thankfully gone! (I date myself!)

Clearly, not everyone has the same experience. And yes, you are right, advanced degrees in other areas are also valued.