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Consulting or Investment Banking

 
#1 Consulting or Investment Banking
23/08/2005 11:59

John P

Hi, everyone.

I have an offer at graduate level from a Management Consultancy (CapG in CDC [Feb-start]) and an offer from (ABN AMRO in Sales and Trading). I was just wondering if some people can elaborate which they think is the best career line and WHY.

I know both fields are very high profile and desirable to most but how come you work relatively the same number of hours in both and yet a career in IB normally offers twice (or even fourfolds) the remuneration of a career in a career in consultancy?

How come a higher proportion of MBA students prefer the consultancy line?

What is the difference of what is offered after you burn-out in both careers and wish to leave? Which one gives you better prospects?

I don't really want to join one line and start thinking the grass is greener at the other side.

I am very numerate and entreprenuerial. I like quantitative work and generally like spotting business opportunies. I have about 3 unique business ideas I will like pursue in future. Trading will (if I am successful) provide me with part of the capital required quickly but MC will provide me with the overview of how to run a business, so I am in a dilemma as to which to go for.

Please feel free to just give your opinion why one is better than the other.

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#2 Re: Consulting or Investment Banking
23/08/2005 13:21

Anon

How random. Im a graduate myself with an offer from PA and had this conversation with a friend of mine who is working at GS as a trader. Id say take the investment banking job! You can always move into consultancy later (i think), whereas its much harder to move into a senior position as a trader unless you can demonstrate that you can accrue a significant amount of money for your prospective bank per year(highly unlikely). If your keen on your business plan, why not make some £ and then move into consultancy, perhaps building contacts and observing ways to exploit opportunities. I think most MBAs go for consulting after MBA because it opens alot more doors than banking and it equpis you with a greater array of skills. Many have aspirations of moving into senior positions in industry too. CG is a good firm to on the other and, but not as nice or as sexy as PA! Best of luck!

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#3 Re: Consulting or Investment Banking
23/08/2005 17:37

Cheggers

Would heartily agree with your comments Anon. Much easier to move from industry / finance to consulting, than the other way around. If you are interested in starting a career in MC though, then PA is hard to beat

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#4 Re: Consulting or Investment Banking
23/08/2005 18:33

Anon

Ah Cheggers my man, may i let it be known that you are at least 50% of the reason why i shall be a colleague of yours in the not so distant future, although as an analyst and not within your BOP service line but S&M. So spill the beans...as an analyst what can i be looking forward to....

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#5 Re: Consulting or Investment Banking
23/08/2005 20:26

Anon

It's a nice dilemma to have if you are a graduate, much more preferable than becoming a PA (Personal Assistant!) in the Public sector. However you are making a large number of assumptions many of which are simply false. Afterall the forum is for career advice for the consulting industry not the banking industry. People make assumptions very frequently (PA does stand for personal assistant in management, doesn't it?). However you have to make your decision (assuming that this is the case!). The thing is that some people are simply better suited to consulting than banking, vice versa, and others adapt well to both. Similarly remuneration levels vary both in consulting and banking. You mention remuneration levels for MBA's, but these tend to increase at different rates in different years in both consulting and banking. Your statement that 'a career in IB normally offers twice (or even fourfolds) the remuneration of a career in consulting' is plain wrong. Both should give you some of the skills and capital you need to run a business, neither will necessarily give you enough of both. My opinion is that, without knowing you, it is impossible to say which one is better for you. Good luck!

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#6 Re: Consulting or Investment Banking
23/08/2005 23:01

londoc

You're comparing apples and oranges. Forget all the stuff about salary and do the job that YOU will enjoy. That is the best one as it is the one that you will be good at and therefore excel at, leading you on to whatever happens next in your career. Worrying too much about salary and which job is 'best' will just end up making you unhappy.

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#7 Re: Consulting or Investment Banking
24/08/2005 00:38

Dave

John mate, Take the banking job. Its easier to move into consultancy after banking as supposed to vice versa. You'll work harder at ABN Amro than at CG, so do 2/3 years, then move. Advantages are u'll make more money, and it'll be better on your CV. CG are nothing special - they are a good consultancy with good work/life balance. Better for later on in life when need more stability with life and family etc. Do the hard work while you're still young and have no responsibilites. You're a bright lad. I'm sure you won't despise either of these places, so i'm sure you'd be ok to stick out banking for 2/3 years. Just my opinion. Hope it helps.

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#8 Re: Consulting or Investment Banking
24/08/2005 13:16

friend

I disagree with Anon. I myself starting in industry as a trader and found it very difficult to enter the consultancy side in a position higher then a Senior Consultant. Most firms have a rigorous methodology that cannot be learned without direct application to a project. As much money as you might make as a trader, that doesn't lend for gaining a high level position within a prestigious firm with a high paying salary attached. I believe it would be much more difficult to obtain a senior level position since the approach is very different then that of a trader. It takes much stronger analytical skill and strategic thinking without significant information to base your findings on. Also, you would not be allowed to manage a project and a team without learning the signficance of each role and the responsibility within that team environment.

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#9 Re: Consulting or Investment Banking
24/08/2005 14:39

Anon

friend, you make some valid points indeed, and much of what you say i agree with to a point. However i do feel it remains the case that to even be considered for a job as a trader most banks make an internship almost a pre requisite, and this is for a grad position. To enter at a much senior level, believe me is almost impossible unless you have exceptional skills that you can demonstrate. Above all you need to evidently display the fact that you can make your bank x amount of money and at senior level this is greatly higher and the stakes and pressure is higher, therefore banks recruit wisely. Highly unlikely they will recruit someone who has never traded! Conversley while getting into consulting is difficult, it is not as difficult in my opinion as aforementioned. Skills required are different and can be picked up...yes through projects but alot is having an analytical mind... most traders do to a degree. You may differ but i think its harder entering a senior position as a trader without any trading experience that as a consultant without any consulting experience!

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#10 Re: Consulting or Investment Banking
24/08/2005 19:42

a

Go into IB then consultancy later. Capgemini are okay but not leaders. Accenture and Deloitte are the leaders and theypay more too. Trouble is you will work 12 hours a day in IB but 9 in consulting. So you will be so worn out in three years that you wont want to run a business. You will be enjoying your new found freedom. Mark my words. You are more likely to leave IB for an MBA than running your own business. An MBA is two years (or one) of lost earning and increased expense/debt. I am in consulting and I love it. Good pay and I dont have to work all the hours God sends.

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#11 Re: Consulting or Investment Banking
24/08/2005 20:52

by

a, do you mind me asking what firm you work for and what type of consulting your in?

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#12 Re: Consulting or Investment Banking
25/08/2005 15:19

John

This is the classical question every MBA asks. The answer is very simple:

1) If you really are interested in a career in IB or MC, that choose whatever you like the most!

2) if what you are looking for is a big name in your CV to open the doors to other job later then there are 3 MC firms and 3 IB firms that are top of the top. To get a job in one of them is really valued and they are all at the same level. Those are, MC: Bain, McKinsey and BCG

IB: Goldmann. Merrill Lynch, Morgan Stanley

If you compare anything not on this list to one of this 6, always choose one of the the 6.

Regards.

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#13 Re: Consulting or Investment Banking
25/08/2005 15:33

JP Morgan

Do you not consider JP mOrgan a top tier invest mabk. Id put it on par with Morgan Stanley if not higher. What do you use as your means of comparison/judgement?

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#14 Re: Consulting or Investment Banking
25/08/2005 15:48

John

Hi, Don´t get my wrong. JP Morgan is very, very good, but overall acceptance is that those 3 are the top (I´ve learned this back in Harvard). As you know, rankings are not always fair...

But, as you mention it, what is your opinion about I-bank in general?

Cheers

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#15 Re: Consulting or Investment Banking
25/08/2005 17:32

JP Morgan

In general? You refering to the work? culture? money? If your refering to them all, i.e. the profession, i think you need to be a particular person to get the most out of it, i.e. not just do it becasue you can or because it pays well. As with anything you only get out what you put in! Are you thinking of going into it? What are you doing now?

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#16 Re: Consulting or Investment Banking
25/08/2005 18:03

John P

Everyone, thanks for the advice so far. I am getting a general feeling that most think banking is the better option at the moment. JP Morgan, my dilemma is that I feel I can do either of the job competently and I believe the firms feel the same way as well (I guess that is the reason they both hired me). I have a strong mathematical background and is usually in the top 95 percentile, easily, of any numerate test I take. I read and follow financial news vigorously (I am a news addict). I am also a very confident person. I think all this traits are very good in the Trading arena. On the other hand, I am good at problem solving (in business or in life environments). I have strong financial skills and I can spot how to make a business do better which I got praise for in my case study for CapG. I also think of business ideas at every opportunity. All these will be suited for MC. I graduated quite recently and work in the operational area of a big firm. The work is very boring, so both offers are saviour offers. My aim is to be financial and career independent in future and not be worrying about how my "boss" will assess me or what he is thinking. I don't want to be working for people and kissing tooshies. I want to own my business and have others work for me while I liaise with top people and be very influential. I think trading will get me quick capital if I am earning up to £700,000 within 6 years but consulting will give a strong grounding on how to run a business. But you can only make up to that amount in MC if you are a partner (10 year+ experience) and not everyone makes partner. After 6 years, one can only be on £90,000. "friend", you said you were a trader before MC? Can you provide any more comments.

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#17 Re: Consulting or Investment Banking
25/08/2005 18:04

John

Hi,

I am a PM in BCG, but very interested in I-bank. Can you elaborate on "specific type of person" ?

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#18 Re: Consulting or Investment Banking
25/08/2005 18:45

JP Morgan

I generally mean very very determind, especially at senior levels. Also the competitive nature goes without saying. If your remotely uncompetitive, I would really consider it. Then again it depends what type of role or position you are interested. Work can also get tedious and a bit boring, but because of the importance of decisions is very intense...therefore you have to be quite strong minded too. Everybody is an individual with different traits but i think if you are fine with the above you should be ok. BCG = very impressive!

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#19 Re: Consulting or Investment Banking
25/08/2005 19:01

John

Thanks. I am not interested to move into I-Bank, but my brother is, that´s why i´m asking. How about workload? In BCG a typical week for a Consultant is, say, 60-65 hours. What about you?

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#20 Re: Consulting or Investment Banking
25/08/2005 19:09

JP Morgan

John, id say I do about the same to be honest. Whats your brothers background? has he done any internships? Do you know what area of IB hes interested in?

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#21 Re: Consulting or Investment Banking
25/08/2005 19:17

John

He has a degree in Economics and is now finishing a Msc in Finance. He seems to be more interested in I-Bank than MC... as an insider, what areas you think are the most promissing within IB? M&A had already its days (at least im MC)... private equity?...

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#22 Re: Consulting or Investment Banking
25/08/2005 19:23

JP Morgan

I think you hit the nail on the head there, couldnt agree more. Where is he doing his MSc? Do they have a good career service? I know we are keen on people with internships. Is it pure IB hes looking at, or a tough yet rewarding career in finance. My cousin is working at a fund management firm (think its Morely)and is enjoying it. Prefered it to his previos job at GS. Think he also looked at Fidelity.

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#23 Re: Consulting or Investment Banking
25/08/2005 19:28

John

...or a tough yet rewarding career in finance; ...Prefered it to his previos job at GS.. Why is that? Is a carrer as, say, Financial Director tougher or better in any sense that I-Bank?! Why?

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#24 Re: Consulting or Investment Banking
25/08/2005 19:37

JP Morgan

'tough yet rewarding career in finance' - I was refering to not necessarily IB but any career with a strong financial element e.g. fund management, VC, Stockbroking, Accounting etc. Im not too sure the reasons behind why he prefers his current job to the one at GS, I'll try and get an answer to this or better still try and get him on the forum.It may just have been a change of seen and work for all I know but i'll ask. The last question is difficult to answer as it probably varies from person to person and the type of person you are and what one is after. Personally id prefer IB. I think id find being a Financial Director a tad boring. I think it may be tougher in the sense of greater responsibility not to discount the responsibility needed and given to one in IB, but not as exciting or as fast paced as certain elements of IB. Hope this helps!

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#25 Re: Consulting or Investment Banking
25/08/2005 19:43

shocked

Is 60-65 hours really the average? A tough week, facing deadlines, sure, I can see that could be necessary, but every week? Don't people just leave? Sorry - I'm just really shocked. You said you were a project manager: aren't you under pressure from your team to cut it down?

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#26 Re: Consulting or Investment Banking
26/08/2005 13:42

DL

Nobody I could find is lower than 50 over the last 6 months. Average across a variety of levels (analyst to partner) is ~55, with spikes of 65-70. Generally higher as you go up the hierarchy. Then again, this is just at my firm.

As a PM, you are under pressure WITH the team to deliver quality to the client. Of course you try not to burn people out, to give them some rest and to be there with them if they need help, but that's the way it is. Turnover is high in consulting for several reasons, and this is one of them; having said that, in nearly 15 years I have only had two cases of people "just leaving".

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#27 RE: Consulting or Investment Banking
13/08/2007 17:13

anon to DL (#26)

re hours; this is very dependent on the firm and the project. I am a consultant for KPMG and my standard week is 35-45hours and some of that is spent working from home. Of course the lifestyle cuts a big chunk off your salary

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#28 RE: Consulting or Investment Banking
13/08/2007 20:43

Anon to anon (#27)

I recently had this choice to make, but a different position in IB.

I took the IB position. From a financial point of view it made sense. But also from a skills point of view, i felt at the IB that you have more options, theres more different types of work to do....

I felt with consulting, if you decide to change careers, you have a stronger skill set with IB.

The only think i would question, is the security of your position at ABN, as a graduate.

I say this, because none of the interns last year were given a job. Maybe they were all crap? i do not know....

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#29 RE: Consulting or Investment Banking
14/08/2007 16:00

Delete to Anon (#28)

Take consulting over IB - 5 years of IB qualifies you to work in another IB. 5 years consultancy qualifies you to work anywhere.

<br>It can seem like it is tougher to get into IB after consulting but most will not want to. IB to consulting is easier but by that time you are burnt out and do not have the appetite to learn - you just want work life balance and guess what.

<br> When you join consulting from IB you wont get a work life balance cos it will take you 2 years just to get a handle on all the extra things you do outside of your daily 9 - 5 role e.g. Recruitment, Practice Development, Sales, Vendor Relationship, Thought Pieces, Industry Events...

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#30 RE: Consulting or Investment Banking
14/08/2007 16:04

anon to Delete (#29)

i'd argue about IB not qualifying you to do anything, especially ater 5 years.

Hedge Funds, PE/VC etc.

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#31 RE: Consulting or Investment Banking
14/08/2007 16:14

Delete to anon (#30)

You are right - What I mean is IB actually gives you skills to stay in FS. You may even make it in to a consultancy that specialises in FS. However knowing one some ratio is or how to use excel, or some FS software package will not matter so much when you are trying to get into consulting.

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