Investment Banking Career Pros and Cons: A Comprehensive Guide

Investment Banking Career Pros and Cons

In this guide you will learn about the good and the bad things about being an Investment Banker:

Pros:

  1. The money
  2. Work with smart people
  3. Good perks
  4. It opens doors
  5. You gain expertise very quickly

Cons:

  1. The hours
  2. You are never off the clock
  3. Sexism
  4. Its very competitive
  5. Work can be monotonous starting off
  6. The stress

PROS:

Investment Banking Career Pros and Cons – Pro #1: Good Pay

The compensation is great. Whether you are working for a big bank or a so-called ‘boutique’, the salary will exceed your expectations.

You will also receive starting and performance bonuses, although some of these are deferred so you don’t get them straight away.

As an ‘analyst’ you can make approx. £75k straight out of university with an additional bonus of 50% – 70% on top of your base.

An ‘associate’ will make anywhere from £175k to £400k including bonus. VP’s will make anywhere from £400k to £650k. Directors and MD’s can make £m’s every year.

Money

Investment Banking Pros and Cons – Pro #2: Opportunity to Interact & Work with Very Smart People

You will work with very smart people – both clients and colleagues.

There is daily interaction with people who are working on the latest technologies and solving real world problems.

The benefits of long concentrated interactions with smart, driven people can’t be overlooked. You will never have to deal with lazy colleagues who don’t pull their weight.

You get to work on challenging transactions and are given major responsibility within only a few months of joining the firm.

There is a very steep learning curve. You will learn a lot in a short space of time. You also develop personally due to the continuous learning from your peer group.

The training is extensive and will never end. You get the chance to develop a varied skill set, from accounting to networking and people skills.

Interested in a career in Finance, check out my post on Why a Career in Finance Could Be For You

Investment Banking Career Pros and Cons – Pro #3: Good Perks

You may work long hours, but there are great perks working as an Investment Banker:

  • staying at the best hotels 
  • eating at some of the best restaurants across the globe
  • Business Class flights
  • subsidised access to the best gyms. 
  • the best medical cover 
  • great pension
  • good paternity and maternity leave

Investment Banking Pros and Cons – Pro #4: This Job Opens Doors that Others Simply Cannot

You will get the chance to interact with very wealthy individuals, and build a fantastic network of connections.

There are wide prospects if you decide to leave investment banking i.e. consulting, management. 

Investment banking will look great on your CV and you will be highly employable to any company.

You can also easily go into other departments in the bank if you want better work life balance.

Many bankers start up their own companies operating in completely different industries as they have an understanding of how companies operate.

If you start your career doing something very hard, then everything else becomes easier.

A career working on Wall Street in Investment Banking'

Investment Banking Career Pros and Cons – Pro #5: You Can Become an Expert in a Short Space of Time

Working all day every day does bring some advantages. Three years of working compressed long hours can be the same as a lifetime of experience in other industries. 

People in their early 30’s can make Partner and be responsible for millions of dollars ar a very young age. Experience comes fast working in Investment Banking.

Evere wonder how long it takes to become an ‘expert’ in other fields? or how long it takes to become even qualified? If so, check out my blog post How Long Does it Take to Become A….


Investment Banker Career Pros and Cons #1

Investment Banking Pros and Cons – Con #1: The Hours

 

The hours are long. An analyst can typically work 80-90 hours a week, often until 1-2 am.

However, not all that time will be spent doing challenging work.

You may be waiting for a client to send information and then when they do, have to turn that info around in a very short space of time for a Director or VP. 

16 hour days will be the norm. Often analysts will work 20+ hours and many weekends.

As you progress through the Bank, your hours will get better as you will get better at managing time and get more slack from your seniors.

An associate might work 70-80 hours, with a VP typically putting in 60-80 hours.

Investment Banking Career Pros and Cons – Con #2: Expectation to be Available 24*7

You can never really make plans for the weekend. You frequently cancel upon your personal plans.

You’re always expected to be able to answer calls and emails. 

This means in the evening, at weekends, during holidays. If this is something you don’t think you can put up with, then a job as an investment banker is not for you.

Maintaining relationships with certain friends can become tricky too as you will be constantly tired and stressed.

During the initial years managing expectations of friends, parents, and partners can be really difficult. It can also take its toll if you are a young parent

Looking for a job in Finance but want more of a 9-5 job where you can live a normal life outside work? If so, check out my post on How To Become a Finance Director

Investment Banking Career; working long hours

Investment Banking Pros and Cons – Con #3: Sexism

 

Investment banking is a male-dominated field. Unfortunately, women may be paid less and not seen as equal to male colleagues. 

Alpha males are everywhere in this industry and few women make it to the very top of Investment Banks.

Women in financial services comprise 54% of the workforce, but only 16% of senior executives and none of the CEO’s from The Real Reason Why Women Are Leaving Wall Street in the Atlantic.

Investment Banking Career Pros and Cons – Con #4: Never-ending Competition

 

Investment Banking is really competitive because it pays better than nearly every job and will open lots of doors for you in the future.

Bankers are expected to compete as part of their daily routine.

There can be stress as you are always looking over your shoulder in case someone is performing better and you get sidetracked. Prepare for fierce competition.

If you are interested in finding out more about a career in IB, check out my post on How to Become an Investment Banker

Investment Banking Pros and Cons – Con #5: The Work Can be Repetitive

Your life as an analyst can be lots of emails, excel, powerpoint, endless drafts and markups of pitches and presentations. Not exactly the most exciting work.

There will be lots of emphasis on making slides look pretty, at the expense of value add analysis.

As you progress into more senior roles there will be more client interaction, but starting out there will be lots of number crunching, editing and reformatting.

The Stress of a career as an Investment Banker

Investment Banking Career Pros and Cons – Con #6: The Stress

Investment banking is a gruelling career – one of the most stressful jobs in the whole financial services industry.

Bankers can be responsible for the whole financial future of companies, where one bad decision can put them out of a job. 

Clients pay the bank huge fees and so have unrealistic demands and expectations of you.

Time is often a constraint and also market factors can work against you. 

On top of this the atmosphere is not collaborative – people will do what they can to get ahead.

A lot of the time you will be tired also does not help your stress levels.

Investment banks are also known for having their fair share of difficult and unlikeable people which can bring its own stresses.

If you found the above advice helpful and want more, check out the advice of 100 graduates 10 years out of university in my book ‘1000 Years of Career Advice’.

You can get the free ebook version here.


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Hi, I’m Paul. I’m a Finance Director with 14 years experience working for big multinational companies.

I interviewed 100 graduates about their career paths and advice for a young generation.

This blog aims to help young people figure out their career paths.

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