Investment Banking Vs Management Consulting

Investment Banking Vs Management Consulting 1

Fresh graduates often question whether investment banking or management consulting is a better career choice. Many of them already know the very first thing about both of these career pathways: excellent incomes. A few of them know that work-life balance is a difficult act in both as well. Here we go a little beyond popular perceptions to find out what these working jobs really involve. First, just a little about both careers and sectors.

Investment banking (IB) denotes a financial service that creates capital for individuals and organizations, regarding one description. Investment bankers (i-bankers, or just “bankers”) give investors counsel on market strategies that can minimize their risks and maximize their returns. They offer assistance for mergers, acquisitions, and restructuring. Risk management is a significant part of the i-banker job.

A management expert (MC) provides professional advice to businesses on operations, restructuring, and cost reduction. They are called upon to create ways of help companies make a turnaround. They take a look at what their customer companies have been doing and suggest what they can do to execute better. MCs offer with different kinds of problems and, for example, may be asked to suggest to a marketing team how to boost its product delivery or advise HR people how to create a new health plan for employees.

I-bankers start with a summer months internship, followed by an entry role as a financial analyst for two years, then, as a co-employee for two or 3 years, before elevation as controlling director or VP. MCs start their careers as business analysts and gain experience for just two or three years before becoming an associate or senior consultant.

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MCs may not focus on an internship normally as i-bankers, since banking institutions do the majority of their recruitment from among interns. Nonetheless it is a good idea for MC aspirants to intern to gain industry knowledge. Salary is just about the biggest attraction that the two careers hold. At least in the first decade, i-bankers beat consultants in take-home figures. 200,000, according to Investopedia.

But they usually don’t see the big bonus deals that go to i-bankers. The space raises higher up the ladder significantly. But the article adds that consulting offers perks including travel allowance. Health insurance and pension deals could be better. Of the entire year By the end, bonus comprises 50 percent of the annual compensation for bankers.

A handful of skills are common between the two jobs: a number-driven, analytical approach to resolving problems and preternatural skills in diplomacy almost. MCs need to comprehend the management structure of their client companies, identify areas for improvement, and describe what must be done to improve their functioning. This means critical-thinking skills, a way with people, the ability to focus on business procedures, PowerPoint skills, and communications skills.

I-bankers need good knowledge of financial modeling and Excel skills and the capability to put in extended hours. IB is for individuals with the sharpest quant skills. Consultants need these skills also, but not to the same level. Senior i-bankers get demonstration opportunities with clients but junior bankers not really much. In comparison, MCs at every known level get such opportunities. There are more number-crunching and deal-making in IB. Consulting gives you a wider perspective of business.

An MC is likely to be thorough at the conceptual level and also have strengths in various areas. Both working jobs involve similar applicant private pools of generalists, interval training, excellent pay, great exposure to commercial clients, and high turnover (many employees who leave achieve this to join an MBA program or other financing/strategy careers after two or three years). MCs like a more casual atmosphere at work often.