Ah…the classic battle that never seems to be settled: investment banking versus consulting. Which one is better? Or more importantly, which is better for you?
Ultimately, it’s kind of like choosing your favorite ice cream flavor. The foundational elements in all types of ice cream are the same. However, there are both subtle nuances and noticeable differences that make Rocky Road and Mint Chip two very different flavors.
The same is true for investment banking and consulting. Both are professional client service fields that utilize research, data, and let’s face it, a lot of Excel. Both offer advice to senior management. But there are also striking differences in each industry that you should consider before making your choice.
Our team has been fortunate enough to have experiences in both industries; one of our team members sheds light on his decision to ultimately choose investment banking over consulting. Read on for his story; we’re sure it will provide insight on which path is best for you.
Growing Up in a Family Business
Until I was 10 years old, I always wanted to be a professional baseball player. However, after realizing my athletic skills and hand-eye coordination were average at best, I drew inspiration from my entrepreneur dad, and thereafter, I always wanted to “work in business” (whatever that meant).
I remember running around my dad’s factory, looking with a child’s awe at the different machines and hundreds of boxes that lay around, ready to be shipped. Through my dad, I saw what wild success a family business could have and what it could mean – fun vacations, a comfortable home, wonderful dinners, and more.
But I also saw the downside, especially during the Great Recession of 2008. Our family lost our home to foreclosure, our car was taken away, and there were times when our lights wouldn’t turn on because bills weren’t being paid.
Regardless of the ups and downs, my father always embraced the struggle of running his own business. I admired that greatly, and it left a deep impression on me in my formative years. One thing was for certain though – I told myself I would never, ever become an investment banker.
My Promise to Never Be an Investment Banking Analyst
Back in high school, I remember constantly hearing about how “evil” people were in the finance industry. The news would constantly blame the big banks and their leaders for wrongdoing. Banking antagonists in movies seemed to always be so concerned with money. I developed an innate bias against the financial services industry.
In addition, I grew up in a time that placed more of an emphasis on social impact than previous generations. I spent a vast majority of my time in high school volunteering. It was constantly drilled into my head that I needed to find “meaningful” work. Of course, in that world there was only one correct definition of “meaningful”. Thus, investment banking was the furthest on my list of career aspirations as I graduated high school and headed to college.
It’s funny how life works sometimes, isn’t it?
The Classic Undergraduate Business Major Dilemma – Investment Banking or Consulting?
I went into college knowing I wanted to one day start my own business. Yet, I was unsure of where to begin. As a Business Administration major, I learned the core academic principles of business: accounting, economics, and even ethics. However, these classes never seemed to really be what building a business was all about.
Then, through attending various business organization events and speaking to older peers, I learned for the first time about the two fields that most business students vie for: investment banking and consulting.
At first, I had no idea about the specifics of these two industries, and it took a lot of Googling and peer discussions to get a clearer sense of which one was right for me. (Management Consulted wasn’t yet what it is today!). After a lot of introspection, consulting felt like the better choice for me.
How (I Thought) I Knew Consulting was Right for Me
The amount you enjoy recruiting for any given industry is a great indicator of whether or not you’ll be a good fit. While practicing for the case interview isn’t what I would choose to do on a Friday night, I found case studies to be intriguing and challenging business puzzles that were satisfying to crack.
Furthermore, consulting fit into my larger plans much better than investment banking. Consultants have broader exposure, and think much more strategically about the best (read: most efficient) ways to tackle big business problems. It may sound far fetched, but I wanted to learn this ability to tackle the world’s biggest problems.
My Experience at Deloitte Consulting
After a challenging recruiting season, I was fortunate enough to land a junior consulting summer internship at Deloitte. I was excited to start my journey as a consultant at one of the top firms, help clients achieve their goals, and learn more about what business was all about!
Coming off an undergraduate budget and diet, my first impression was how amazing it was to stay at fancy hotels and eat expensive dinners for free. In addition, I was being exposed to top-level management during our periodic check-ins and learning a lot about how large corporations did business.
Oftentimes, my team and I would go to the whiteboard and map out strategies to solve the various problems our client was facing. We would then be assigned different workstreams, and I was given a small project to own. Even though I was a young intern, my team treated me with respect. They were always willing to answer the multitude of questions I came across.
All of these factors led to a solid Deloitte Consulting internship experience, and I thoroughly enjoyed the people I worked with, but my interests were soon about to change.
How I Fell into Investment Banking
Right before my Deloitte Consulting internship began, I had started investing in the stock market. I poured my entire life savings – a few thousand dollars that felt like a whole lot more at the time – into the market. I woke up every morning at 6:00AM (I was on the west coast) to analyze market trends. In short, I became obsessed with constantly checking my stocks.
As I started investing, I realized that I had absolutely no idea what I was doing, and that’s what caused me to look deeper into finance. I started buying and reading several books about investing and even built my own (crude) financial models to value companies. Then, I even created an investment organization within one of the business organizations I was a part of on campus.
I realized during this time that I had an innate curiosity about the world of finance – the exact field I never thought I would join. Reading through investment books and topics like accounting and valuation piqued my curiosity.
Why Investment Banking?
A common question asked during investment banking interviews is: “why banking?” Coming from a heavy consulting background, I was asked this question often during my senior year.
I had a great experience with Deloitte Consulting and even received an offer to return full time, but my short investing experience taught me that I hadn’t really given banking a fair chance. My own wrong assumptions had caused me to believe that finance, and specifically IB, was a career choice that wouldn’t fit my long term career goals or personality.
I found myself surprisingly challenged by the investment banking guides I was devouring, and wanted to know how and why a company’s stock price could represent the value of a large, complex organization. This innate desire to learn about the financial perspective of analyzing a company became the cornerstone reason I wanted to become an investment banker.
Recruiting for Investment Banking
Everyone’s investment banking analyst recruiting process is different. For me, two factors played the most important roles: networking and obsession.
Coming from a consulting background, it was important for me to explain my change of heart in a way bankers would understand. I spent countless hours on the phone and in coffee chats in order to explain my story. The best advice I have for any candidate who is serious about banking: hustle your way into as many in-person interactions as you can with bankers at your target firms.
Next, my obsession. Because I needed to play catch up to my peers recruiting for investment banking, I obsessed over mastering the material. Whenever I wasn’t studying for classes, I spent bus rides thinking about how I would best answer behavioral questions. I even made my friends quiz me on common banking interview topics while walking to class. Whenever I had free time, I thought about how I could succeed in investment banking analyst recruiting.
Working at J.P. Morgan
Eventually, I was fortunate enough to land an investment banking analyst role at J.P. Morgan, where I worked for several years within one of the firm’s top coverage groups.
Immediately, I noticed several contrasts to my Deloitte Consulting experience. First, there was little to no travel as an investment banking analyst. Even as I became a more senior analyst over time, I would occasionally attend client meetings. Still, it was nothing compared to how much I traveled even as an intern at Deloitte. This meant a lot more time to bond and get to know my colleagues, who for the most part I really enjoyed working with.
I also enjoyed working on transformational M&A transactions and IPOs that shaped the industry I was covering. I learned how to build complex financial models and finally learned how a stock price reflected the value of a company.
But as a downside, I felt like I was a doctor on call. I constantly needed to check my email to see if any of the transactions I worked on required immediate attention. My weekends were no longer mine, unlike at Deloitte. Though I didn’t mind this at first, eventually the lifestyle started to take its toll. It was different than travel – instead of going on the road for work, work was with me wherever I went.
In the Consulting vs. Investment Banking War – Did I Make the Right Decision?
Whenever people ask me if I feel like I made the right decision, I always tell them that if I had a time machine and could go back in time, I wouldn’t change a thing.
I enjoyed learning about consulting and felt like I gained some valuable skills that I’ll always carry into my future. Though investment banking was challenging, the technical and interpersonal skills I gained will be invaluable to me no matter my future career path.
From all that I’ve learned, I think the most important lesson is this – do what you most enjoy, and your career will fall into place as it should.