Investment Banking vs. Management Consulting (Thoughts From A Former Banker & Consultant!)
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- เผยแพร่เมื่อ 14 พ.ค. 2024
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⏱Timestamps⏱
0:00 - Introduction
0:46 - The Firm Hierarchy
2:27 - What You Do in Banking
3:38 - Financial Edge Sponsorship
4:33 - What You Do in Consulting
6:06 - The Pros
9:19 - The Cons
11:17 - How You Can Decide
🎥My Other Videos🎥
Crazy vs. Easy Week in Banking: youtu.be/watch?v=-DNtDWhYQXs
My Role During a $6.1BN M&A Deal: youtu.be/watch?v=TjjKFnMH1TI
J.P. Morgan Recruiting Secrets: youtu.be/watch?v=Pg7iMmylLZ8
Why I quit investment banking: youtu.be/watch?v=hQfLWritg9s
Day in the Life of an Investment Banker: youtu.be/watch?v=2Vm-bmlt55A
How Much do Bankers Make?: youtu.be/watch?v=IbiwN2gDkWc
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✏️Description✏️
In this video, I compare the industries of investment banking and management consulting. I discuss the firm hierarchy for banking (and where firms like Goldman Sachs, Morgan Stanley, J.P. Morgan, Evercore, Qatalyst, and more rank) vs. consulting (and where firms like McKinsey, Boston Consulting Group, Bain, Deloitte, and more rank). I also provide insights on the pros and cons for each industry, discuss the lifestyle, and criteria on how you can decide.
🔎Disclaimer🔎
All content in this video is for entertainment purposes only. I am not a professional financial advisor and my statements are not to be taken as instructions or directions. In addition, some of the links above are affiliate links, meaning that at NO additional cost to you, I may earn a commission if you click through and make a purchase.
The current market/economy is unnecessarily tougher for boomers/senior citizens, I’m used to just buying and holding assets which doesn’t seem applicable to the current rollercoaster market plus inflation is catching up with my portfolio. I’m really worried about survival after retirement.
Just buy Gold, the government has failed us or try to diversify your portfolio to other market sectors, that way your investment is balanced and you don’t get to make so much losses.
Indeed, gold proves to be a strong investment and a reliable hedge against the declining value of the dollar. I've held onto some gold for quite some time, and I'm thankful that my advisor's rapid adjustments to market fluctuations have likely prevented significant losses.
Please can you leave the info of your lnvestment advisor here? I’m in dire need for one.
Just research the name Angela Lynn Shilling. You’d find necessary details to work with a correspondence to set up an appointment.
I just checked her out and I have sent her an email. I hope she gets back to me soon.
Pro: In banking you don't have to pay rent because you sleep under your desk :)
loooll nope still have to pay rent :(
Till your young yrs...after that u live in million dollars houses
Lol
Lmao
this is so true one of my college friends live in time square and i was wowed until i realized they were 3 people sharing a living room cuz they essentially dont go back rip
This is a great video as a finance major I’m still unsure which field I want pursue and this video really helped
One of very few truly 10/10 videos out there!
Thank you!
Congrats on the content!! Really useful!!
You forgot to count in the travel time for consultants to get to a more realistic comparison in hours per week vs banking . First year analyst doesn't need to catch the 7am flight every Monday morning. I.e.The good thing about banking is that all the crunch hours are done in the office, not a a client site in the middle of nowhere.
Similar for the big consulting firms - small companies ‘in the middle of nowhere’ just cant afford the fees.
@@MrAngry3232 I have worked with MBB and in bulge bracket I banking; Many big clients have factories in the middle of nowhere my friend. A banker never has to go there. I worked more hours in consulting per week compared to banking.
It is such an informative video I must say. And I do agree on the part you mentioned about quantitative or qualitative thinkers. Thank you so much for this! Keeping up with the great work.
Feedback appreciated.👆
Wanting more info and insight?
WatsApp the numbr above
Endeavor to reach out!!
What a beautiful content👏🏾👏🏾👏🏾
Beautiful video👏🏾👏🏾👏🏾 well put together.
Truth! Consulting perks are amazing!
thank you so much! It is so clear to me now.
LFG! Ben! Great Energy
thanks richie!
Great video!!!!!! Loved it.
I learned so much from watching these of your videos!
I found this channel randomly; glad I stopped by! Great content!!
really good insight, thank you
Really helpful video! Thank you from Korea.
Thank you so much, Ben. All of your videos have been super helpful. Thank you again! -Erin (student interning at DB)
How is DB? Do you feel like people there get deal experience
Aside of all that , hotel photo : Hilton Busan . Should be a Bingo for this 😆👍🏻 keep going on !
excellent video- thank you for this!
Thanks a lot this quite the eye opener. May you kindly do one on Equity Research and Quantitative Analysis as well?
Love this video as always!
thanks martin!
Thank you very much, buddy
I’ve binged at least 20 of your videos since I found your channel last week. Good stuff, Ben. Keep it up.
Great video. Thanks.
⏱Timestamps⏱
0:00 - Introduction
0:46 - The Firm Hierarchy
2:27 - What You Do in Banking
3:38 - Financial Edge Sponsorship
4:33 - What You Do in Consulting
6:06 - The Pros
9:19 - The Cons
11:17 - How You Can Decide
Consultants cant get buyside jobs??? I thought they could go to PE or even hedge funds?
The information in this video is what I am looking for. Thank you so much 🙏
Great video but I feel the emphasis on great WLB at consultancies is kinda misleading… they still (particularly in the M&A teams) work until midnight/ early hours of the morning and even when they do finish working it’s not exactly like they have a lot of time for their “life” because they’re in a hotel miles away from home.
very good informative vdo thank u
Good to mention “absolute best exit opportunities” as a pro for IB is highly subjective. Strongest exit opps for finance roles? Yes. But consulting offers you greater optionality across industry than IB (tech, buy-side, management roles, etc.)
It’s highly biased. He views vanilla PE as the best exit opps when in reality, that’s the only area where banking actually has a leg up. If you want to do almost any other area, consulting is better or equal. Also no top tier strategy shop travels over 50% now. Probably around 10-25% now
@@dhathr you guys act like i said consulting opps are a B- vs. banking A+ while I basically am saying banking is an A+ while consulting is an A. I've seen bankers get pretty much any job I've seen consultants get. Only difference is that it's much harder to break into PE and near impossible to break into a hedge fund from consulting. Both are still really great fields and you will do fine with a top 3 job from either.
Re the travel part, my friend actually didn't mention that so that was a mistake on my end. Thank you for that clarification!
@@rareliquid I'd argue the opposite. Good luck exiting into operations or tech roles from IB. There's no denying that consulting offers a much greater breadth and variety of exit options than IB, it's just that IB has a leg-up in Fin roles (Markets, Hedge funds, PEVC et al). Having said that, folks from MBB (esp. Bain) do get into PE/VC because of the strong competency developed by these 3 in M&A and PE
Maybe I’m biased since I work in consulting but I do think consulting has better exit ops. Yes it’s harder to break into PE but I as well as many of my other consulting friends still got in, you just have a smaller pool, I also know many consultants who got hedge fund offers. I think IB definitely has a leg up in finance jobs but if you look at the entire landscape consulting wins, so if you really wanna go into finance then yeah maybe IB is the right move
Good informative video.
Feedback appreciated.👆
Wanting more info and insight?
WatsApp the numbr above
Endeavor to reach out!!
Juicy stuff - hoping this is your next viral hit 🤪
Thank you very much for video
Thank you for your informative video! I was wondering if you could make an excel shortcut tutorial type video! I loved watching your live model builds and seeing how fast and efficient you are on excel. Thanks and keep up the great contents!
Consulting is life
the best video on IB vs MC on youtube. very well and comprehensively explained💯
thanks you~
@rareliquid. Why would people exit to tech with an MBA if they can go directly
Should be titled banking vs management consulting
Thanks for this, really helpful
Is there a specific type of keyboard used in investment banking? I am in real estate finance for a relative's firm and always searching for ways to improve my efficiency
We do work on Fridays, sometimes until 10😶
I loved the videos about careers, this was amazing ❣ 😎
Thanks as always Paula!
Great vid! As someone who works in MBB I will say the work hours should be closer to ~70 hrs per week. There might be some variations across regions but 50-60 hrs sound surreal.
got it thanks! guess i should’ve said 50-70 because i know there are stretches where consultants do have to work pretty late mon to thurs. does it balances out on a yearly basis to 60 or less though for all that time waiting in between projects? during those times i know most consultants work on internal initiatives but the hours are much less intense
what does buy side mean and why cant consultancy managers enter it? pls help....great vid btw!
Thanks
At bain worked many more hours per week compared to the time spent at Morgan Stanley
Just for some that struggle…
Find your passion if u cant decide based on $$$
Can you also talk about hedge funds?
I'm from Germany: could it be that the consulting industry is totally different in the US? In Germany you can expect to work 50-60 at the Big4, but never at BCG lol... also no German would get into IB only with those internships :(
yeah this video was mainly about US companies
Awesome video dude! I know your backgrounds originally in iBanking, but do you have any recommended TH-camrs that can shed more light on the consulting space?
MBB has quite an easy time entering the buyside. When you look at the number of ex-MBB at MF and MM PE funds versus the number of MBB consultants that are actually interested in finance, the success rate's better than IB.
So are you saying it’s better to got to mbb/consulting then PE?
100% - have seen numerous people do this.
interesting but if MBB to PE isn't it PE opps not deal team? Or can it be deals too?
Love your channel mate! So helpful! I was wondering if you could give me some advice...I want to eventually become a portfolio manager and I am not sure if the best route to become one is through IB first or directly starting in asset management? On a side note, you've discussed in detail the compensations for IB jobs, do you have any insights on how they compare to AM? Thanks!
Hi from Russia, if we are talking about this country, then consultants here also work 70-100 hours a week, like in IB, and sometimes even on weekends)
Is it possible to get into either of these fields in your mid 30s? If yes, would you be starting from scratch (w/ or without an MBA)
Do consultants make more money than a investment banker? (im from Spain 🇪🇦🤙)
Got me set on working in Management Consulting, thanks for the info. Real helpful!
Hello, any advice for young engineers who want to move into consulting? My goal is to get into a reputable consulting firm then apply for MBA.
The consultancy rating is a bit biased by an only American view.
Roland Berger is definetly Tier 2 and probably Tier 1 in Germany and in general really prestigious across Europe.
Feedback appreciated.👆
Wanting more info and insight?
WatsApp the numbr above
Endeavor to reach out!!
So as someone who reneged an IB offer for MBB (starting next year), I do want to say that a lot of these comparison points are no longer accurate. The largest of which is that Covid has eliminated the need to travel every week for consultants, in fact, at least at my MBB no one is traveling every week and that is expected to continue from now on. Additionally, MBB consultants regularly recruit into PE and VC firms. Not so much hedge funds, def still the domain of bankers, but anything in private investing is open from MBB. Lastly, the salary difference is pretty minimal now. Especially if you aren’t in NYC for MBB. The post-tax difference in compensation between me and my BB IB friends in NYC is 15k, which is fairly easily made up by the value of the perks.
thanks for the clarifications here. didn't realize that covid changed consulting for the long run like that. it also didn't come up in my conversation with my friend at BCG (she's still there so i guess it just slipped during our convo). For salary difference, I think it only is similar in the first ~5 years. After that the difference in comp starts to widen.
also for PE and VC (and the latter in particular), I do agree it's not 100% closed off. but just way harder to land a spot where you're running LBO models. i would imagine it's a lot easier to get operational roles at PE firms as a consultant and that's what most go for but lmk if you disagree.
not trying to spread any misinformation so your perspective is helpful. thanks!
@@rareliquid Why should someone care about a career in PE and VC firms? Doesn't seem like they pay substantially more in my region, at least compared to big tech roles
@@eddy-currents prestige, insane bonuses and being the person making the big acquisition decisions from my understanding
with a CPA designation, can i get into consulting? i'm 33 already..what education background do i need to get? i have no financial modeling background
Hello, can you compare the pay? BCG vs JP Morgan
How can Alastair provide up to date training if he last worked in the industry 25yrs ago?
Thank you so much for this video ! Do you have any similar training platform as FinancialEdge for Consulting ?
Great video. It may be good to also discuss exit opportunities between banking and consulting. MBA? VC? Tech?
Well, which one is time consuming? Auditor or Investment Banker?
Hi Ben . Great Content !
Could you please tell me ( or anyone) like what if you are doing a degree not a from a target uni and alongside pursuing ACCA and no previous internship experience , how hard is it to break into an internship from a top tier investment banking institution ? Or is it even possible
well ACCA is for accounting, so it might help marginally for banking, but depends on hoe non-target your uni is as well. are there alumni from your school at top tier banks? if not, it makes it harder. if you are a first or second year i would start networking now, and start building connections. if possible, transfer to a target uni too.
It’s hard. Transfer to Target, get yourself some Mid-Cap M&A internships, then some better M&A internships and afterwards try to get your first IB internship.
Is CFIs FMVA course just as good as the one you recommend??
Why is Wells Fargo or Wells Fargo Clearing not listed in any Tier
Thanks for This Rareliquid, This video has helped me so much will definately share it to my peers. Im now fixed for consulting. Consulting sounds the thing that i want most in life.
It would be great if you can suggest me a youtube channel of a consultant from tier ,2 or 3 company?
kchoi has a great channel!
@@rareliquid Thank you 😊
What's the best way to break into investment banking as a sophomore at a community college? I'm currently applying to the big 4 accounting firms and I'm trying to figure out where else I should focus my efforts when looking for a summer internship. Thanks!
You are going to need to transfer to a solid 4 year university and network your way into IB. At a CC your chances to break into IB are slim to none. I recommend if you are still interested in finance pursue the WM route if you are still at a CC but focus on transfer or getting a good GPA for an MBA
@@PIEDOODLEZ Thanks a bunch. Ill be looking into the WM route
I would say a summer internship during your time at University is essential. Also, perhaps a Masters or MBA programme at a top tier University would be advantageous. They are very expensive however if you manage to get into IB and stay in the industry for multiple years you will pay off those loans in no time due to the lucrative compensations and bonuses.
@@Mauricio-ry8rx Thanks Mauricio. Great advice.
My own path to Nordic top tier IB internship:
High (not top) tier University.
Several internships (Business developer, market analyst) followed by my latest internship at KPMG Corporate Finance (Valuation & Modelling)
Several extracurricular activities such as asset management in finance society and some other associations.
I feel like my internship at KPMG helped a ton for applying to IB so would recommend!
He surely accomplished a lot.
Where can I buy a painting like the one in the video?
Thoughts on the HBO show industry?
I've heard the elite boutique banks (Tier 1B) are becoming preferable to even the top 3 bulge brackets. Can you speak to that at all?
My first me profit of over $ 20,000 and ever since I have been with him
I feel so bad for you getting these comments lol. The reason why boutique banks are now better than MBB’s are due to the Great Recession. MBB’s are heavily regulated and restricted as to what they can and can’t do. By simply making a hedge fund for short / niche trades, an asset management firm for long trades, a VC for think tank financing, a mutual fund for large scale risk managed trades, and private equity for private investing you can skirt these regulations.
Sup BEN!
Hey I need help.. I am interested in both technology and finance. Wanna create a startup in these 2 industries. But I am not able to choose one . Can u help me out with that..
Algorithm comment 😁
And new thumbnails; swit-swoo!
Didn´t stay in any hotel for almost 2 years now...
Which BCG office is your friend at? Here at China 50-60 working hours per week is so rare.......around 70 is the avg
Man’s rly snuck in Deloitte into T2
He really picked Deloitte as an example of top tier consulting
@@dhathr ....? I picked BCG if you watched the video. I compared JPM with BCG based on my friend's experience. Deloitte is not top tier and I know that
Where you get that painting
Your English is perfect. How many years have you stayed in English-speaking countries? Could you make a video about how to improve English and speak like a native speaker? Thank you!
I was born and raised in California!
@@rareliquid No wonder. I thought you were born and raised in Korea before hahaha
Hi thanks for your vid, it’s really useful. It would be great if you could make a investment banking vs quantitative trading/developing vid 😆
I wish i can rewind back my life and get into consulting. But im too far down my career to do a switch :(
Plus im making too much money from solana (THANKS TO YOU BEN!)
Actually, Roland Berger is a tier2 company, especially aggressive in EU and China. And Strategy& is also a tier2. EY Parthenon is getting worse in Asia, I guess.
Feedback appreciated.👆
Wanting more info and insight?
WatsApp the numbr above
Endeavor to reach out!!
Banking = $$ but narrower path
Consulting = $ but more opportunities
Source = me (I have worked full-time as a trader, quant trader, and investment banker. Now work as a Product Manager in tech)
This is a good general answer.
What was your undegrad in?
Engineering !
I would point out to other viewers, that as Rareliquid said in the opening statement, here the focus is on strategy and management consulting.
The advice shifts when you start talking about technology consulting, which was traditionally much smaller but has been growing at a far larger rate than management and strategy (both of which are seeing declines in many areas)
Does cfa certification provide job in foreign countries
auto - bankGPT + Langchain + btc/eth has this sector done.
Just a correction, buy side also heavily recruits MBBs, especially from Bain.
Should've clarified i meant more that consultants don't get hired for PE deal team positions because they haven't learned how to model like bankers which is essential for an investor position. Yes, MBB does lead to operational PE roles but when I say "buy side" I'm really focused on the investor roles. May sound like a small difference but the role differences of deal team vs. operational are pretty significant. Spoke with my friend at BCG who worked at Silver Lake (top PE firm) who left in part because she felt like she was a marginal member of the team rather than a core part of it. Most PE firms fill a small % of their roles with ex-consultants to help operate their portfolio companies. Only firm where I may not expect this to be the case is Bain Capital which is probably run a bit differently given its ties with Bain. Hope this helps clarify! Sometimes I can't get to every detail in a video but this one I should've made more clear.
@@rareliquid To my understanding this is not fully true as many firms with operational strategies are open to hiring MBB consultants to the deal team. Yes banking does open more doors to more funds but if you're at any MBB you can get PE deal team interviews, it's up to you to get the offers however.
@@andrewzhu6155 sure it's not 100% closed off but i would say if you want to go to the buy side you don't go to MBB you go into banking. Building LBOs / modeling is a huge part of being a core part of the deal team and it's possible at some PE shops to be on the deal team from MBB but it's pretty uncommon. That said, I think MBB consultants are smarter than the average Goldman / MS / JPM banker so it's not a matter of intelligence IMO but just practice / experience working on transactions
@@rareliquid how do i go from ER analyst at an activist asset management firm ($25 b USD) to PE
@@andrewzhu6155 Backing this up as a MBBer. Hires to PE deal teams are not uncommon. While you see exponentially more PE associates coming from banking, almost everyone in IB is looking to make that transition to the buy-side, which is not true for MBB. Getting in front of PE firms for interviews is not overtly difficult from MBB, but like Andrew said, receiving an offer could be considered harder because of a lack of modeling skills.
How is Wesleyan University for Investment Banking?
what is deloittes strategy arm?
hi! would you say that its hard to move from one industry into IB or management consulting? Like lets say youre under corporate banking and handle institutional loans?
No that’s really simple. In consulting, industry background makes you valuable for projects in the industry you are from. Same accounts for banking, but not as much.
very easy to do that. just spend 200,000 USD on top 10 MBA. the worst case scenario you get into mediocre IB or consulting firms. This in fact is what a lot of people do if they aren't competitive enough straight outta undergrad.
6:10 most important part of a company's career
What about ZS, it's tier?
Go consulting u will work with all banks
And HSBC ?
"Except for the buy side" are you kidding? Most VCs recruit from mbb ...
Can i switch from investment banking to management consulting after say like 2-3 years
I am fixated by your $32 dollar frame in the background.
Are weekends off in investment banking and management consulting?
IB Nope, MC depends on where u work and the project. In Germany at MBB its off