Want higher pay? Choose banking
Want job security? Choose consulting
Want weekends off? Choose consulting
Want less travel? Choose banking
Want to use your numerical skills? Choose banking
Want a non-hierarchical culture? Choose consulting
Want job prospects? Choose consulting
Want to work with interesting people? Choose consulting. Want intelligent people? Choose banking
Investment banking and strategy consulting oddly have similarities, both industries attract the overachievers. Both pay very well. Both require a lot of commitment and time, with impressive academic achievements needed to succeed in the career.
Despite these similarities, both of distinct differences. What goes well for one person may not work well for the other. An article by eFinancial careers discusses what industry is right for you. Here are the best bits.
If you want higher pay, choose banking
If you want money, you probably want to work in banking, front office banking careers are generally a lot more lucrative than careers in consulting, in the first 20 years at least.
While the pay in banking is plateauing, he says compensation at places like McKinsey only really kicks in at the senior partner level. if you look at the median compensation of consultants with 15 years’ experience against bankers on a similar level, consultants tend to always come out on top.
Job security? Choose consulting
If you’re looking to have a 15-20 year career in either banking or consulting, You have a much higher chance of getting this in consulting than banking.
By comparison, all banks are under pressure to cut costs and heads. In the five years following 2008, American banks and insurers slashed 400,000 jobs according to the U.S. census.
Banking, therefore, looks like the more risky career option – you might get paid more to start with, but it might not last.
You want weekends off? Choose consulting
Most people would agree that consultants generally have a better life than bankers.
Like banks, consultancy firms are alert to the long hour’s problem. Boston Consulting Group has been implementing a policy known as ‘Predictable time off’ for years. Through this, consultants at the firm are assigned ‘predictable periods’ of downtime at the start of a project. During these periods, BCG consultants are required to be off completely – they can’t check their emails or voicemails. Meanwhile, McKinsey & Co introduced flexible work programmes a few years ago – employees there can now take blocks of unpaid leave between projects, work three or four days a week, or take a leave of absence for up to a year.
Do you want less travel? Choose banking
Everyone agrees that the big downer about consulting is the travel. If you work in banking you’ll commute in and out of your office on Wall Street, in New Jersey, or in the City of London every day. Yes, you might have to do a lot of travelling if you’re in a senior client-facing position, but if you’re a junior M&A banker or a trader you’ll mostly be glued to your screen in the same place.
More job prospects? Choose consulting
What happens when you want to move on from consulting or banking?
If you work in consulting, you can always go off and become a senior executive in the sector you’ve been consulting in. McKinsey says 450 of its former consultants are currently running ‘billion-dollar organizations’ around the world. They include Tidjane Thiam, the new CEO of Credit Suisse and James Gorman at Morgan Stanley.
By comparison, swapping out of banking can be more of a challenge. The best people from investment banking go into private equity or event-driven hedge funds. Sometimes they go into corporates to work for ‘in-house deal teams.’ But there are often more people who want to leave banking than there are places for them.
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