Top Five Career Choices After Investment Banking
A career in the field of investment banking typically requires some serious sacrifices — especially when you’re first starting out. There is a payoff at the end of the road, however. After all those long and extremely taxing work hours — and a year or two spent doing less than glamorous tasks as a junior employee — those in the investment banking field typically enjoy some of the highest salaries and bonuses in any industry.
There’s also another benefit that’s just as valuable: The ability to exit investment banking and launch a secondary and perhaps even more rewarding career.
With that in mind, let’s take a closer look at the top five career choices after investment banking.
There’s a reason why Silicon Valley is the only real competition for Wall Street when it comes to securing the very best talent. Namely, the salaries and benefits are potentially just as rich if not richer. Silicon Valley firms are also famous for pushing a “let’s improve the world with our product” philosophy that’s attractive to idealistic workers — and perhaps those coming from a strictly profit-motivated background in finance.
If you’re interested in making the move to Silicon Valley, FinTech (Financial Technology) is the logical choice. A finance background is an obvious plus and, even more importantly, FinTech is growing at a staggering rate. The global FinTech investment market is projected to grow by nearly 55-percent between now and 2020.
This combination of growth potential — and a banker’s existing expertise and skill set — make FinTech a great exit option.
OK, so a move into PE doesn’t offer the same kind of change you’d experience by moving into the tech field, and you’ll be dealing with many of the same career pros and cons. Yet private equity is a natural next step for the best and brightest investment bankers.
And it’s a great time to make the transition, with PE dollars cresting to historic levels. In the last 20 years, total PE assets under management have grown from $30 billion to $4 trillion. This means there is a ton of opportunity here for smart investment bankers looking to make a switch. It’s important to realize, however, that PE firms want elite performers — and they are willing to recruit them earlier in their banking career than ever before.
A move into consulting is another logical choice for bankers seeking a career change. Bankers and consultants tend to have a lot in common from a personality and career ambition standpoint. There is also considerable crossover in terms of educational background and other attributes.
A move into consulting can be exciting because it allows former bankers to develop new skills while deploying their existing skill set in a strategic context. You should note, however, that the pay in consulting isn’t quite as generous and the travel can be much more onerous.
Moving from an investment bank to a corporate advisory role is one of the more common exit paths. On the plus side, the hours are likely much less demanding and you’ll play a critical role in helping an organization grow.
Some bankers, however, may not like the slower pace and the considerably reduced compensation. Late career bankers with a lot of expertise who are seeking something less taxing, on the other hand, are perfect candidates.
Investment banking experience is a significant plus for a hedge fund career, as bankers understand the core financial concepts involved and are used to tough hours. The hedge fund field is incredibly competitive however, and those who perform poorly can wash out incredibly quickly. Everything is tied to creating alpha. If you can’t perform at a high level consistently, your hedge fund career may be a short one.
If you’re a top performer, however, the financial rewards are enormous.
A career in investment banking is often the gateway to an equally rewarding secondary career path. When you feel you’re ready to move, consider smart options such as those listed above.