So your kid wants to be an IB?

Parents Forum
21

Thanks @Data10. I read that report, and it sounds like pure misery. What I am hearing is that there have been similar problems with excess work at other IB shops, although GS seems to have been the worst case.

When I was young, I could do 60 hours per week continuously, 80 hours per week for short periods, and every hour beyond that is exponentially worse. I personally could not imagine 100 hours per week.

GS needs to get its house in order quickly or they could lose a couple of years of talent as a result.

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22

Funny, my experience at Big Law and then bulge bracket IB led me to nudge my S to IB/Consulting after college. Money is better (but riskier/more volatile) and hours the same. Also don’t need 3 years of law school paying huge $ and making $0. A 2 year analyst program gives you a chance to gain a lot of experience and exposure. Whether you get offered an associate position or decide to get an MBA (or even a JD), go PE/VC/hedge fund/main street is 2 years down the road and all viable options. Going to law school upfront means a 3 year commitment with a relatively narrower path at least initially unless you want to go out of law, and then why did you blow the time and money on an expensive law degree?

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23

I dunno. My oldest has been in IB for 4 years and didn’t experience the misery in the study. However, he went into it with his eyes on the prize, and has a definite career path in mind, that he is pursuing. I guess he went into it with his eyes open, so wasn’t shocked or disappointed.

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24

My typical work week at GS as a 1st/2nd year banking associate when dinosaurs roamed the earth was 8am-Midnight M-F; 8am-4pm Saturday; 4pm-Midnight Sunday. I had served in the military before so that kind of schedule didn’t throw me that much, but it was a long two years. Did get to travel some, so that broke things up.

To me, the biggest change is the immediacy of email/mobile devices. In my time, to get a senior banker to review something, you had to get it printed by word processing, put it in a red rope folder, send it via a car service to their apartment/house and wait for them to call you. Time for a cup of coffee and a deep breath in between all those steps. Now, it’s email the PDF or PowerPoint and two minutes later you are getting that call. Plus the expectation that you respond to everything immediately since you have access to it.

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25

Yes and cell phones.

26

Your experience shows that the environment at GS hasn’t really changed, just the expectations of this generation or atleast 13 of them :wink:

27

I’m sure there are many major differences in the environment, but the reported hours are near identical. HazeGrey reported 96 hours per week. The survey reported an average of 98 hours per week. That does not leave much time for anything else.

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28

Working on the trading side of banks or in hedge funds (and other buy-side firms) generally provides a better lifestyle, even though the work may be more intense during working hours.

I, too, think junior law associates have the worse lifestyle. It’s about who-pays-whom. Security law firms are generally (but not always) paid a fee by the banks, so the banks are their clients and they must do what their clients demand. A similar relationship exist between the banks and their institutional clients. PMs, and particularly traders, are in a different business and don’t need to constantly respond to their clients.

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29

So true, different economics between being paid by the hour vs paid by the transaction. One of my best friends/NYC roommate transferred from IB to trading after a couple of years. Less/no all nighters but very intense days.

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30

One perspective
a comment on linked.in responding to the article:

Money and success is the driver. I spent 21 years in that Industry. It was non stop work and amazing. I saw the world, met thousands and formed global relationships second to none. Then I retired wealthy at 45. People always used to say why do you work so hard? My response was ‘why don’t you?’ Now I listen to people complain they have to work so many years and so long and on and on. It sums up like this. Do you want to work 40 hours a week for 40 years? Or 80 hours a week for 20 years? That’s a bit of a simplification but pretty easy to understand the math. Goldman is the Mecca in this industry. They are the best at what they do and should not change a thing. There will always be people willing to actually put in the work for the rewards that can follow.

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31

Wonder how things will move forward re: travel, client interaction in the face of changing border regulations.

32

IB isn’t what it used to be. But it is what it is.

I worked in “bulge bracket” IB firms before and after business school and wouldn’t trade the experience for anything. Obviously, the “bulge bracket” vocabulary dates me, but quite frankly in the 1980-90s, what other career paths available to recent graduates of college and business schools that offered the exposure, excitement and compensation as IB? Make no mistake, careers in IB are hard work and the competition is intense. But isn’t that those who pursue it are signing up for?

Pre-MBA, I worked in banking and was a junior person (analyst) on a very active team. I was the low man on the totem pole, worked my ass off, learned a ton and met a lot of interesting/important people. By no means was life ice cream and cake, the job pushed me and others to the limit, but the experience did get me into a top MBA program. As a very junior person, much of the work was mundane, but always time-sensitive and high pressure. Because of the lack of technology during this period, there was a lot of proofreading, creating graphics, waiting, messengering in addition to all the actual work. With technology today, being the low man on the totem pole an analyst could be more productive, but this could be a bad thing from a lifestyle perspective.

Post-MBA, I worked on the trading and origination side at a top IB. This was during the infancy of asset securitization and the birth of financial engineering. The best part of this was many things I worked on had never been done before, so seniority was not as important as results. This is one of the great advantages of being in IB and on the trading side of the business. As someone else on this thread said, the trading side has better hours, but greater intensity and I found this to be true. Over the years, however, improvements in financial technology had drained much of the profitability from the markets I was involved with. I am grateful to have retired from the IB industry (over 20 years ago).

The interesting thing about IB during this era was that, despite the competition, stress, sacrifices, etc. it was a great experience that gives one perspectives and contacts than would be very difficult to obtain in other fields. Much of my identity was formed by my years in the IB industry and it is unlikely I could do what I do now (run an investment management company) without that experience. That being said, the IB industry has a high-rate burnouts/turnover, things don’t work out for everyone and as with all things luck can play a role.

My advice to anyone contemplating going into IB is to try to ride one wave of innovation, and then consider your options. In my case it was (asset-backed securities) for 15 years and then I left. The business had started to become commoditized and when profitability falls, the politics can be awful.

The problem with trying to ride more than one wave it that when you paddle out for the next wave, a total wipe out is always a possibility. I think the people who do not have favorable things to say about IB are often those whose wave never came (and they left), or those who stayed too long and experienced a serious wipeout (2008 GFC, 2000 tech bubble burst, Black Monday, internal politics, etc.). That being said, it is always better to leave IB by your own decision than to have that decision made for you.

Today, things are much different as recent college and business school grads have more options, especially, with the technology companies. It is worth noting that even though my wife and I both had decent IB careers in NYC, we couldn’t get our kids to consider it.

The workload and lifestyle stereotypes in IB are well-known and the jobs in the tech industry offer more flexible lifestyles, interesting/cutting edge work, and most importantly equity compensation as soon as your start. When our oldest graduated college two years ago (from an HYP), he talked to all the tech firms and also did talk to some IB out of curiosity. He received an offer from a top IB that was not competitive with anything from the top tech companies. He was told the IB would match a FAANG type offer, but he had to say he would accept the offer if it was made (typical GS). Instead, he pursued a tech career in Seattle and the stock his company has doubled since he has been there.

In some ways I think it is great the college grads have more industries to consider when they graduate. We tried to convince our older to apply to B-School and take the GMAT before graduating, but there was no interest. After working for two years and the stock grants that come, the opportunity costs of leaving for two years (missing salary, stock grants and promotions) while paying $175K for Harvard, Stanford or Wharton are quite high.

In my day, an IB career required (as did PE/VC/consulting) an undergrad to ultimately pursue an MBA. Is that still the case? At today’s prices, that is the big decision.

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33

A lot of kids are interested in IB because it is one of the most highly selective jobs kids on their campus pursue and there is prestige in getting one of these jobs. They are on campuses filled with kids who have been jockeying most of their lives to be selected for the most highly selective options. This is how they judge each other and themselves. It’s the Excellent Sheep syndrome. And to be fair to the kids, this is the water they’ve been swimming in so it’s hard to have perspective. It’s not surprising that they don’t fully understand what they are signing up for and/or realize that the actual work holds little intellectual appeal to them.

If it weren’t for covid, the analysts would at least have each other’s company to make the long hours tolerable. But now it’s just the work, and it is often tedious. And there’s tons of it. In a transaction business, you do your work to fit into the timeline of the deal, and your firm is rarely the one setting that. So when there’s work to be done, you do it.

IB firms like to hire kids who demonstrated they could get a lot done in a day. And most of those kids were involved in things on campus, like sports, their frats, etc. Living this mono-activity life is a really tough adjustment, and often one that is at odds with who they fundamentally are.

The upside – good pay (and no timeto spend it), good path to the next job, good connections in the financial world, and in a non-covid world, like-minded colleagues.

I think it’s good that at least some people are talking about it, but I also doubt there will be major changes. As long as kids want the bragging rights of having landed these jobs, GS and their brethren will have an exploitable work force. It’s worked for them for decades - why stop now?

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34

Because now bragging rights go to those with tech company offers.

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35

For undergrads coming out of college to work in tech, their lifestyles aren’t necessarily better. They also have to work long hours and their skill sets are, not currently as easily, but ultimately readily replaceable. The difference right now is that they’re more in demand as their industry, unlike finance, is still growing. Once the growth slows, they’ll need more specialized skills to differentiate themselves.

36

I have not seen any company in the computing industry where 80+ hours per week every week was the norm like it supposedly is in investment banking.

Specialization can be risky if your specialty ends up shrinking and then you find yourself subject to seniority discrimination when looking for a new job. Basically, you have to guess which specialty will be growing and shift to it while still employed (of course, it helps if your employer is in that space), since doing so within an employer is more likely to happen than trying to get hired before you have experience in it.

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37

Hours vary from company to company. Longer hours are more common in subsectors that are more competitive (the tech industry has become an oligopoly with more limited competitions, however). 80+ hours aren’t the norm either across the entire financial serivces sector.

Someone with only specialized skill would obviously be at a disadvantage if and when such skill become less in demand. To have longevity in any competitve and creative industry, one needs the breadth of general skill set and the depth in some specialized skills.

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Most employers appear to hire senior level employees from outside based only on desired specialized skills, not strength of general skills (though there are a few exceptions). Strength of general skills is most likely to be considered for entry-level or junior level hires. Strength of general skills is valuable for senior employees in enabling learning and moving into new specialties within their current employers. Obviously, longevity depends on moving into specialties that do not go away faster than you can get good in them (but sometimes one does not know how long the new up-and-coming specialty will last).

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One of the “general” skills is having the background and the ability to be able to pick up a new specialized skill when needed.

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40

Yes, and it is necessary to do that during one’s employment at the current employer, if your current specialty is shrinking or a new specialty looks worth getting into. When you are an outsider seeking a job at a new employer, most new employers tend to discount such ability to learn something new when needed and focus only on what you currently know and have done recently.