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Alternative jobs for investment bankers (and their pay)

Senior investment banking jobs are making a comeback, but there are still people out of the market. What, therefore, can you do if you were in corporate finance/M&A and want to do something totally different?

1) Non-executive directorships

Becoming a Non-Executive Director (NED) is a definite possibility, but only if you were an MD or equivalent, says Barry Dinan at NED headhunters Hanson Green.

“There’s demand for NEDs with investment banking experience, both in smaller companies that are seeking to grow by acquisition and in companies where knowledge of the City is lacking,” says Dinan. “It can be very easy to move into.”

Pay: Around 40k per role. And Dinan says you could manage “four or five.”

2). Corporate strategizing

Former investment bankers have also been known to get jobs in corporate development (internal M&A) or corporate strategy (strategizing for the future).

Last month, Dell let it be known that it’s looking for someone to work internally on M&A. Longer ago, Warren Finegold, a former technology banker at UBS, famously joined Vodafone, a client, as head of global corporate development in 2006.

However, corporate development roles tend to go to senior M&A bankers and opportunities are limited. “The market for corporate developers has substantially subsided,” says Ben Jones, Head of the CFO Practice at search firm Whitehead Mann. “Companies are less willing to deploy money into new investments until they have more confidence in the economy.”

Alternatively, corporate strategy and market intelligence roles pay less but are easier to come by as companies seek to shape the future and keep tabs on competitors.

“There’s a need for independent thinkers with the academic rigour to really get to grips with a sector,” says Julia Hordle of recruitment firm Intelligent Resources.

Pay: Senior roles in corporate strategy can pay 150k up. Junior roles in market intelligence pay 30k up. “The people who find their way to us have often had a shock, like being let go, and who want to get off the transaction treadmill,” says Hordle.

3). Strategy consulting

Strategy consulting firms like Bain & Co. and McKinsey & Co operate financial services arms and may be interested in your talents. Nick Studer, global head of finance and risk in the financial services team at consultants Mercer Oliver Wyman, says they’ve got lots of former investment bankers working there.

It’s easiest to move across when you’re comparatively junior, says Studer. “Investment banking and analytical roles both require analytical skills, but our job involves much longer and deeper penetration into the clients’ problems and junior folks can typically learn that more quickly.”

Pay: An associate at McKinsey (usually someone with around five years’ work experience or an MBA) earns a base salary of around 70k, plus a bonus of around 20%.

4). The not for profit sector

There also appear to be opportunities for ex-investment bankers in charities. Richard Evans, chief executive of not for profit headhunters CFA Appointments, says they are “actively sourcing” ex-M&A/corporate finance types for roles as finance directors, directors of finance and administration, directors of operations or chief executives, as well as for trustee positions. However, he adds that there can be questions over former bankers’ commitment to a not for profit career.

James Campion at recruiters Michael Page, says investment bankers will find it easiest to move into the housing sector: “Their skills are most transferable into development finance roles.”

Pay: Varies. Charity trustees typically earn nothing. The largest charities will pay six figures for senior roles. Smaller ones will pay 60k plus.

Comments (29)

Comments
  1. Everything you’ve just stated pays less than what a 23 year old banker gets. All this “corporate strategy” mumbo jumbo is simply not worth the time or effort.

  2. Henry that is the issue .. the concept of what a 23 year old banker should get paid is so whack out of reality it is not funny … !!

  3. Henry clearly doesn’t know what he’s talking about. I’m surprised he’s managed to type two complete sentences without any errors this time. Fortunately he will be laid off soon enough.

  4. How much do you make Sarah?

  5. Henry your comments are getting very tired. Seriously, have you not got somewhere else to be?

  6. How much are the 23 years olds being paid in IB?

  7. Steve, no. Unfortunately Sickipedia and FmyLife are now banned here so I need more good websites to browse whilst getting paid 4 figures a day to do next to nothing. Any suggestions welcome.

  8. @Shax – I am paid more than a nun, less than the Pope.
    @ Rachael – they’ll be getting 40k sterling salary, plus a bonus, probably 10-15k this year realistically??

    Sarah, Editor, eFinancialCareers Reply
     
  9. Henry,
    Don’t listen to those nay-sayers. I am completely with you on this: Non-executive directorships are so bourgeois.
    Sarah should totally start writing articles about how to become an NBA basketball player instead –I hear it’s much more lucrative. Where do we sign up?

  10. What about “Burger Flipper” ?

  11. FYI – Not sure about the pay and bennies etc but I can confirm that most established chains throw in a triple-decker (cheese or other toppings, you pay for) and a medium-size soda for free.
    Hmmmm….. food for thought….

  12. I thought Non Exec directors had to be blind and be accompanied by two monkeys, one covering its mouth, the other, its ears…..

  13. this whole website is tedious. why do you all have to be so cliched and stereotypes? grow up

    boredofyoursort Reply
     
  14. You could have included business angel in the NED section, although that takes investing your own money, but yes often early stage companies need experienced mentors for whom city experience is highly valued.
    Being actively involved in helping grow a company is far more rewarding than being a glorified salesman in an IB.

  15. 23 year-old banker?

    Something wrong with that statement.

  16. I know a hedge fund quant boffin who has went into computer games (though he did have a Comp Sci bachelors). Similar stuff, fancy algos, real time, lots of screens although less money.

  17. I’m sorry, but all the slating that Henry gets is unfair. Particularly in this case. He asks a valid question: why WOULD anyone want to work long, long hours, in boring conditions (hear-a-pin-drop-office, full of jumped up higher degree clever clogs) for the equivalent comp of a bank junior (talking markets here) ?

    It perplexes me. Whilst we all appreciate that IB comp is too high, at all levels, this doesn’t make Henry wrong, or a fair recipient of the comments posted from high horses above.

    “boredofyoursort”, managing to use the terms “tedious”, “cliched” and “stereotype”, all within an 18 word post is some achievement. It’s just a shame you don’t see hilarious the irony of your name!

    Roll on 2010.

  18. Sarah, do you think 55K is too low for a 26yr old doing back office, btw just 2.8yrs experience.

    I know Henry is going to take the mickey out of this, but look at you fingers to see how unequal they are, before you put them on those keyboard of yours.

  19. Hang on, five years at Mckinsey and you’re only on 70k + 20% bonus? How accurate is that? Surely not, considering Mckinsey consultants are reputed to work as many hours as investment bankers…. why would you do so for such a relatively meagre salary?!

  20. 55k for a 26yo is utterly pathetic. What have you been doing with your life? Most 26yos I know are almost millionaires with MASSIVE properties. Clearly you didn’t work hard enough at school so have had to get an Operations job.

  21. As someone who has 10+ years of experience in bulge bracket IB and has reached a reasonable level, I am shocked by some of the juvenile and frankly distateful comments posted here by some clearly very junior people talking out their rear ends. I suspect these people will last another year or two until their inability to act like adults finally gets them booted out

  22. Derek you are wrong and you are also something else which if write here will be deleted by the editors. Homer, yes it is too low, in fact most MO jobs used to pay more base that FO , given the massive difference in bonus. It is nowdays a different story and your bank will tell you that your are lucky to have a job, so stop complaining. Very sinmply if you dont move from the sust that is the MO you should not expect to become a millionaire, if thats fine with you then stay where you are and enjoy better lifestyle. I am quess youleave the office aroun 5.30pm. Now trust from this to leaving at 9pm is a massive difference in terms of quality of life.

  23. I worked 5 years in one of the strategy firms mentioned in the article. To answer some questions: many of us do it for the professional development and the relative prestige, and hope it’ll help for future real jobs (it usually does). Personally, I believe Henry is right this time: with hindsight, I should have gone into banking and make serious money for a narrower development.

  24. Derek, has just proved in needs to visit specsavers…i said “2.8yrs i.e 2years and 8months, if you need spellin out.

  25. Back Office, yes I saw that. What’s your point? Earning just 55k after 2yrs and 8 months is just a joke. For us in the front office the all-in pay MORE THAN TRIPLES in that time! Oh and 2.8 years is not 2yrs 8mths, its 2yrs 9.6mths.

  26. Banking is a hellhole. Those of us who have left realize that most people in other industries have no respect for our “skills.” The mediocre bankers stick around in their huge, soulless, poorly managed mega-corporations, while the truly talented ones either start their own funds or become entrepreneurs. The vast majority are useless and have nothing to offer any other employer. I wouldn’t hire 95% of my former colleagues as unpaid interns.

    Derek and Henry I truly hope you’re just internet jokers and you don’t actually believe your own nonsense.

  27. Shax you are making a bad decision of asking about pay again! Like last time when you tried to sneak your way into an apartment, i recommend you keep this to yourself in future!

  28. Henry

    Clearly you’re mistaking me for someone else. So far I had not been kicking your behind like everyone else, but if you insist I could join the fray.

    I was flirting with Sarah! Are you jealous?

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