I’m a graduate of Oxford University and I studied a mathematical subject. Like a lot of my peers with an interest in finance, I faced a fairly straightforward choice of trying to break into investment banking or go for a career in consulting.
2014 was my final year and after a lot of work throughout my studies – multiple internships, joining the right society and copious networking – I was in the fortunate position of having two offers. One in the M&A division of a bulge bracket investment bank, the other an entry-level consultant role at a ‘big three’ strategy consultancy.
It wasn’t an easy choice; I’d spent much of my university years trying to gain as much experience as possible in investment banking. I’d jumped through the right hoops and beaten a lot of competition to get the offer in M&A. But I chooe consulting.
One year on and I have no regrets. This is why.
1. Consultants enjoy what they do, bankers do not
Consultants are problem-solvers, they are drafted into companies at a period of structural change and it’s a very cerebral job. A lot of consultants find this genuinely invigorating. Throughout the interview process this was obvious to me and so far it’s proved to be the case.
Bankers, by contrast, were in the game for what they could get back. Banking is all about returns, whether that’s financial gain or career opportunities. A lot of my fellow interns were planning on using their banking job as a boost to their CV before moving on. It’s all very transactional.
I decided that making an impact is more important to me. Most days, I go home feeling like I’ve achieved something.
2. It’s a much better environment
It’s no secret that investment banking demands long hours or that the job security isn’t great. The culture in consulting genuinely has greater career sustainability. The work is similarly, if not more, stretching than investment banking.
There are always discussions internally about why we’re working in consulting rather than banking – we get paid less, but there’s a better work-life balance. Yes, you work on a weekend or late into the night but it’s seen as something that should be an exception. At least your efforts are recognized – working nights is expected in banking.
Consulting is also less volatile. Consulting fees are less at risk than in banking where the fear of missing out on a big deal drives senior managers to push their teams relentlessly. Failing to work a weekend on a pitch is unlikely to lead to tens of millions in losses in consulting. More growth, less regulation and private management combine to support a deeper focus on people and an easier going vibe at the consulting firms.
3. The work is much more interesting
Investment banking is a steep learning curve, but consulting offers something different.
Firstly, you can travel – all the big strategy consultancies are global, you get client interaction from the outset and experience a diverse range of cultures early in your career. Then there’s the fact that the projects span across business functions and capabilities – as much as I enjoyed finance, it’s not where I wanted to lock myself in so early.
When I was interning in a City investment bank, most people were either at Oxford, Cambridge or London School of Economics and were studying finance. Banks recruit the same types of people. So far in consulting I've worked with former teachers, soldiers, surgeons, athletes, pilots and even bankers, from all over the world.
You can work in different industries. In a fairly short period of time, I’ve worked in financial services, transport, retail and government, for instance.
Banking is varied when you enter, but even this varies by team. You wouldn’t get much industry diversity if you ended up in healthcare M&A, for example. If you know what you want to do from the outset then banking is ideal. But I wanted to keep my options open.
4. There are more exit options
To be honest, attrition is just as high for consultants in their early years as it is for bankers. Average entry level tenure is 2-3 years across most firms, but I’m not worried by this. Consultants can work for any company in almost any capacity and the brand recognition of working for a big firm really opens doors.
There’s one compromise I’ve had to make for consulting – pay. It still grates that I’m taking home 30-50% less than if I’d accepted the job in M&A, but it was a compromise. Consider this carefully – if money is still your main motivator, then banking wins out.
The author is currently working for a large management consultant in the City of London. James Smith is a pseudonym.