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Would you be better off with the Big Four?

As anyone with a passing relationship with reality knows, investment banks are in the process of unloading many of the staff they acquired over the past five years. Accountancy firms, however, are still a) hiring, and b) making money.

Last week, Deloitte said revenues will be up 11% this year, thanks to all the ‘downturn work’ (Financial Times). And analysis by Accountancy Age suggests that while investment banks’ corporate finance revenues are falling off a cliff, combined revenues at the Big Four have been growing at a rate of 13%.

Combine this with the fact that Grant Thornton is busy raising cash to help pay extra wages as it battles for market share (Accountancy Age), and it all looks rather promising.

But looks are deceiving. Accounting firms are doing a little hacking of their own – KPMG has sliced 90 corporate financiers, and the Big Four have a history of nastiness almost equal to banks’. KPMG (again) is said to have made 700 staff redundant by email in 2001 (FT).

Keith Dugdale, global head of recruitment at KPMG, says there are “small numbers being let go, but nothing on the scale that banks are experiencing.

“On the whole, we want to hang onto people,” he adds. “Corporate finance may be going down, but areas like corporate recovery and forensic are countercyclical and we’d rather redeploy people internally than let them go.”

Brendan Collins, head of HR at Mazars, which ranked 12th among UK accounting firms last year, says there are no plans for redundancies, but they’re not hiring any more corporate financiers. “We are still hiring for audit, recovery, business and tax, however,” he assures us.

Comments (18)

Comments
  1. BIG 4 – yr1 28k, yr2 30k, yr3 33k, yr4 60k, yr5 70k = 0.2m

    FRONT OFFICE IB – yr1 80k, yr2 150k, yr3 200k, yr4 275k, yr5 350k = 1.05m.

    Hmm, that’s a tough one!

  2. Or: BIG 4 – yr1 28k, yr2 30k, yr3 33k, yr4 60k, yr5 70k = 0.2m

    FRONT OFFICE IB – yr1 80k, yr2 150k, yr3 whatever I can get from efinancialcareers.com for writing a weekly diary about being unemployed.

    – I think was the point of the article Henners.

    p.s. shouldn’t it have been “big 4” in small caps vs. “FRONT OFFICE IB” to emphasise your IB alpha maleness?

    secretary to the chief junior internal auditor Reply
     
  3. Yeah great Henry, unfortunately for the majority of new entrants and many recently released staff, the second line of employment you listed does not exist any more, at least for the next few years anyway.

    The fact is that for the people who don’t have a job, most still won’t have one for a fair while yet. This article is obviously written in a climate where just GETTING a job is the real challenge.

  4. it’s a good shelter under current headwinds. stay at least 2 yrs b4 the mkt picks up again 2010 as hoped

  5. Yeah totally Peter, if you’re not good enough to get into IB, go to the Big 4. No matter if bull or bear market, this always happens. The Big 4 attracts a significantly inferior calibre to front office counterparts – typically with just ABB A-Levels and a degree from a generic red-brick and limited experience, compared to the top notch IB peers. If you’re good, then no matter what the markets are like, 1m gross in your first 5 years is a totally achievable target. If you can’t cut it, then the Big 4 may indeed be what you have to resort to instead.

  6. For someone as uber-successful as Henry here purports to be, it is interesting that he can find the time to comment on every article that appears on efinancial. Get a job Henry.

  7. I am writing every post from a top investment bank. Ask eFN’s IT guys if you don’t believe that. In my job, I have ample time to do what I want over the days whilst still making an enormous P&L. The attitudes of some people on this site, that working hard to get a string of pointless qualifications, or being chained to your desk on Excel 100 hours a week with no procrastination will lead to career success, are utterly dumbfounded, and if you actually make it into front office IB you’ll see what I’m talking about. P&L and “working hard” are poorly correlated, and being likeable by the people that matters is more fundamental. I am literally one of the most successful people my age in the City, and it hasn’t been through spending every hour of the day working solidly.

  8. Mint, I don’t spend any time surfing the recruitment section of this site, I just have news.efinancialcareers.co.uk in my bookmarks. I like reading the articles here, and moreover am most entertained the comments following them, a bunch of failures suggesting stated salary/bonus numbers are mythical / exaggerated when they are most certainly not, self-deluded types not good enough for the front office with no hope in hell of success, and jealous losers.

  9. Henry lets just cut to the chase – how big is it?

    Henry the third (inch) Reply
     
  10. Doesn’t seem enormous vs the surveys / ‘statistics’ I’ve seen, but many girls I’ve been with say its the biggest they’ve ever seen. Pretty fly for a white guy ;-)

  11. Henry is leaving out partner earnings at the big 4 which are not bad at all, a decent tax partner will be bringing in 1m a year. Sure this is less in nominal terms than a front office high flyer but in risk adjusted terms it generally outperforms

  12. DCB – true but for the pain of being a tax accountant 1m does not get close to fair compensation. Forever a geek…..

  13. DCB, you’re absolutely right, and being on 1m/yr in one’s 30s would be far from shoddy. However, its so painful to get up there, in your 20s when all your IB friends are on a healthy 6 figures, you’re still clawing your way up on rubbish 50k newly qualified salaries. The Big 4 is far too much of a sacrifice in your early 20s, which should be the best time of your life if you have money to spend on plush apartments, fast cars and faster women, instead you’ll have a crap first few years all for a comfortable life like everyone else a decade down the line.

  14. Henry – what car do you drive?

  15. Must be driving a Ferrari or something like it but then in that Ferrari sits an arrogant, self-proclaimed success at a bank which probably has fired him long back and he is still living the F.O. life…Oh Henry, I meant Front office life. But I do agree with you that Big 4 is not the answer to a bank. In fact, both of them are world’s apart in terms of the work they do. So people, find a job that you will love going to and you wouldn’t mind working your ass not just for the money but for the thrill of the job or the security it gives (whatever rings a bell for you).

    I love trading and can do that all day long and I hate losing money but it happens at times, so its not that there is money all the time but I trade for the love of it and yeah that gets me my FAST cars, FASTER women and what not…I bet Lakshmi Mittal or Bill Gates have them too. So Henry my friend, no big deal, you still got a big mouth but that’s understandable for a newly successful young lad, wait when the tide turns against you….and you bet it will, it sure will!

    Been there done that Reply
     
  16. Well said Been there done that yesterday. Henry’s ‘luck’ will run out very soon or perhaps it has and that is why he is addicted to a recruitment website. Is it really all about money investment *anker?

  17. The salaries Henry mentions are those that he aspired to achieve not what we have seen or will see in the future. Analyst 1 (M&A) at bulge brackets never received 80k…even at the top of the market. If you are in trading, perhaps 80k was possible…but forecasting out to year 5 is just wishful thinking because this year bonuses have been 0…if you were fortunate enough to still have a job! Henry – your salary forecasts are like the DCF’s you probably churn out everyday…inaccurate and pretty useless!

  18. You lost me completely!!!!!!!!!

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