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The coming crop of MBA students is exceptional. Can you really compete?

London Business School again

Some banks have been explicit about it. Credit Suisse has specifically stated that it wants to get rid of expensive senior staff and replace them with juniors. Bank of America Merrill Lynch is being more covert, but it too appears to be clearing out expensive senior staff to make way for new hires.

In the circumstances, it should be a source of concern that are 92 people graduating from the London Business School’s MBA programme this summer who specify investment banking as their chosen career path. Almost all are entitled to work in London.

If you want to be able to compete with these new MBAs, you will need the following credentials (it will also help if you have these before embarking on an MBA in an attempt to transform your career).

1. Youth

LBS MBAs don’t state their age on their CVs, but the average age of an LBS MBA is only 29 years. 

Even at INSEAD, where age profile appears a little older, only 12% of MBAs are over 30. 

2. Multilingualism

Around 83% of LBS’s 2012 MBAs who want to go into banking speak another language other than English – many fluently. Most do not have English as their first language, but speak enough English to understand complex MBA classes.

3. Prior relevant blue chip experience

We picked 18 CVs of the MBAs who want to work in investment banking at random. Almost all had prior financial services experience. There’s a former bulge bracket associate with a first in maths, a former employee of a majorUSprivate equity fund, a fixed income trader and credit derivatives structurer with 7 years’ experience at European banks. Some have worked in established financial services firms in their home countries (eg. Brazil).

MBAs aspiring to investment banking who haven’t worked in financial services previously have worked in consultancies like Bain or McKinsey.

4.  Supplementary qualifications

It’s not unknown for MBAs who want to get into financial services to also have MScs and full CFA charters.

5.  The right to work in the EU

As immigration laws are tightened, it seems almost every MBA graduating in 2012 has a right to work in the European Union. Our analysis suggests only 20% don’t. If you’re a non-EU citizen who’s fallen foul of the new laws, you will be at a disadvantage.

6. Cheapness

Most of all, the coming crop of MBAs have the advantage of comparative cheapness. The average starting salary of a graduate from LBS is £95k. Mean total first year compensation for an LBS MBA going into finance last year was £139k.

If you cost considerably more than this, and are not more than justifying your compensation then you have been warned.  The only good news is that the enthusiasm for investment banking among LBS’s 2013 MBAs appears far lower: only 29 say they aspire to careers in the sector currently.

Comments (16)

  1. We all love bright youth and its fantastic idealism. I wish ’em all well. I also wish ’em a healthy dose of reality and some years of experience before they’re given the reins, honeys. Ageism is a crippling and major factor in City screw-ups. I defy anyone to argue it. You prove it, I buy lunch. Older is not slower, it is more reasoned. Younger is not cleverer, it is unseasoned.

  2. Well, if they are THAT good, why are they wasting 2 years and a 100k to learn about basic accounting and Marketing 101?? I agree with the recent comments made by the Head of Human Resources at Deutsche Telekom, who said publicly in an interview that MBAs are completely useless and this degree only produces soulless robots who have maybe some “know-how” but completely lack the “know-what”. Having said that, such robots are exactly what the banks want…

  3. Yup. Like ChampDavid. Esp diff between know how and know what. Kind of illustrates my point about experience is better than exuberance if you want your money to stay safe.

  4. Ha, what, are we supposed to be scared? An MBA is a complete waste of time and money for existing investment bankers. The vast majority of those coming out from LBS are probably i) career changers; or ii) were layed off from their previous IBD job and did not have anything better to do.

    I can think of cheaper ways than an MBA to spend 1 or 2 years getting drunk and networking. I love how people get excited about fancy looking qualifications which are not actually very relevant or useful to the day to day work. I would much prefer someone with 4 to 5 years or solid work experience who survived the downturn.

  5. “The average starting salary of a graduate from LBS is £95k. ”
    Absolute nonsense, this is the salary 3 years after graduation, the editor should really learn to read

  6. CNN Business is currently running regular spots on ‘Millennials’, described as a group of ‘highly educated…blah blah…’

    Exceptional students? Do me a favour!

  7. Let them come, get a taste of city life – before falling prey to the mass layoffs in recession Part 3!

  8. I hate being young. At least old people will get their pensions.

  9. I see a lot of comments dictated by fear of competing with better educated people. Come on. MBAs won’t be as seasoned as senior bankers but in parallel can bring a breathe of freshness and new ideas, more energy and enthusiasm, good sense of humor (on average…) and hopefully better ethics will come too (see letter on Goldman last week on NY times…). What I am really concerned about it is that there’s still some people such as ChampDavid thinking that in a top MBA what you study is Marketing 101 and Accounting 101…hahaha…well, ChampDavid that’s not really the case…if you guys are good at what you do in your IB roles, well you should know how important it is to know well your competitors…in this case, it seems you don’t know what MBAs do in two years. Solving real client problems in different countries, working in multi-cultural teams 24/7, having time to read/study/discuss what is happening around the world everyday with different points of view to grow…learning to listen. Apologize for the generalism by the way, some MBAs from top business schools are crap, but some others are very good. In 1/2 years, the acceleration on your self-awareness, on understanding your strenghts and weaknesses and enhancing what will be useful on the job, on leading and motivating teams…well, it is just far better than what you can learn on the job. And by the way you have time to think about your self, your skills and your ideas – something that you can’t do while working. Of course you lack/miss experience on the field (partially, as many have been in financial services or working for several years before the MBA anyweay), but…you can get experience on the job once you are hired. Be aware. Working well and trying to making the world a better place – that we should ALL do at this point in time – is not about selling more to your banking customers. It is about making your office a better place, it is about providing “service” calls instead of “sales” calls to your customers, it is about helping each other, it is about going home and think about contributing. It is about learning how to enjoy doing what you are very good at. Believe me, money will flow from there.

  10. …and I thought the more you learned, the more concise you got. More than three sentences to sell your big idea, you’ve had it. I rest my case.

  11. Fortunately ‘cityhag’s’ career has taught him/her so much more in the form on snide comments and cliches. Thank God I’m going to take two years out of work, have fun, learn loads and increase my marketability rather than end up a bitter old ‘cityhag’.

  12. How does cityhag find time to comment here All the time? Probably that’s what is wrong with city – employing people with no interest and skills to do the job.

    I haven’t done an MBA but taking few years after 5-10 years of working to gain some fresh perspective and skills sounds like a good idea.

    Employers aren’t stupid. If there was no value in hiring MBAs, they will not do it. Supply and demand -economics 101

  13. When I was in school, my professor used to say one little sentence….”this is so simple, even an MBA student will understand!” He has authored quite a few books on asset pricing.

    I think MBA is like teaching life in 2 years by people who don’t understand that life in itself is unique for every individual. You might argue that MBA helps in developing that uniqueness, well that is the illusion which helps business schools spin the money! Get out of the Gaussian copula called MBA, you will see a whole new world out there.

  14. Cityhag is a she, duckies. Cityhag comments such a lot because she can multitask. Cityhag is off on hols, so enjoy the break. City hag is not bitter, Cityhag had an evolved sense of humour, unlike many she encounters. Cityhag does irony.

  15. Hmm.

    I am member of the class of MBA2013 at LBS, and, while I recognise the profile of the class, I don’t really recognise the picture of a slew of bankers falling over themselves to hire said class. The only people getting summer internships in IB are those with previous banking experience – note, I say “banking,” not just “finance.” Oh, and the odd lawyer here and there. But mainly people who have already been doing it for years and didn’t need an MBA to continue doing it.

  16. 95k is the salary 3 years after graduating !

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