I recently wrote a post which gave an overview on getting a lateral transfer into Investment Banking and what type of people it normally works for. I also mentioned in that most that it was far easier to get a lateral transfer into a mid ranking position than to get a job as a graduate straight out of college or university. What I didn’t cover is should you actually apply for an investment banking job?
Some of this topic ties into a post I wrote for graduates about the right reasons to do Investment Banking however for lateral hires there are so many more things you should consider and in this post I will go through just a few of them. I will go through each of these topics in more detail below but the questions you need to ask yourself before you start applying for Investment Banking positions is:
- What is it about Investment Banking that makes you want to do a lateral transfer?
- If you have a family or partner do you have their support?
- Is it just a matter of the grass being greener on the other side?
Obviously some of these are interconnected but let’s go through the things you should think about before chatting to that first investment banking recruiter.
1. What is it about Investment Banking that makes you want to do a lateral transfer?
This is absolutely the most important question you should ask yourself before joining an Investment Bank. Why exactly do you want to do Investment Banking? Is it the work, the pay, the prestige, the career opportunities? Be completely honest with yourself and make sure you assess your reasons versus reality.
For example if it is M&A deals you really want to do but you already work for a boutique corporate advisory firm that is already doing M&A work then this can’t be the reason…after all you’re already doing M&A work. Is it about doing better or more prestigious deals? If so why do you want to do these more prestigious deals? What is it about an Investment Banking deal that makes it better than the deal you are working on at the moment? Have you spoken to current Investment Bankers and asked them about these top tier deals. Actually the best experiences I personally had were on the smaller deals where I could really get involved as opposed to the large deals which had a million banks and bankers on them.
Is it the pay? Investment banking definitely pays more than most other fields but the fact is that this comes with a trade off. Your time is not your own and it is far more stressful than a lot of other jobs. You do get paid more but you need to ask yourself how important this is for you. I actually ended up quitting banking when I worked out that I didn’t need as much money as I was making.
One of my close friends wanted to join a bulge bracket investment bank from a boutique where he had a really sweet role that got paid well and he was well respected and had great hours because of the prestige associated with bulge bracket banks…which is crazy and I told him so in no short manner. Once you work at a bulge bracket bank the name doesn’t mean anything any more…you’re just doing exactly the same work at a different place.
These are all questions you need to ask yourself and although I’ve sounded quite negative here the reason I’m writing these is because you can probably rattle off to me all the benefits. In fact most people just need to stop and think about whether it is really for them.
2. Do you have your family’s support?
Relationships are notoriously hard to maintain in Investment banks. I have written about this before. When you join as a graduate you tend to find a person who will put up with your crazy, unpredictable lifestyle and long hours. If you are entering banking later in life you may already have a partner who you want to spend the long term with or you may already have a family. Are they on board with what you are getting yourself in for and more importantly do they realise what it is going to be like for you? Do they really appreciate how much your life is going to change?
Make sure you have a supportive home environment before you consider applying for a lateral transfer.
3. Are you sure it isn’t a matter of the grass being greener on the other side?
Every job sucks a little bit after you get into a routine and the 3 or 5 year itch applies to almost everyone (especially in our generation) so make sure you are not over-emphasizing in your own mind how ‘awesome’ an investment banking job would be over your current dull or boring job. I worked with a guy who was about to make partner at a law firm but decided that he really wanted to work in finance. Given his lack of financial experience he got put in as an analyst and absolutely hated his life for the next 3 years while he made his way up the ranks. He told me that in hindsight he would have not done what he did.
Make sure you know both the pros and cons of what you are going into and also what you are leaving behind!
Hopefully I’ve given you some sort of framework to begin evaluating whether doing a lateral transfer into Investment Banking is for your. Next time I’m going to start talking about the actual process and how to go about getting a job.