So you have finally made the decision to quit investment banking. You have worked out that you don’t want to be a banker long term but managed to stick it out and do the required time to maximise your exit opportunities. The big question then becomes: ‘what do I do next?’
Deciding what to do next is actually harder than you may think
Some people have a really clear idea of what they want but for others the decision takes much longer. Even if you think you know what you want to do next I encourage you to go through the process I’m describing below.
Deciding what to do next is incredibly hard because, for the first time you have to narrow your options. After you do investment banking the world is your oyster and you could go into whatever field you wanted. You could work in Private Equity, in Hedge Funds or perhaps go to a corporate. With a few years of investment banking under your belt all of these options are open to you.
You are at the top of the option tree with everything open to you. The problem is that when you choose your option it starts to eliminate other things that you could be doing instead. If you decide to go down the corporate route and try working in a ‘real’ business then the Private Equity and Hedge Fund doors are probably closed to you. If you work for a long only unlisted infrastructure fund, then your ability to move into Venture Capital may be somewhat limited.
Don’t choose an option just because it has prestige associated with it
Bankers are the kings and queens of making decisions based on prestige. Do you remember why you went into investment banking? Did the pay and prestige have anything to do with it? How much job satisfaction did you get out of the prestige when you were actually doing the job? Didn’t you wish you actually thought about what you liked doing?
The same thing applies when you are looking for your next career choice. Don’t make your decision in this way. Don’t aim for Private Equity or Hedge Funds jobs because you think that they have the highest amount of prestige and the biggest pay check at the end of it.
Why? Because you’re making exactly the same mistake that you made going into banking. However while banking offered you this great resume that you could then leverage into other jobs you lose some of your optionality by going into Private Equity or Hedge Funds.
So how do you decide what to do next?
I’m glad you asked. Below is a list of steps that I’ve created that you should go through to decide what to do after you leave investment banking. It is not exhaustive but it is something you should do at an absolute minimum. It may turn out that one of the ‘prestigious’ options that I talked about above is what takes your fancy. But it may turn out to be something else entirely.
1. Think about what you like doing
‘Do what you love’ is an overused maxim and it is not an option available to most people. You are luckier than most and have more options than most so think about what you actually like doing. Start making a list of jobs that involve doing things you really like to do. A bit stuck? Think about these questions
- Have you ever looked at someone else’s job and thought “I’d love to do that”
- If money wasn’t a consideration what would you be doing?
- What do you like about your current Investment Banking role?
- Do you like the industry you work in and your clients?
- When you read the news what do you flick to straight away?
- What magazines do you read?
There isn’t a science to this process. A lot of it is just getting your brain working and working out what gets you excited.
2. Research Research Research
Most of us have more than one thing that gets us going or that interests us so you’re probably going to have a list of things you like doing. The next step is to research what jobs involve doing things that you like doing. If you’re ignoring the prestige element to your search you may find that your options increase dramatically.
For example I realised that I actually really liked investing and the bits of my job that I liked best were researching and modelling the companies. The first thing I thought of was ‘hedge funds’…and then realised that the set of options was so much greater than this. I then started looking at long only investment funds and also sell side research roles. I talked to people and researched what the roles actually involved.
I went through this process for several of my interests and then ended up with a job set that I was interested in.
3. Work out what you are willing to work for
The fact is that most bankers are used to earning a lot of money. Almost any job you go to will be a pay cut from this. You have to think about and work out what sort of pay cut you are willing to take. For example you may love teaching (as I did) but not be willing to accept the wages that a teacher makes…so that option would then come off the table.
Set a number but don’t make it a line in the sand. Be willing to be flexible. A friend of mine left banking for a corporate role that paid less than he wanted but it was in an industry he loved and he finished work at 4 every day. In his spare time he is currently running 2 small businesses which more than tops up the lost income.
Only after you have completed the steps above should you even think about talking to a recruiter or heading to jobs boards. If you go in with no plan you are going to get pushed towards either the option that
- The option that keeps most of your options still open (i.e. Private Equity)
- The option that is prestigious (Private Equity or Hedge Funds)
- The option that recruiters have roles for and that is easy to get you into (Private Equity)
If you’re wondering why so many bankers end up in Private Equity and complain that is Banking 2.0 it is for the above reasons. They haven’t gone through the required process and decided what they want to do. Before you look at options or talk to anyone work out what you want to do and then you can start to look.