-
Target Test Prep 20% Off Flash Sale is on! Code: FLASH20
Redeem
Is Finance a Good Career Path and Why?
Is finance a good career path? For many MBA hopefuls, the answer is a resounding yes. To help you decide, we’re going to take a look at a variety of factors you should consider. These include:
- How do finance career paths and MBA admissions overlap?
- What’s the appeal of the finance career path?
- Pros and cons of investment banking
- Who are the finance industry employers?
- Investment banker salary + bonus
- Post-MBA associate position at an investment bank
- Private equity compensation
- Is investment banking a good career path goal for my MBA essay?
- Sample MBA application essay excerpts
How Do Finance Career Paths and MBA Admissions Overlap?
Check out our overview of what is an MBA, including facts and myths. Our insights about MBA admissions for finance industry candidates initially came from a client study we did several years ago about success factors for getting admitted to Harvard, Stanford, and Wharton for private equity applicants.
We discussed the merits of the investment banking career path in a conversation with SBC consultant Puja, whose professional trajectory followed a similar route.
“I began to work towards an investment banking career after earning my MBA from Wharton," Puja explains. "The idea of working on large corporate deals was intellectually exciting to me. Plus, the prospect of applying my strong quantitative foundation, along with the ability to interface directly with clients, was extremely appealing.”
In this new analysis, we hope to guide young professionals who currently are not in either investment banking (IB) or private equity (PE) roles, but seeking that career path through and after their MBA program.
Career switching through the MBA experience is common, but it requires a lot of time and diligence. We often see clients whose pre-MBA career paths primarily entail softer skills. Hence, they look to the MBA degree to acquire hard, quantitative analyses and frameworks for a comparably data-driven career path ahead.
We have also seen many non-traditional applicants, including those from education and marketing, covet the finance industry career path because of its prestige and financial upside.
Is Finance a Good Career Path? What's the Appeal?
A Wall Street career path conjures images of advising the super-wealthy through billion-dollar transactions. It’s not surprising that many ambitious professionals find that path alluring. Selling financial savvy and market predictions can give these young professionals the feeling that they are superheroes—and bring huge paydays.
IPOs, mergers, acquisitions, corporate lending, institutional trading, and other big-ticket Wall Street transactions are all among the appealing-but-demanding work responsibilities of a finance professional.
Without a doubt, investment banking is the foundation of Wall Street riches. Bloggers online have said, “Wall Street is still the greatest bastion of individual capitalism in the world and a place where determined individuals can work their way from answering the phones to calling the shots in just a matter of years. But the reward doesn’t come easy, free, or fairly.” It requires much diligence, preparation, and work ethic.
Pros and Cons of Investment Banking
When we canvassed sources about the pros and cons of the finance, here was what we heard:
Pros:
- Rubbing elbows with the rich and famous
- Six figures compensation right out of school
- Investment banking pays more than consulting
- Gain an incredible financial skillset
- Build a great network
- Incredible exit opportunities into other attractive career tracks
Cons:
- Long hours: 70 to 100 hour work weeks
- Pay is traditionally heavily weighted toward the bonus, which is volatile
- Positions usually go unadvertised and require hustle; must fight tooth-and-nail for a shot
- Filled with high-performance people who are used to getting their way
- Quality of life concerns due to overwork
Who are the finance industry employers?
Bulge Bracket Investment Banks:
JP Morgan, Goldman Sachs, and Morgan Stanley; Bank of America Merrill Lynch and Citi; Credit Suisse and Barclays; Deutsche Bank and UBS.
Middle Market and Other Full-Service Banks:
Wells Fargo, RBC, Jefferies, Houlihan Lokey, Harris Williams, and many European, Asian, and Canadian banks, such as HSBC, BNP Paribas, Mizuho, Nomura, BMO, and CITIC
Elite Boutique Investment Banks:
Centerview, Evercore, Greenhill, Guggenheim, Lazard, Moelis, Perella Weinberg, PJT Partners (formerly Blackstone), Qatalyst, and Rothschild (only in Europe)
What Do Finance Jobs Pay?
Investment banker salary* + bonus
- Analyst – First Year: $70,000 – $150,000
- Analyst – Third Year: $120,000 – $350,000
- Associate – First Year: $150,000 – $350,000
- Associate – Third Year: $250,000 – $500,000
- Vice President: $350,000 – $1,500,000
- Managing Director/Partner: $500,000 – $20,000,000+
Typically an IB analyst bonus is between 30-100% of base salary.
*Source: Wall Street Oasis https://www.wallstreetoasis.com/salary/investment-banking-compensation
Post – MBA Associate position at an investment bank
Varies according to signing bonus, relocation bonus etc.
- Base salary: $125,000-$150,000
- Bonus: $80,000-$200,000
- Total: $200,000-$500,000 based on tenure and seniority
Private equity* compensation
- Analyst/Associate – First Year: $100K – $250K
- Analyst/Associate – Second Year: $150K – $300K
- Analyst/Associate – Third Year +: $170K – $350K
- Vice President: $300K – $800K
- Managing Director/Partner: $500K – $10MM+
*Source: Wall Street Oasis
Is Investment Banking a Good Career Goal for My MBA Essay?
We asked the former MBA Admissions Officers on our team to chime in. A former Wharton Admissions Officer shared, “Stating attainable career goals within the MBA application is essential for the top MBA programs, especially since several, such as Wharton, have combined Admissions and Career Services under the same umbrella.”
MBA Admissions Officers are thinking about exit opportunities when reviewing the application in terms of:
- is this person already on the fast track
- are their goals achievable and reasonable
- do they have a plan for how they will use their time during the program
- how will they meet their goals
Whether investment banking makes sense for your career path essay depends on many factors. When you’re actually at your MBA program, what you end up pursuing is entirely up to you. But, getting in is the top priority. Let’s look at sample career goals next.
Sample MBA Application Essay Excerpts
Example #1
After receiving an MBA from Columbia, I first intend on transitioning from strategy consulting into investment banking, where I will gain financial modeling skills and have the opportunity to identify and evaluate prospective targets. In this role, I would combine my previous acquisition implementation experience from consulting with M&A finance principles from my MBA coursework to achieve a well-rounded understanding of the entire transaction life cycle.
My role in investment banking will then serve as a critical stepping stone for me to move into private equity after 3-5 years. This transition will allow me to integrate financial and operational deal knowledge to make sophisticated investment decisions and enhance stakeholder values. An MBA at Columbia at this time would be pivotal in helping me navigate my career transition from strategy consulting to investment banking.
Example #2
Post-MBA, I plan to pursue an investor relations role focused on Latin American clients at a private equity firm. Leveraging my background of working directly with Latin American institutional investors in custodial banking services, I will pivot into a front-office role of acquiring and servicing new clients for this investment class at a firm such as XXX or ZZZ.
With the increasing popularity of private equity investments, I believe I could be a real asset to a private equity firm due to my fluency in Spanish, cultural background, and experience with local regulation in Latin America. These skills, combined with a Goizueta MBA, will enable me to capitalize on the opportunity to help PE firms grow and expand into the growing Latin American markets.
However, I recognize that I need the technical finance skills that a Goizueta MBA could offer me to succeed at a PE firm. Additionally, I believe Goizueta would help me enhance my worldview through the global focus and the immersion opportunities to engage in projects globally.
Example #3
An MBA from Wharton will enable me to transition from management consulting to private equity. As a consultant, I have sized markets, analyzed SWOTs, and developed quantitative and qualitative research techniques. As early as 2007, I was leading projects on my own, including a study to expand market penetration strategies and scenarios in the regional jet market for Spirit Aerosystems, a multibillion-dollar aircraft structures manufacturer.
Based on my recommendations, Spirit has expanded into a standalone aero-structures supplier, breaking out of its captive supplier position by broadening its customer base. My five years as a consultant, coupled with my military training and leadership, have provided me with a solid foundation to begin my MBA. A Wharton MBA will allow me to integrate the lessons I have learned in both pursuits and provide me with the managerial knowledge, cross-functional business acumen, and formal leadership training required of a successful private equity professional.
Example #4
In the short term, I will use my MBA to transition to a private equity investment role at a multinational investment firm like Carlyle, Blackstone, or KKR. By capitalizing on Wharton’s advanced elective finance classes, I hope to sharpen my analytical proficiency and deepen my investment strategy knowledge.
Ultimately, I hope to leverage the leadership skills I develop at Wharton to land an executive position in the private equity division of a global investment firm. I intend to use my platform to campaign for the promotion of women to leadership positions across the industry. Through courses such as William Lauder’s Decision-Making in the Leadership Chair, I will have direct exposure to C-suite professionals and learn how to position myself for a similar role and overcome challenges once in the position.
See our Career Recruiting by MBA Program overview for more information on career opportunities. You can also request a free MBA candidacy analysis to understand your career profile for MBA admissions.
***
Stacy Blackman Consulting is the only MBA admissions firm with a complete panel of former Admissions Officers from every M7 program and the elite European MBA programs. If you are looking for guidance on your MBA application, we can help with hourly and comprehensive consulting services. Contact us to learn more.
Recent Articles
Archive
- April 2024
- March 2024
- February 2024
- January 2024
- December 2023
- November 2023
- October 2023
- September 2023
- July 2023
- June 2023
- May 2023
- April 2023
- March 2023
- February 2023
- January 2023
- December 2022
- November 2022
- October 2022
- September 2022
- August 2022
- July 2022
- June 2022
- May 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- September 2021
- August 2021
- July 2021
- June 2021
- May 2021
- April 2021
- March 2021
- February 2021
- January 2021
- December 2020
- November 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- December 2019
- November 2019
- October 2019
- September 2019
- August 2019
- July 2019
- June 2019
- May 2019
- April 2019
- March 2019
- February 2019
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- October 2016
- September 2016
- August 2016
- July 2016
- June 2016
- May 2016
- April 2016
- March 2016
- February 2016
- January 2016
- December 2015
- November 2015
- October 2015
- September 2015
- August 2015
- July 2015
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- January 2015
- December 2014
- November 2014
- October 2014
- September 2014
- August 2014
- July 2014
- June 2014
- May 2014
- April 2014
- March 2014
- February 2014
- January 2014
- December 2013
- November 2013
- October 2013
- September 2013
- August 2013
- July 2013
- June 2013
- May 2013
- April 2013
- March 2013
- February 2013
- January 2013
- December 2012
- November 2012
- October 2012
- September 2012
- August 2012
- July 2012
- June 2012
- May 2012
- April 2012
- March 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009