As a student with a passion for business and/or finance, a career in either management consulting or investment banking can be alluring options. Each represents the opportunity to earn a significant salary right out of college, even with just a bachelor’s degree. Unlike other industries, like medicine and law, which require extensive academic training and considerable years of experience, a fresh graduate can choose either of these career opportunities as frequently hiring firms to decide on
their own norms and candidate requirements.
That being said, both management consulting and investment banking involve fierce competition for hiring the brightest talent. That being said, what are the pros and cons of each career opportunity, and what are the exact steps you should take to establish a career in either domain?
Management Consulting
A management consultant is a professional tasked with analyzing a company’s operations and identifying inefficiencies, followed by advice as to streamlining them to increase efficiency. A career as a management consultant requires excellent people and negotiation skills with an
inherent understanding of how various processes function.
In most cases, a fresh management consultant can earn anywhere from $65,000 and $100,000 in the first year, and having an MBA degree can push this upwards of $165,000 per year.
Management consultants typically work fewer hours per week to earn their big salaries compared to investment bankers. However, the prospect of their work-life balance is often eroded due to their frequent travels, as in most cases, few management consultants are lucky enough to exclusively
service local clients.
Investment Banking
On the other hand, investment banking as a career option represents a broader array of roles, such as capital market analysts, research associates, and valuation analysts. In addition, a finance, economics, mathematics, or accounting degree is often a prerequisite.
A career in investment banking is comparatively more demanding than management consulting, although it requires the same skills in communication, people management, negotiation, and analysis.
Most professionals who fall under the umbrella of investment banking need to typically clock in 75 to 100 hours per week as most of their tasks are fueled by in-depth research.
While the salary of these professionals tends to vary between institutions and designations, in most cases, they are north of $100,000 per year. While work-life balance is a rare commodity in the lives of investment bankers, the sizable year-end bonuses do make up for it to a great extent.
Skills Needed
Irrespective of the career you choose, whether its in investment banking or management consulting, you will need to develop strong people and management skills.
For instance, in management consulting, you will often be required to understand the complex management structures of the client, analyze them in-depth and underline the inefficiencies that plague it. While there are robust software solutions that will assist you in your role, you will need to
have accurate and decisive thinking skills to assist you in analyzing and solving the problem most effectively.
On the other hand, across most roles in investment banking, you will be regularly tasked with managing vast sums of money as well as data. Thus an intrinsic sense of discipline and quantitative skills will prove to be invaluable. Along with this, veterans know that a flair for diplomacy will take you a long way in your investment banking career.
In Conclusion
Both investment banking and management consulting are incredible career opportunities, to say the least. However, you need to work on a wider catalogue of skills if you want to establish a sustainable career in either of these fields.
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