is investment banking worth it?

[Guest ibfreak]

any professionals in the IB industry able to provide some insights to the following: 
- pros n cons of being in the industry 

- is the money really good? 

- tips you would give someone who is looking at joining IB 

[Guest Expat Guest]

I'm working in an investment bank at the moment. I work in electronic trading technology. My group writes the systems trading all sorts of electronically tradable products across foreign exchange, rates and credit asset classes

 

- Pros of the job I'd consider to be typical office job working life comforts. Most investment banks these days are quite highly incentivised to provide working flexibility to employees too. Often people can take work from home days and modify their working hours. Holidays usually go by UK standards at ~24 days/year. Contrary to popular belief, many IB employees are also not stressed out of their minds and working horrible hours. Most environents are pretty relaxed. Travel opportunities are often good. In many positions employees receive the chance to apply to continue their job from another country of the IB. I moved from London to Singapore.

Cons of the job I'd consider to be the social aspect. Beyond some infrequent after work drinks if even, IB employees tend not to socialise. Most are middle-aged with families etc. An office desk job obv can become repetitive feeling. It can become a challenge to stay stimulated always.

 

- Money varies across positions obviously, but typically money is good. My own income in technology since university graduation has progressed like this below:

Year 1: ~$40,000

Year 2: ~$45,000

Year 3: ~$145,000

Year 4: ~$150,000

Year 5: ~ $155,000

 

- My tip for getting into the investment bank and hedge fund industry would be to embrace the fact that the industry is actually automating most people OUT of the industry. Computers have taken over many people's jobs of 20 years ago, and it's happening more and more. To work in this industry you need to get on the side of the "automaters" and not on the side of those automated out. My advice would be to aim for a job in some area of financial technology. The spectrum of jobs in financial technology is very broad. Employees working in this area typical come from university having studied mathematics, engineering, computer science, technology, physics, economics.

 

 

 

[Guest lastdraw]

oh cool, thank you for your input! am equally curious about the industry as a whole and you gave a good idea of what you did and what the industry is frm your POV 

Edited September 24, 2018 by lastdraw

[Guest Jup]

4 hours ago, Guest Expat Guest said:

 

Year 1: ~$40,000

Year 2: ~$45,000

Year 3: ~$145,000

Year 4: ~$150,000

Year 5: ~ $155,000

 

 

Why is year 2 to year 3 such big gap in salary?

[Guest Expat]

17 hours ago, Guest Jup said:

Why is year 2 to year 3 such big gap in salary?

 

Technology developers in IBs typically transition from "graduate schemes" into what are considered to be more productive employees after two years in the job. They also start to get headhunted pretty aggressively by recruitment agencies around this time. There's usually a jump in salary given to keep employees from leaving, and then another jump in salary for employees who do leave anyway and join a new IB. I moved from one to another

 

Year 1: ~$40,000

Year 2: ~$45,000

Year 2.2 ~$90,000 By IB #1 trying to keep employee

Year 3: ~$145,000 By IB #2 taking from employee IB #1

Year 4: ~$150,000

Year 5: ~ $155,000

 

 

[Boydsg]

the salary scale is not realistic. i came from banking and privy to salary scale. not everyone will have the bump in salary but yes, if u move to another bank, your increase will be worth the while.

 

long gone the days where money are thrown at candidates.

 

but if u are looking for pay, banking is still the industry to be in but not necessary the case for certain roles. as a point of reference, certain IT companies do pay better than banking.

[Guest Worrying]

3 hours ago, Boydsg said:

the salary scale is not realistic. i came from banking and privy to salary scale. not everyone will have the bump in salary but yes, if u move to another bank, your increase will be worth the while.

 

long gone the days where money are thrown at candidates.

 

but if u are looking for pay, banking is still the industry to be in but not necessary the case for certain roles. as a point of reference, certain IT companies do pay better than banking.

Yah, the salary jump from 45K to 145K (100K increment) sounds like fantasy.   Besides, with so many Foreign IT personnel from india village willing to be paid cheaply,  it is unrealistic for employer to choose an expensive person over a cheap person.  There is no lack of IT people in Singapore after the influx of foreigners, if the salary has not been depressed as a result, I am worried. 

[Guest Expat]

4 hours ago, Guest Worrying said:

Yah, the salary jump from 45K to 145K (100K increment) sounds like fantasy.   Besides, with so many Foreign IT personnel from india village willing to be paid cheaply,  it is unrealistic for employer to choose an expensive person over a cheap person.  There is no lack of IT people in Singapore after the influx of foreigners, if the salary has not been depressed as a result, I am worried. 

 

I'm not sure why you think Indian expats in IBs are being paid cheaply. Many Indian expats in investment banks are really well compensated.

 

I think to confirm numbers here anyone can look at Glassdoor salary ranges for associate and AVP-level employees across the different banks. Most people reach associate by year 2 and AVP by year 4.

 

Salary jumps like this are definitely happening for technology developers in banks and hedge funds. I only know technology

[Guest Guest]

Since when did tech guys in IBs become investment bankers? Like that the tea lady in the pantry of Goldman Sachs also an investment banker?

[Boydsg]

agreed. 150k per year as an investment banker is a total failure.

 

these days, throw a stone and the chances of hitting someone with 100k to 150k a year randomly is very high. no big deal actually.

[Guest Guest]

any professionals in the IB industry able to provide some insights to the following: 
- pros n cons of being in the industry 

- is the money really good? 

- tips you would give someone who is looking at joining IB 

 

Generally when you look at the investment banking industry and we talk about pay, it is the front office that is getting the bucks, that is the IBD(M&A, Equity, Debt), Sales and Trading, and Wealth Management (AM and PB). You start about $10k per month SGD +-500, and by year 3 its probably about ~$15, not sure what the other guys are on about with that 100k increment. Nonetheless, your bonus especially in S&T and IBD are going to be booster. 

 

Nonetheless, hours can be gruelling especially in IBD, so you have the money but no time to really spend it properly either. You spend on things like laundry, drinks etc., or anything that makes working 90-100hours a week bearable. As such, it is no doubt you actually don't save much until you become an associate (Y3 onwards, of which most people would have quit).

 

Good money? I can easily find guys outside of IB that are paid more, from $14k starting to that of $25k, but nonetheless still the minority. If you are plainly chasing money, IB is not really your thing. Tech? Possibly. But you gotta grind as hard or just have the flair for it.

[mlyfunp]

On 9/22/2018 at 3:56 PM, Guest ibfreak said:

any professionals in the IB industry able to provide some insights to the following: 
- pros n cons of being in the industry 

- is the money really good? 

- tips you would give someone who is looking at joining IB 

 

In what sense is this topic related to being gay?

[tomcat]

On 9/24/2018 at 7:18 PM, Guest Expat Guest said:

 

- My tip for getting into the investment bank and hedge fund industry would be to embrace the fact that the industry is actually automating most people OUT of the industry. Computers have taken over many people's jobs of 20 years ago, and it's happening more and more. 

 

 

Surprised noone else picked up on this. Due to software and automation, this is a real factor that not only affects those in banking, but also other industries such as real estate agent, travel agent, retail etc.
 

This is a list for early adopters looking for a stable career within the new global workforce:

• Automation
• IT professionals and other technology specialists
• Managers and executives whose work cannot easily be replaced by machines or automation.
• Educators 
• Manual and service jobs in unpredictable environments
• Healthcare
• The deployment of new technologies
• Investments in infrastructure
• Investments in renewable energy, energy efficiency ,and climate adaptation.
  
  https://www.fastcompany.com/3067279/you-didnt-see-this-coming-10-jobs-that-will-be-replaced-by-robots
  
  https://www.theguardian.com/us-news/2017/jun/26/jobs-future-automation-robots-skills-creative-health
  
  
  
   

Edited September 26, 2018 by tomcat

[mlyfunp]

6 minutes ago, tomcat said:

Surprised noone else picked up on this. Due to software and automation, this is a real factor that not only affects those in banking, but also other industries such as real estate agent, travel agent, retail etc.
 

This is a list for early adopters looking for a stable career within the new global workforce:

• Automation
• IT professionals and other technology specialists
• Managers and executives whose work cannot easily be replaced by machines or automation.
• Educators 
• Manual and service jobs in unpredictable environments
• Healthcare
• The deployment of new technologies
• Investments in infrastructure
• Investments in renewable energy, energy efficiency ,and climate adaptation.

 

That's interesting, but I still see people cleaning the streets and picking up the trays at food courts....

[tomcat]

2 minutes ago, mlyfunp said:

 

That's interesting, but I still see people cleaning the streets and picking up the trays at food courts....

These professions, while necessary are not the core of economic/social structures. For example, hiring a cleaner maybe makes up 1-5% of a payroll liability, but a fleet of qualified bankers makes up a significant cost. so automation tends to be directed to areas where large costs savings can be made, on top of other factors such as efficiency, accuracy etc.

My forecast is that only true human skills like Arts, Education, etc cannot be so easily replaced. Automation can be programmed to carry out difficult calculations or exhaustive tasks, but there is no equation for creativity.

 

At least, not yet.  

 

 

[inamoto]

For someone who is keen to join IB, it would be useful if you possess any of the below:

- brilliant grades from one of the recognized degrees; or

- prior intern experience in IB; or

- well connected (eg u have deal making potential by virtue of your background, or know people in IB who has got decision making authority);

- good at writing for your application and well versed in all the tests that they will require you to take

 

IB is considered an elite circle which you may want to compare with the fraternity concept in US colleges. entrance is not easy for any front desk IB role. 

 

In certain banks, the existing headcounts get reviewed on a quarterly or 6mthly basis where under-performers are asked to go.

 

Potential pros is that this is very glamorous employment to your CV and even if you choose not go stay in front office, it is easier to garner a back office job thereafter. There are perks associated with the job as the benefits provided by the bank is usually not bad. 

 

Cons is that it is cut throat environment and fast paced. Very long hours are the norm, so you must be prepared to work like this Mon - Sun. any less, is a bonus. Be contactable for work at any hour is also an expectation so your social life can take a hit. 

 

Money wise is not bad - compared to government jobs or other grad jobs, higher base with huge potential for big increases year on year if you perform. the current pay scheme will reward those who perform. (in the past, anyone in IB front office can expect huge jumps in pay - now less so). Compressed income potential if you are good at it. Bar energy companies or tech companies like google or facebook, IB would be quite good payers if you are good.   

 

much depends on you - if you are able to get in, and perform and last the race.. if you are, am sure your financials will be not an issue at all. 

[Guest Expat]

I don't really know what the above is about. I write the electronic trading system used by "front office" in my bank. I sit at the desk next to our "front office".

 

They arrive to work at 7am and they leave at 4pm. At 7am is desk handover from New York and at 4pm the desk is given to London. No grueling hours needed. No weekends because most financial instruments aren't traded at weekends. Markets across almost all asset classes are closed.

 

Being "well connected" won't get you into front office in an IB. Banks have very strict candidate competition policies on front office hires. If you're recommended by someone with decision making power both you and them will be scrutinised and your relationship will be investigated.

 

Front office on the trading desks in banks these days are rarely asked to go for underperformance. Most of the desks are watching electronic trading systems on autopilot, and actually their jobs are more risk management, and making sure the algos don't go crazy. Unless they're ignoring their hedging tasks, they're not underperforming. Front office will be asked to go swiftly however if they're discovered to be breaking any regulations.

[Guest salary increases]

On 9/25/2018 at 9:36 PM, Guest Worrying said:

Yah, the salary jump from 45K to 145K (100K increment) sounds like fantasy.   Besides, with so many Foreign IT personnel from india village willing to be paid cheaply,  it is unrealistic for employer to choose an expensive person over a cheap person.  There is no lack of IT people in Singapore after the influx of foreigners, if the salary has not been depressed as a result, I am worried. 

 

Again this Anti foreigner stance. Your government has been pushing salaries up for Singaporeans. You can find CEO or General Manager admin secretaries who nowadays ask for a starting salary of 7k to 11k (6 - 10 years experience). In the last 8 years salaries for Singaporeans have been increasing on a steep scale. [I have never seen this as a smart move from your government considering the salary scale of the countries surrounding Singapore but it was more to increase the local spending power.]

In fact, most foreign employees from certain countries and on the mid level to higher mid level range receive much less in salaries (and mostly hold better degrees as their Singaporean co-employees). While the Singaporean might be at 7-9k per month the foreign employee will be at 4.5k to max 6k.

Plus: if you ask any Employer: Would you prefer to hire a foreigner or a Singaporean who (the latter) comes with 1000 of demands and uses up his MC entitlement as if it is extra leave???

The working attitude of locals is so much on decline. I m in an office building with plenty of companies and 10 years back many Singaporeans were still at the offices around 7.30pm, some even went dinner and stole back into the office afterwards.

Nowadays: Sharp 4.45pm they will prepare to leave, go to the restroom, and check at their desk for the next bus to arrive at their nearest bus stop and depending on the official working time will clock out 5pm sharp or 5.30pm sharp.

I have nothing against this attitude if the working culture is efficient, but...

You should more worried on this...

 

Investment banks

Every bank will ask for some employee who has the merits of getting and maintaining worthy customers in the investment banking sector. this employees will get a basic salary but a good chance to increase or double by bonus scheme.

 

I don't intend to respond to the main question raised by the threadstarter, because I don't see why I should be his personal coach or guide.

There are much smarter ways to receive a response on his question (instead of asking here)

[tomcat]

On 9/29/2018 at 6:54 AM, Guest Expat said:

Being "well connected" won't get you into front office in an IB. Banks have very strict candidate competition policies on front office hires. If you're recommended by someone with decision making power both you and them will be scrutinised and your relationship will be investigated.

I am inclined to agree with the above, rather than the post it was replying to...

[Guest Neil2920]

I lost my job recently. Are there still job opportunities in investment banking?

[jiriki]

4 hours ago, Guest Neil2920 said:

I lost my job recently. Are there still job opportunities in investment banking?

there are always opportunities, only question is whether it is open to u. I haven’t heard of people switching into IB mid career. Too many sweet young things out there seeking to gain entry.