The perfect banking career path
Some things are fairly self-evident when it comes to working in investment banking. They include going to a top name school, gaining impeccable exam results, and starting out at a bulge bracket name. But what happens after that?
1) Stay put for at least two, preferably three, years
Whether you work in IBD or in sales and trading, most recruiters agree that given the choice, you should stay in a first job for around three years.
"There aren't many shortcuts to success, and whilst you can
make a move that will accelerate your career, it's best to get the
analyst class under your belt at least," says Logan Naidu at the Cornell Partnership.
"We've seen people who've moved three times in the space of 18 months," Naidu adds. "If you're trading up, it can work out to your advantage. But if you then get cut for whatever reason, moving around a lot can look bad."
2) Think about looking outside banking in year three
If you work in IBD, by year three you may want to start contemplating applying for associate roles in private equity funds. If you want to work in PE and delay much later than this, you'll probably have to wait until you're a VP, at which point you may be able to move into private equity as a principal. Be warned, however - there are far PE fewer opportunities at this level than lower down the ranks.
If you work in sales and trading, you may be able to get out of banking and into a hedge fund in year three.
3) Or...trade up within banking in year three
If you don't have the PE/hedge fund urge, and you're not at a market leading house, headhunters say the end of your third year should be when you aim to trade up within banking.
"Within your first nine years in the industry you should move two or maybe three times," says Jason Kennedy, a markets headhunter at Kennedy Associates. "They should be upwards moves to more senior positions at banks within your tier, or to houses in the next tier up."
However, if you're already at a market leading institution you're advised to stay put - possibly indefinitely. "If you're at a Goldman Sachs, JP Morgan or Morgan Stanley, why not stay there for your entire career?" says one headhunter who works with junior IBD professionals. "Most senior people with those firms have been there for 15 years or more."
4) Trade up again in year six
If you're not a market leading institution by your sixth year, Kennedy advises trading up again.
Bear in mind, though, that moving more than once every three years is considered inadvisable.
"People are very cautious of job hoppers," says a senior IBD headhunter at another firm. "Someone who's moved every two years will raise alarms.
"If people can see progression in terms of brand and responsibility through moves every three years, they are likely to find that acceptable," he adds.
5) The home straight
After ten years in the industry, you should have attained a senior position at a top tier firm.
Kennedy says the 'critical move' is likely to be your third one, around year nine. This is the job move which will maximise your earning power during the key years of your career.
Beyond that, Kennedy recommends moving once or twice before you retire. Notably, it's easier for very senior staff to move once every two years as stock deferrals over three years make buyouts more expensive after year two.
6) The alternatives
Needless to say, not everyone's career follows this incredibly perfect and highly simplistic path. "The problem is when someone starts at a top firm and goes down and down until they become the janitor," says Kennedy.
If you find yourself slipping, an MBA may help get you back on track between years three and five. Beyond that, it may be necessary to accept relegation, or take up teaching instead.
