Five things I learned from my 18 months as an investment banker

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Why would you want to become an investment banker? A few years ago, you didn’t necessarily need a qualitative reason. The money was enough. Now, as salaries have downshifted from tremendous to very good, other factors need to be considered.

We talked to former investment banker Chris Thomas, who spent 18 months as a post-MBA associate at a major bank in the U.S. before leaving the industry, to get his take on what one needs to know before making the plunge. He was honest and critical but, unlike some other former investment bankers, he didn’t condemn the industry or his former employer, which he asked to remain nameless. There are just a few fallacies associated with the business that you need to know. Here are his main takeaways. (note: Chris Thomas is a pseudonym used to protect the identity of the source).

Exit opportunities are fleeting: A fair percentage of investment bankers use the job as a launching point for a different career path. But transitioning to buy-side isn’t nearly as easy as one might think, or at least it isn’t as easy as it once was, Thomas said.

“Go look at job postings on the buy-side. Most are looking for a pre-MBA or they want you to already have buy-side experience,” he said. “You end up in no man’s land. Most guys think there are great exits but it’s not true anymore.”

Once you have more than two years of experience and your price tag becomes more expensive, you tend to get pigeonholed and stuck in the industry, he added.

MD isn’t a finishing line: Another fallacy that he noticed surrounds the life of senior bankers, particularly those of managing directors, which are often glorified. Sure you make more money, but the carrot at the end of the tunnel isn’t what it used to be, Thomas said. “They say when you become more senior your lifestyle gets better,” he said. “I challenge that. They are still making weekend calls, just like everyone else.”

It’s all about volume: Everyone knows investment banking is a ton of work, yet still many new entrants don't understand the key to success: volume. “I didn’t fully appreciate that going in” Thomas said. “While one deal closes, you’ll be working on three others, he said. "And it’s all about margin – doing more with fewer people. That wears on you.”

‘Pitching sucks’: If you want to be stimulated at work, make sure you are executing on live deals, not just pitching, Thomas advises. “Pitching sucks. If they say that is the majority of the job, be very, very weary,” he said. “Make sure you get deal exposure.

Culture hasn’t changed: Despite the rhetoric, investment banking is still a bit of a boy’s club. "You can get away with a lot more than in other corporate environments,” Thomas said.

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