Morning Coffee: Earning $1m as an investment banker is now too much of a long shot

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Is working in investment banking worth it anymore? The eight years from 2000-2008, when it was relatively easy to earn seven figure bonuses and retire before you hit 35, are the anomalies. Bankers these days have to work just as hard, the job prospects just as cut-throat, but the prospect of riches is being replaced with mere high salaries.

Those entering the industry today are increasingly viewing their banking job as a training ground to move on to other ventures – whether that’s a start-up or a private equity job – but as the FT points out today, these are not just the people the banks need to be worried about. Yes, the lack of liquidity at the top of the pile means that few banks will sweat an exit of MDs, but it’s those in their mid-careers (the miserable VPs or directors, perhaps) who are realising that the work will never let up and the pay really isn’t that great.

“I think we misdiagnosed the problem,” one banker told the newspaper. “It’s not that the junior guys are working too much. It’s that the value proposition changed.”

In other words, you may have little life outside work, but at least in the old days you were earning a lot of money. Earning your first $1m by the time you hit 30 is too much of a long shot, these days – you’ll have to content yourself with a pay check running into the hundreds of thousands.

“It’s a terrible time to be a banker,” says the senior banker. “You are on the road three days a week. You are getting paid substantially less than you were getting paid five years ago.”


Royal Bank of Scotland is considering offloading the foreign operations of its private bank Coutts to focus purely on the UK. (Bloomberg)

It’s also working in a considerably smaller office in Hong Kong (Bloomberg)

European investment banks may have had a good second quarter, but the surge in bond issuance that helped sustain revenues has already waned in July. (Wall Street Journal)

JPMorgan has two bidders as it looks to offload half of its private equity portfolio (Telegraph)

Austin Beutner, co-founder of Evercore and former partner at Blackstone Partners, is the new chief executive of the Los Angeles Times. (Dealbook)

Boutiques are grabbing market share and employees from larger players in everything from investment banking to wealth management. (Financial Times)

Hedge fund manager living in a house rented from a former Wonder-Bra model is suing her because he claims he couldn’t use the basement and the garden was infested with vermin. (Dealbreaker)

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