Now that most jobs in investment banks pay less than they did, but still require that people work as diligently as ever before, their appeal is waning. Everyone now knows that junior bankers work crazy hours and find it difficult to sustain the sorts of extra-curricular activities that got them their banking jobs in the first place. Everyone knows, or ought to know, that boutiques are particularly prone to slave-driving, that leaving accounting for a job in product control is not a route into M&A or equity research, and that saying you work in an investment bank is not a path to idolization by a non-banking peer group.
However, there are other jobs in finance which still carry a kudos arguably greater than they merit. These we have listed below. We're not saying you shouldn't aspire to them, we're just saying be aware - things are not as they seem.
1. Managing director in M&A
Everyone wants to be an managing director (MD) in M&A, don't they? Naturally, there's the money - which has in the past been exceptionally good and is still very generous. There's also the prestige of flying business class, of talking shop with CEOs and of having legions of analysts and associates under your command.
“Being an MD in M&A is interesting because you get to have discussions with high level clients about strategy. Your role is to give clients high level strategic advice, to generate ideas, think globally and to see things from all possible angles," says Ferdinand Petra, an affiliate professor of finance at HEC in Paris and former M&A banker at J.P. Morgan and Barclays.
So far, so exciting. But there's also a dark side to being an MD in M&A. The constant flying is bad for your health, the politics are intense, and the stress is as debilitating as ever. "My Wall Street was an endless-seeming succession of late nights, ruled by the demands of clients and bosses," wrote ex-J.P. Morgan MD William Cohan in an article for Bloomberg last year. Eternally travelling, Cohan said he lived in a "fugue state, rushing from one meeting to the next, constantly hoping a chief executive would pursue the deal I was advocating."
As analysts and associates have been empowered and awarded mandatory weekends off, the life of senior bankers has become more complex still. At Barclays, junior bankers are now able to report senior bankers who treat them badly. Emasculated senior bankers across the industry are complaining of the arrogance of their new analysts. Petra says politics are a downside to senior M&A positions everywhere: "At a senior level it becomes important not to just to do your job but to be seen to be doing your job internally. As a result, you will often travel a lot to meet clients, but you will also need to travel to meet colleagues in other offices."
2. Mid-ranking sales role for any vaguely vanilla product
Now is not the time to work in sales. As banks seek to cut costs and 'leverage' their investments in electronic trading systems, a growing proportion of customers are being steered towards direct market access systems which negate the need for human intervention and do away with sales staff.
Deutsche Bank is a case in point. In the UK, the German bank has encouraged low volume clients with simple demands to access the market directly and has employed 'low touch' traders and customer services professionals to deal with them in Birmingham. Banks like J.P. Morgan and Nomura are doing much the same (without moving staff to Birmingham). As a result, unless you have some important, 'high touch' clients, your sales job is now at risk. And getting assigned these high touch clients can be a political minefield.
"Since 2008, there's been less natural upwards movement in sales," says one ex-saleswoman from Goldman Sachs. "Senior people have therefore tended to hold onto their accounts rather to let them go – therefore it’s increasingly up to more junior people to build their own client base."
Building a client base from scratch is hard work. "Sales is about building a stronger client relationship than anyone else," says an equities headhunter, speaking on condition of anonymity. "You need to put the time in - take clients out in the evening, or take them out playing golf, skiing, or shooting at the weekend. It can be relentless."
Equally, if you land a new client, the amount of due diligence required to admit them as a potential counter-party can now be prohibitive. "In some cases, it took months," says the recently ex-Goldman saleswoman.
Structured product salespeople creating bespoke solutions are protected from the move away from 'low touch' clients because their clients are, by-definition, high-touch. However, they still face issues of internal politics and excessive admin.
3. Relationship management in private banking
OK, private banking isn't exactly investment banking, but it is a favourite escape route for people tired of investment banking careers. Except private banking isn't what it was. If anything, the pressure there is more intense than it is in M&A.
Firstly, relationship managers today are expected to bring in ridiculous amounts of assets. "I've had headhunters calling me telling me the client expects €100m of assets in the first year," says the private banker behind the Banker's Umbrella blog. "It's absurd. I've been around and I've never seen anyone do that."
Worse, following the recent scandals involving the private banks of HSBC and UBS, banks are under pressure to vet private clients heavily and to ensure everything's above board. "The amount of paperwork the client needs to fill out and will continue to fill out whenever they want to do something new is mind boggling," says Banker's Umbrella. He adds: "The onboarding/account opening process is long and hard on the client and is akin to an interrogation at Paddington Police Station. And starting your meeting with a potential client by saying "I don't want to do anything illegal," makes building trust a bit of a challenge."