Eight things you’ll miss if you quit investment banking

When you’re mired in spreadsheets for 14 hours a day, the prospect of ditching banking for something entirely new is as refreshing as jumping into a fresh, crisp swimming pool. But it can be a leap into the unknown.

Like it or not, investment banks are high-paying, prestigious institutions that hundreds of thousand of people try to break into every year. Leave it behind, and you might regret it. Here, according to former traders and bankers, is what you’ll miss when you quit banking.

1. The money

OK, this is an obvious one. Investment banks still pay well, even if you’re not going to retire at 30. The best paying investment banks in London pay their managing directors £920k ($1.15m) a year. Try getting that sort of pay outside of the executive suite in another industry. Good luck.

“I realise that I’ll never have another job that will offer me such an big, regular salary and bonus,” says one former Goldman Sachs MD who now runs a fintech firm.

2. The ‘golden cage’

Junior bankers with first class degrees from top universities complain about the menial work at investment banks, but the infrastructure there is set up to ensure the only tasks you ever do are core to your job, says Tobias Taupitz, a former associate in FIG M&A at Barclays who left last year to start his own insurance firm Insure-A-Thing.

“You get free food, a team to put together PowerPoint presentations for you, it’s all convenient and set up to keep you focused. It’s a golden cage. I’d love to have it here now, but there’s a price to pay. I still think I got out of banking at the right time,” he says.

3. The ‘extrinsic validation’

You’re surrounded by prestige, so even when you question your own motivation, the environment convinces you that you’re in the right place, says Rehan Islam, a former Goldman Sachs trader and a rapper who is now launching a VC fund called E2Exchange.

“Even on your worst days in investment banking you may find yourself reassured about your life and career by the prestige around the Square Mile, the fact that most people come from top universities, and the higher than average pay,” he says. “Outside of the City, when things are tough you have to remind yourself why you left in the first place because your motivators aren't as immediately visible.”

4. The intelligence

Imagine having to deal with people who didn’t go to an Ivy League or top university. Just imagine it. “At Goldman, I only had to deal with people who were smart and driven. In the outside world, I have to deal with all sorts of people, many of whom are neither smart, nor driven,” says the former Goldman MD.

“I was constantly challenged by people way smarter than me. It kept me on my toes and inspired my curiosity to explore subject matters beyond finance,” adds Graham Ward, the former co-head of Goldman Sachs’ European equity business and adjunct professor of leadership at INSEAD.

5. The energy

Investment banking is cut-throat, but this means that only the best survive, and this sort of environment is energising, says Ward.

“In banking it was up or out. People were focused and engaged. Elsewhere, there are often a lot of passengers or even dead wood,” he says.

6. The detachment

No matter how passionate you claim to be about banking, it’s still just a job. If you’re running your own firm, you're going to much more emotionally engaged. Reto Bollinger left Goldman Sachs last year to launch a music start-up called Hypesong. There were two people running it, and arguments over decision-making often led to stalemates, he says.

“Given everyone has a lot of skin in the game, backing down from your point is not always easy if you believe your view is the right one,” he said. “I under-estimated the difficulties of team dynamics and I could imagine that’s a common mistake. Right now, there are three of us, the responsibilities are clearer and being an uneven number makes important decisions a lot easier.”

7. The dynamism

Investment banks are accused of being both hierarchical and political places to work. But, says Ward, they things get done. “In banking decisions were fast and businesses were agile. Bureaucracy was limited. In the corporate world outside banking, the pace slows to glacial at times. There is too much talking and not enough action.”

8. The ‘bants’

Trading floors are smaller and quieter than they used to be, but there’s still a lot of energy, joking around and camaraderie says one former trading MD who now runs a fintech firm. “Right now, I spend most of the time alone in my house,” he says. “If I want a more energetic place to work, I go to a café or a shared working space. I miss the banter of the trading floor.”

Contact: pclarke@efinancialcareers.com

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