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Meet the 20-somethings willing to work in IBD without a salary

When you intern in an investment banking division (IBD), you're usually paid handsomely. Admittedly, you won't earn as much as if you intern with a tech firm, but you'll still earn £50k ($65k+) on a pro-rated basis for the 10 weeks you're around over the summer. If you then join a major bank as a full time analyst after graduation you could earn even more: recruitment firm Dartmouth Partners puts first year compensation for M&A analysts in London at £65k+ ($85k+).

There are exceptions though. - As we noted previously, if you join U.S. corporate finance boutique Tobin & Co. either full time as an analyst or short term as an intern, you won't be paid a salary at all. You'll get your lunch, you'll get a housing stipend, and you'll get a small bonus (if you perform). You'll also get to work closely with Justine Tobin, a former BofA managing director and Goldman Sachs associate. But if you work for Tobin, a salary is not on the table.

This seems a bit unfair. However, the 20-somethings who've been there and done it say it's all fine: when you're trying to break into banking, money isn't important. Experience is.

"I would actively choose the same path again," says one former Tobin analyst who asked to remain anonymous after working (salary-free) for an entire year before landing a job in corporate development with a tech firm. "I did apply to other companies first, primarily in the investment banking space, with no success," he explains, adding that the year at Tobin helped mitigate the fact that he both came from a non-target school and hadn't completed any internships while he was there. In the circumstances, he says his the only options were working for nothing at Tobin or paying tens of thousands to study an MBA or Masters in Finance on the off-chance this would lead to a big bank. Tobin & Co. seemed the better route.

Other ex-Tobinites are similarly affirming. "Before I applied to Tobin & Co., I was already out of undergrad for over a year and working in a full-time role at a company outside of the financial services industry," says a former analyst who went without a salary at Tobin for over 12 months and now works in investment management. During his time at Tobin, he says he got to work as the lead analyst on a 409a valuation for a private software company. This meant liaising with the CFO on due diligence, developing a financial model, researching comparables and precedents and assembling a detailed report on the valuation.

Other analysts report helping a high net worth client buy a food manufacturing company or preparing pitch-books for potential clients. - Basically, working in M&A, but for free.

How do people live whilst working at Tobin? Ex-juniors report spending their savings, staying with their parents or taking second jobs on the side. "I worked part-time at a local golf course for some extra pocket change," admits one.

Nonetheless, the juniors we spoke to who've been there and done it, thought Tobin's unpaid program is the best and most cost effective way of breaking into a hugely competitive industry. Despite the lack of salary, the Tobin program is hugely over-subscribed with 10 times as many applicants as places, but this is nothing compared to the 50 or so people who apply for each student position at Goldman Sachs.

"At the end of the day, I was able to develop skills that helped me land my first salaried banking positions," says one ex-Tobin analyst of his time there. "- A fair amount of the internships out there are unpaid and that is just what is necessary in order to obtain the required experience."


Photo credit: suited & booted by Jessica C is licensed under CC BY 2.0.

AUTHORSarah Butcher Global Editor

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