The five-year anniversary of the
collapse of Lehman Brothers has led many in the industry to look back and reflect
at the events that took place around that time and what has changed since.
Recently among those of us that were in the market at the time, these types of
secular changes and the question of "why investment banking careers"
have naturally been a major talking point.
One funny person remarked that five
years ago, people were saying "we're all going to lose our jobs",
whereas now everyone is saying "we're all going to leave our jobs".
Yes, it was funny. It was funny
because it reflects the situation that a number of seasoned bankers are now
faced with. In today's environment, most work longer and harder, in more
challenging market conditions than before, face far tougher capital and
regulatory requirements. They also enjoy fewer perks of being in the job, take
home less pay than previously and to top it off, in many jurisdictions they pay
a higher rate of tax on what they do take home. These things are leaving us to
question what we all should be doing.
Apples to apples
But all of this needs to be put into
some sort of perspective. Pre-crisis comparisons look pretty unfavourable in
most industries. Careers in investment banking and financial markets remain
attractive and rewarding in absolute and relative terms, and are likely to
continue to be for the foreseeable future.
Moreover, the situation for
investment banking graduates, relative to those in other industries, is even
more attractive. Compared to more senior positions, the declines in
compensation have been for less pronounced. As an analyst your income will
still be higher than many of your classmates, your bonus will still mostly be
in cash and despite overall job cuts, the street is still showing its desire to
keep the young blood walking through the door.
With this in mind, it's important
not to approach your job search half-heartedly. Since investment banking
remains an attractive career, you should ensure that you commit fully to it and
try as hard as possible to get an edge over other candidates. The early you
start preparing, the more of an edge you will be able to gain.
What will my friends think?
But what about how becoming a banker
will be perceived by others? A number of students we've spoken to are concerned
by this. We really wouldn't worry. All of us have many friends outside the
industry, and frequently meet new people from other walks of life on a regular
basis. To be honest, our profession has never really been an issue. The
majority of people are curious about banking and financial markets, reflecting
the general lack of comprehension by the wider public of what happens there and
what working in investment banking is actually like.
Besides, do you really want to
associate with people that judge by your occupation anyway? Of course, some
banter is inevitable, and if you don't have a sense of humour then an
investment bank is probably not the place for you to work.
Above all, make sure that you research
thoroughly. network effectively and prepare adequately for interviews. You need
guidance from people who've been there and done it. It's also important to keep
abreast of developments in financial markets. A number of years ago we were in
the position of having to find jobs. Through effective networking and
preparation we were able to secure multiple front office offers between us, and
still highly recommend investment banking and financial markets as a career
choice.
