Why should you choose Management Consulting over Investment Banking?
Two of the most prestigious career choices for business students.
Two of the highest-paying jobs.
Two lands of the smartest people.
Two places to forget about work-life balance.
Two career tracks that deeply transform you both personally and professionally.
Now landing a job in either one of them is already a dream for many, but if you are somewhat like me … you don’t want to let destiny control your future, and are really keen on finding the best career for you even if they are somehow identical, this article will be interesting!
Hello there, this is Kim Tran, a former McKinsey management consultant.
To be frank, I am not pretending to be objective because, from the bottom of my heart, I love management consulting. I will try to be as fact-based as possible, though some points might be quite biased. Anyway, let’s see it from my viewpoint as a management consultant.
#No.1: WHO WORKS LONGER HOURS?
Of course, investment bankers.
There are several sub-branches of investment banking which have varied working hours, but generally, management consulting has much more “friendly” hours.
On average, investment bankers clock in 80-100 hours per week … That means 14-16 hours per day and you often have to work on Saturday or Sunday. Don’t even think about work-life balance. There’s absolutely no life.
Management consultants clock in around 60 – 80 hours per week, depending on specific projects and situations. We rarely have to work on weekends, unless it’s a really demanding project.
The only minor downside of management consulting in term of hours is the … travelling. Most consultants have to work away from their base city up to 50% of the time throughout their career. You might think that’s exciting at first, but after a couple of months flying in and out every week, and burning your weekdays mostly in client’s offices, you might think those bankers are lucky dudes.
#No.2: WHO SPENDS MORE BRAINPOWER PER HOUR OF WORK?
I am not saying bankers are not as smart or anything of that matter… but usually consultants have to push their mind more, especially when structuring the analysis or dealing with clients. Whereas bankers spend more time on Excel modelling to the extent that it becomes a routine without having to “think” much.
I am sure most people who have worked both sides would agree with me on this.
#No.3: WHO MAKES MORE MONEY?
Average base salaries might be the same, but bankers usually have a generous bonus – around 50% or sometimes even double their annual income. While consultants might make up for having more benefits like travel allowances and health packages, bankers, in general, make more money, especially as your seniority increases.
Yet considering the amount of time they work, the income per hour of work of bankers is not that high, perhaps lower than that of consultants. They just make more money because they work more.
#No.4: WHO LEARNS MORE?
Both equally learned a lot, but I much prefer the type of learning management consulting offers.Being bankers help you become a master on the financial and the number aspect. Also, one big part of investment banking is exposure to business leaders and seeing how big merger & acquisition deals getting done but you don’t get to interact with them directly unless you’re a senior.
A consulting career gives you a more balanced skill set. Beside hard skills like making the great presentation, excel modelling, and analytical thinking, you also have the opportunity to interact frequently with CEO and senior executives. The view is very top-down and your work touches all functions and aspects of a business profoundly. That’s why no companies have created more Fortune-500 CEOs than McKinsey & Co., a leading management consulting firm.
Check out these two others videos on what consultants do on their job and what I myself learned during my time there.
#No.5: WHO HAS BETTER EXIT OPTION?
Alumni of McKinsey, Bain or BCG have much more flexibility and options, being finance, multinational company, high-level positions at client corporate, or even start-up. We have alumni doing a wide variety of interesting stuffs. Being an alumnus myself, each meeting with my former colleagues every year is so eye-opening. It’s fascinating how ex-consultants continue to grow and achieve amazing results in various fields.
For investment banking alumni, you might still be successful and make more money after a few years, but likely only within finance world.
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From my biased point of view, unless you really want to trade your youth and health making some quick money to repay your student loan, management consulting will give you a better work-life balance, well-rounded skill sets, and diversified exit options. If you’re still unsure whether it fits you, see this video on what a consultant does every day.
At MCP, we believe consulting is one of the best ways to jump-start your career and everybody can make it to consulting.