The hoo-hah surrounding investment banking (2 Viewers)

[trishan]

There's no doubt about it, for those people with high ambitions of earning $70K+ first year out of uni and 200K+ thereafter, investment banking is the way to go; so we are told. "Do a comm/law degree with honours in finance and make sure to get a D+ average and you're garunteed to rake in the big bucks"

So, investment banking is the path to financial success with a little hard work? "Don't worry about the long hours, you can retire when you're 50."

Commerce graduates can look forward to best starting salaries
The Australian Financial Review, 17 November 2006, reported the findings of the latest Australian Association of Graduate Employers (AAGE) recruitment survey.

The news is good for graduates entering the employment market this year. They will enjoy graduate salaries and incentives on average 6% better than last year’s graduates. The strong economy has also led to more graduate level positions being available than ever before.

The expected starting salaries for commerce graduates are listed below. Commerce graduates from the University of Melbourne enjoy graduate salaries above the national average in their fields.

Investment Banking 71,400
Marketing $45,700
Human Resources $45,700
Retail Management $47,00
Finance 47,000
General Management $45,300
Accounting $42,600

I listen to this advice and wonder if the future job prospects of the evidently over-glorified occupation of investment banking is indeed how it is made out to be. As I explain to my friend what investment banking is all about, I get hit with the question: "Is it safe in the long term?" I am forced to question if the opportunity will still be there in say 10 years time for a comm/law student to get a financially stable and secure job.

Will the market be volatile? Will there be investment banking jobs? Will investment bankers be around in 10 years time or replaced by smart computers without a comm/law degree, but with the ability to render investment bankers redundant? Such questions plague me as I consider future career paths.

I draw your attention to the IT boom. There was once a time when the info tech industry was booming. Employers were paying large amounts of money to recruit graduates, offering large salaries and extra benefits. With this boom came a stampede of undergrads heading into IT courses at uni. The choice to do so for some was incredibly profitable. However as time passed, the demand for IT staff decreased, leaving thousands of qualified IT staff without jobs, faced with bills to pay and an insecure future.

It doesn't seem too farfetched to me that investment banking could follow this model. There is a great demand at the current time for investment bankers, but in 10 years time will there still be this demand? Or will there be an excess of qualified investment bankers faced with limited job opportunity?

Now the ball is in your court. How do you feel about the security of careers in investment banking? Do you have anwers to the questions above or perhaps comments that may aid in answering these questions? Do you share the same feeling of uncertainty?

 

[synthesized]

"Do a comm/law degree with honours in finance and make sure to get a D+ average"

you answered your own question - employers already require a level of talent and dedication and type of work ethic that is, i think it is safe to assume, held by only a small proportion of the population.

so my view is that emplyment prospects in IB won't change much, since the skills needed aren't as easy to gain as the skills used in, say, the IT industry.

a lot of people probably look at what you need to learn to be an investment banker and decide that it's more trouble than it's worth....

so i doubt there would ever be a huge oversupply of commerce grads like there was for IT.

 

[ND]

71K? Hahah where do they get these figures from? I doubt you'd find any first years in IB willing to get out of bed for 71K.

And retiring at 50? I can count the people aged above 40 at my IB on one hand.

 

[juzmister]

Wow the picture of IB this place paints...I have a friend at DB, she just completed their training program- no joke, 19 hour days...There will always be a need for good investment skills, let's see two computers chipping and negotiating. There is money everywhere at the moment, and it looks set to continue with the huge increases in superannuation and personal investment. IB's seem like a great place to learn about the business world and I don't think good business skills will ever be of no use. If you want to be 100% certain, do a trade?

 

[kunny funt]

This is from another forum in the US. its probably similar in australia.

iBanker:
Plus: You'll make twice as much your first year, 3 times as much your second, etc. -much higher pay increases due to bonuses. This is the main advantage.

Minus: You'll work twice as much your first year (literally), 3 times as much your second, then it may taper off to just 70 hours a week. Job security is literally a common joke in the office, if you screw up a billion dollar deal - you will probably get fired. If not, you'll definitely get fired the second time you do it.

Plus: It is a faster tract. If you don't get fired or have a breakdown, you will be a trader/banker in a 3 or 4 years and be near management positions.

Minus: Higher firing rate, you're dealing with other blood thirsty people that will kill you to get the VP spot instead of you. You also lose 3-4 years of your life to work.

Everyone in my social circle (besides myself) is an iBanker. They range from actual bankers to structurers to traders, but iBanker is the general term. Here are the differences between our jobs on a day-to-day basis:
1) Hours. If I'm not studying for an exam, I generally get home at 6. I relax and have dinner then go work out and get a full night's rest. They work until 8 and we play basketball, then they go back into the office until 12 or 1. They get home at 1 or 2 and sleep until 6 or 7, then back to work.
2) You're on call 24/7. They all have to forward their work phone to their cell phone. We've been on vacation and had to drop everything and drive back 6 hours because a deal fell through. You are completely unreliable - want to have dinner with your g/f tonight? You may get called in the middle to come back into the office, no questions asked - you're going to do it.
3) Stress. If I can't get something out by Friday, it's generally okay unless it's a government thing. If they can't, they work 72 hours straight to get it done ASAP. The whole time they are getting screamed and cursed at by the higher ups who have only stopped by their desk twice in their career - to either yell at them or fire the guy in the cube next door.
4) Lifestyle. You work constantly, we always use the term "work hard, play hard". When going out, they go out as hard as possible - they never have any other chance to spend their cash. A lot of people find this this part the hardest to keep in check. I know 2 analysts that have quit because they couldn't keep up with playing hard and working hard. If you stay home, you won't be part of the group and you will not be picked up at the end of your group rotation (i.e. fired).
5) Family/Friends. This is the part that is overlooked the most. You don't see your family, you don't see your friends outside of friends from work. You may get to go home for Thanksgiving for a day - or you might get called in on your way home. Imagine leaving a vacation to go back to work - it absolutely enrages the people you're with.

So if you can take the hours and the stress, go for it - you'll find the slower pace of actuarial work less enthusing.

I will say that, in the first few years, iBanking is pretty attractive. You make good money and you don't work much more than the average student works/studies a few months a year. Your hourly wage is laughable - plumbers make more.

Just my experiences with bankers thus far, thought this may be useful.

 

[ace]

Wow the picture of IB this place paints...I have a friend at DB, she just completed their training program- no joke, 19 hour days...There will always be a need for good investment skills, let's see two computers chipping and negotiating. There is money everywhere at the moment, and it looks set to continue with the huge increases in superannuation and personal investment. IB's seem like a great place to learn about the business world and I don't think good business skills will ever be of no use. If you want to be 100% certain, do a trade?

You gotta be in it to win it. If it's too hard, tell you friend to QUIT, others will gladly take her place.

 

[Conspirocy]

hahaha hoo-haa :rofl:

 

[Conspirocy]

a lot of people probably look at what you need to learn to be an investment banker and decide that it's more trouble than it's worth....

agreed

im doing com/eco i'll be pretty much finishing up my acct and eco majors...ive got a choice of doing a finance major and pushing for IB...but who can be stuffed

 

[turtleface]

This is from another forum in the US. its probably similar in australia.

One of the best posts I've read on Ibanking for a long time

I guess the bottom line is Investment banking is more a lifestyle than a job. 2-3X the salary with 2-3X the hours Its ok if you're like 18 years old and have nothing better to do, but as a young man starting relationships/family etc. Investment banking is just not viable for many people. (I say man cause I don't know many women Ibankers...actually...zero)

 

[juzmister]

One of the best posts I've read on Ibanking for a long time

I guess the bottom line is Investment banking is more a lifestyle than a job. 2-3X the salary with 2-3X the hours Its ok if you're like 18 years old and have nothing better to do, but as a young man starting relationships/family etc. Investment banking is just not viable for many people. (I say man cause I don't know many women Ibankers...actually...zero)

I know a bunch of female IB's, heh very motivated girls. The person I was speaking of before loves her job, the point I was making was that IB's have long hours.

 

[lizbon]

One of the best posts I've read on Ibanking for a long time

I guess the bottom line is Investment banking is more a lifestyle than a job. 2-3X the salary with 2-3X the hours Its ok if you're like 18 years old and have nothing better to do, but as a young man starting relationships/family etc. Investment banking is just not viable for many people. (I say man cause I don't know many women Ibankers...actually...zero)

totally agree, it's a lifestyle decision (providing that you're good enough to get an IB job). If you're looking for a challenge and willing to sacrifice ur 20's for financial stability (and potentially making some very good industry contacts) , IB is wise career path.

 

[seremify007]

Is it just me or do alot of people who dream of IB not realise that whilst there may be some success stories for a few; there are also people who burn out very quickly and end up becoming unemployed for considerable lengths of time. Sure this is possibly just another hypothetical, but it's something which I don't think many people consider when they go "oh look $70k salary for grads.. here i come easy life with early retirement".

 

[Minai]

Christ that's pretty bleak (the quote from the US guy)..

Personally, I don't think an extra 30-40k on what I'm earning would make me wan't to sacrifice my personal life/weekends/nights. It's not worth it to me. (Assuming I was "good" enough to be an IB'er in the first place).

But hey, those young, rich CEO's have to come from somewhere!

 

[jpr333]

35 year old ib'er i know is on 800 000 a year base salary... Is that incentive enough? (Seriously i dunno it's a massive call).

IB'ing is a fickle industry, moves with the economic swings in a more exagerated sense i believe.. The first thing to go is the boats...

 

[sickone]

can u get into IB with just a commerce degree instead of comm/law.

 

[turtleface]

35 year old ib'er i know is on 800 000 a year base salary... Is that incentive enough? (Seriously i dunno it's a massive call).

IB'ing is a fickle industry, moves with the economic swings in a more exagerated sense i believe.. The first thing to go is the boats...

During the 90's recession I believe the top tier culled 2/3 of their staff.

can u get into IB with just a commerce degree instead of comm/law.

yes, hell you can get into IB with an arts degree. They teach you how to use excel and VB etc later on

 

[ks21]

Some IB firms, I have been told, have a strict policy on only considering those with double degrees / honours students (degree is not overly important, but they look for experience). Law/comm students thus have better chance than plain commerce students. Either way, you still have to be a exceptional candidate, high WAM, lots of extracurricular, leadership, etc.

 

[trishan]

Some IB firms, I have been told, have a strict policy on only considering those with double degrees / honours students (degree is not overly important, but they look for experience). Law/comm students thus have better chance than plain commerce students. Either way, you still have to be a exceptional candidate, high WAM, lots of extracurricular, leadership, etc.

Speaking of exceptional students, have a look at Melbourne Uni's, Leng Lee, Victoria's latest Rhodes scholar and possible I-Banker.

Rhodes Scholar can see the funny side of life
Media Release, Thursday 2 November 2006


A University of Melbourne student who performs stand-up comedy in his spare time has won the prestigious 2006 Victorian Rhodes Scholarship.

Leng Lee, in his final year of a University of Melbourne Bachelor of Laws/ Bachelor of Commerce (Hons) degree, will travel to the United Kingdom next year to begin a Doctorate in Economic Geography at Oxford University.

Mr Lee is an outstanding student, keen sportsman and community volunteer, and was also a runner-up in the 2006 Campus Comedy State Final.

While he has supported internationally renowned funny men Hung Le and Greg Fleet in the comedy arena, he will use his time in the UK for a more serious pursuit – researching geographical patterns of economic growth in China and the Asia-Pacific region.

“China is very important to Australia, and the Asia-Pacific region generally, so a greater understanding of economic changes and outlooks in that country is really important,” Mr Lee said.

“On returning to Australia, I would like to work in foreign policy, or maybe in politics, to further define Australia’s place in the region. I’m hoping a few jokes along the way will help.”

Mr Lee was born in Malaysia in 1981 and arrived in Australia in 1987. After winning a scholarship to Haileybury College, he excelled in academic studies (finishing 7th in the State after VCE) as well as leading the school’s Firsts hockey, volleyball and debating teams. He has continued his enjoyment of athletic pursuits, playing squash and running a number of half marathons.

At the University of Melbourne, Mr Lee pursued a diverse study load, concurrently undertaking a Diploma of Arts (History and Political Science) with his Commerce and Law degrees.

He has also taken work experience in the Department of Premier and Cabinet, at top-tier law and accounting firms, as well as for the Joint Economic Committee of the United States Congress.

During his time at Melbourne, Mr Lee took up variety of tutoring roles within the University, at Janet Clarke Hall -- where was a resident -- and in the community.

“My passion for teaching stems from my belief in education as the key to future opportunity. I’ve been extremely fortunate to have had some outstanding teachers over the years, and I hope to pay respect to their work,” Mr Lee said.

“I provide drama lessons and homework support for young people within the YMCA. A lot of our students are recent migrants from the Horn of Africa. Their English skills are limited, so I think it is especially important that the system caters for their needs.”

The Victorian Rhodes Scholarship is one of the most prestigious scholarships provided students.

This year thirty-six applications were received from all major Victorian universities and the Rhodes Scholarship Selection Committee for Victoria interviewed eight candidates before narrowing the field to four.

The final four candidates were all University of Melbourne students and outstanding young people with excellent academic, sporting and community service records.


About the Rhodes Scholarship:

The Victorian Rhodes Scholarship is awarded annually to a young scholar between the age of 18 and 25, who shows high intellectual and academic ability, as well as an interest and involvement in the community. The successful applicant also demonstrates leadership qualities and sporting achievement.

The scholarship provides for further study at Oxford University in the United Kingdom for two years, with the possibility of extending for a third year. It covers tuition fees, a return airfare, and a living allowance.

Past Victorian Rhodes Scholars have included Sir Zelman Cowen and former Governor of Victoria, Sir James Gobbo.

I hope I can achieve just half of what he has achieved.

 

[turtleface]

Those guys are just crazy. I can't imagine how they achieve all that in such a short time frame. Mere mortals like us struggle to pass exams and these dudes are like doing all this sports and charity and stuff.

It sort of deters people like me from applying for rhodes because it seems the average uni bum hasn't got much of a chance. bloody elitist awards! still, i'm happy with where I am.

Edit: I just realised he'll be at Uni for 10 years!!! 5 years for Com/Law, 1 for the Com Honours, 1 for the Concurrent diploma of arts, 3 for the doctorate...I wonder what job he's aiming for with all that. IB would be too beneath him considering some get in with a 3 year degree, he would have wasted 7 years of his life

 

[jpr333]

Academic for shiz.