Growing number of junior bankers switching to MBB consultancies

07 September 2018 6 min. read

An increasing number of junior banking professionals are considering shifting to the world’s largest strategy consultancies, according to a number of young professionals in both sectors. MBB firms are benefitting from a perception in banking that junior staff have limited future career prospects, and are over-burdened by under-stimulating and repetitive work.

Jobs in banking and jobs in consulting have long been operating in close proximity to one another, particularly in the UK and US. With two of the global financial hubs being located there – in the shape of London and New York, respectively – the countries also host the two largest and most consulting industries on the face of the earth. As a result the two industries suffer from significant cross-over, particularly in terms of human resources.

With similar remits, both already attract highly driven people from elite universities, and both pay well in return for complex and diverse client work – though banking bonuses  are bigger over time. According to a growing number of consultants, however, while they might be less lucrative, jobs with consultancy firms have begun gaining the upper hand. After a few years in finance, a rising portion of junior bankers are mulling a shift of industry, and crossing over to consulting firms.

The shift itself is not always so complex either. Many consulting firms focus chiefly on providing advisory work to financial services firms, with a thriving industry for such an offering in the UK especially. Coupled with the image problem that hangs over the banking sector, with lucrative bonuses being paid out through-out the financial crisis and austerity years, despite the industry shouldering the majority of the blame for gambling the world into a recession, it is perhaps easy to see why someone would jump ship, so to speak.

Growing number of junior bankers switching to MBB consultanciesSpeaking to jobs site eFinancialCareers on the growing number of junior bankers switching to consulting, a London-based senior consultant, who works at one of the 'MBB' (McKinsey & Company, Bain & Company, Boston Consulting Group) top strategy consulting firms, said, "The number of CVs that I'm seeing from junior bankers has suddenly shot up in 2018. The CVs we got from bankers were relatively steady in 2016 and 2017, but this year the increase in banking CVs is very noticeable. It's almost as if, after years as being seen as a second choice career behind a full-blooded banking job, consulting is now seen as the better option."

A junior equities salesman at a Swiss bank in London added that the appeal of consulting for banking juniors comes down to two factors: job security and exit options. These two matters apply as much on the trading floor as in investment banking divisions, and according to the salesman, many people at the Swiss bank are looking around and wondering “how screwed they're going to be in a couple of years' time," as they worry about the longevity of their job in an investment bank when costs are being cut. This fear is especially pronounced in equities sales, where individuals do not feel they're developing a skill-set which will be usable later on. As a result, of 12 people who started five years ago in his graduate class, he says 10 have left, with the majority plumping for consulting roles.

Comparably, consulting work boasts a diverse and intense learning curve, where employees can be tasked with a multitude of different issues, any one of which could yield a pathway into a new and more exciting career. Many private and public organisations view consultants as appealing employees, partly due to their mix of functional skills (i.e. knowledge of branch/industry or analytic skills) and their personal skills (i.e. communication or management skills). Experienced consultants often leave the industry to work in corporations in a management function, for example. At the highest level, a partner at an advisory firm may even leave the industry to fill an executive role somewhere else.

This is something the London-based banking junior particularly subscribed to, stating, "It's different when you're somewhere like Bain. When you're at a consulting firm you build optionality into your career – you can always move into industry or into another role in consulting… You can see that people don't have 20 year careers in banking and that MiFID II is destroying a lot of sales jobs while banks are doing nothing to help mitigate the pain."

Staying away

While, again, bonuses at banking firms might add up to more over time, the solid income consulting provides is not to be scoffed at, while additionally those looking in see it as a route to a better work-life balance. This might sound odd to someone better acquainted to the industry, which is no stranger to an 80-hour week, however, in many cases, long hours are rewarded in the form of a variety of secondary benefits that stimulate the work-life balance of consultants, while top firms are increasingly ushering in new levels of flexibility to accommodate a more diverse business model. To this end, a professional in consulting might consider an available option like parental leave, working remotely, the possibility of taking a sabbatical, etc.

On top of this, junior bankers are cautioned against a grass is greener mentality, as consulting jobs do have one other huge factor which may drain away at a professional’s personal life: the travel. It is well known that consultancy features one of the highest proportions of work-oriented travel found in professional life, and coupled with hours which are actually relatively similar to banking, a shift of industry might not end up amounting to much in this regard. As a result, while consulting might give individuals an hour or two spare in the evenings, that time will often be spent in a hotel miles away from home, friends and family.

One senior MBB consultant, who was an associate at a US bank earlier in their career, said, "On average, up to Vice President equivalent level we do around 12-15 hours a day, no weekends… The pain point for us is travel. For example, I fly weekly from London to New York and there are others here who fly weekly, for months on end, between Sydney and LA."

To this extent, consulting and banking might be seen as being. Both might be best suited to a young person's interests, when they have minimal family ties and maximal ability to commit to work. The factor that seems to set them apart, is that consulting boasts the best opportunities to seek a career in another industry, before setting down roots.