Consulting and investment banking: two highly competitive professions; both excellent options for ambitious, high-performing individuals.
Choosing between these two potential career paths can be difficult, however, especially as there are a number of commonalities between both roles and the skills required to perform them.
We spoke to someone who had worked in both professions to get his take on the two industries and the pros and cons of both. A graduate from Germany’s WHU University, Philipp Leising spent three years as a management consultant before joining Morgan Stanley in 2006. He is now an Executive Director within the firm’s Investment Banking Division in Frankfurt, with a focus on financial advisory.
“A number of things attracted me to consulting. Above all, it was the opportunity to gain an insight into different industries and corporate functions and experience working with a range of companies. As a consultant you’re working closely with employees at these firms, learning their business and how they actually operate.
“After university I applied for the graduate scheme at a leading multinational strategy consulting firm in Germany. I spent three years there and worked on a total of more than ten projects with a wide variety of clients. The projects ranged from market entry strategies over R&D portfolio reviews to cost cutting and organisational restructurings.
“I had a great time as a consultant. It gave me an excellent grounding in business and the commercial awareness I had been looking for. I’ll always look back on it as a really valuable experience.”
Why and how I switched
“I hadn’t had much exposure to the financial sector or paid much attention to investment banking as a potential career path. However, I had the opportunity to work alongside a private equity firm on a commercial due diligence project in 2004. I found the experience and the exposure to finance extremely interesting and it got me thinking about how I might explore this further.
“My firm offered a sabbatical program to support employees who wanted to go back to university to study for a Masters or a PhD. I applied via the scheme for a Masters in Finance at London Business School and was offered a place on the course in 2005.
“I had originally planned to return to the company after completing my Masters, however, the more I learnt about the banking industry and finance, the more curious I became and the more I came to realise that this was where I want to be in terms of my long-term career.
“I applied to Morgan Stanley and was made an offer for an Associate role in London. It took me quite some time to make the final decision to leave my former employer, but with hindsight it was one of the best decisions I have taken so far.”
Comparing the two professions
“There is a lot of crossover between roles in consulting and investment banking, especially at a junior level.
“In both professions you are acting as an advisor; your objective is to provide the best possible advice to your client. You’ll be working as part of a team whose job it is to help the client to make a decision and then implement it.
“As an investment banking analyst or junior consultant, a lot of the work involves structuring and analysing data to identify problems and come up with potential solutions.
“The skill sets involved in both jobs are fairly similar; it’s really just the focus of the work you’re doing that’s different. Consulting can be quite broad and operations focused – you’re working with companies to improve the operating performance or to restructure various parts of their business.
“In investment banking your work is generally focused on financial analysis, corporate finance and the capital markets. You really develop an in-depth expertise in these specific areas over time.
“While consulting is clearly a multifaceted role, the downside is that it can be quite a gradual process. Sometimes companies will implement your ideas over a period of months or years and it’s a while before you start seeing the impact of your work. In some instances you will not see an impact at all.
“Investment banking, M&A in particular, is a very tangible business. If you advise on a public take-over or the listing of a company on the stock market– the results come quickly and they’re clear to see. The whole structure and future of the business is changing right before your eyes and over a very short period of time.”
Which are you better suited to?
“While I would never say consulting isn’t a great profession, I certainly have no regrets about the career choices I’ve made. I have a passion for finance that would make it difficult for me to go back to my former career.
“Investment banking is a fast-paced business, which suits the way I like to work. Things tend to move faster here than in other industries.
“As an analyst, this means you’re typically working on several different projects at any one time and juggling a range of different issues.
“As you progress, you start to have access to the key decision makers and stake-holders, people who are involved in deciding the financial future of their companies. You’re working on deals that appear on the front page of the newspapers and might be game-changing for the positioning of a company vis-à-vis their competition.
“In many cases, you will actually have a more direct impact on the strategy of a company than a strategy consultant.”
Which path should graduates take?
“If you have the right blend of analytical skills and commercial acumen, it’s quite possible that you could thrive in either a consulting or investment banking role.
“The decision you make is likely to come to whether you have a genuine interest in finance and can see yourself being passionate about the industry. You need this if you’re going to be working in a corporate finance environment.
“You also need to pay some thought to your longer-term career ambitions and what you want to take from your first few years in employment.
“A graduate position in investment banking will give you a unique level of exposure to the financial markets. You’ll be honing your skills and building up lots of experience within this specific area and this will open doors to other areas of finance.
“The level of learning and development that takes place in consulting roles tends to be quite different. It’s a more generalist role – you’ll be seeing businesses from a wider perspective, your experience is broader and this means developing strengths across different areas and on a rather conceptual level.
“Before committing to any profession, my advice would always be to try and see the industry from the inside. If you’re choosing between consulting and investment banking, you should aim to do an internship in both and see where you feel the most comfortable.
“At the end of the day, what really matters is the environment you’re working in and whether you click with the people there. If you find this, you’ve probably found the right career for you."