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Investment Banking vs. Consulting

Anonymous A

Hi everyone,

My question is: "what is the difference between the actual work that you do as a consultant as compared to an investment banker?" Due to my non-business background I don't have a full picture about investment banking. I have been focusing on consulting for a year or so, so I know a lot about it. However, recently I became interested in investment banking and from reading a couple of websites it seems to me that what they do is exactly the same as consultants but just more narrow in the sense that it's more focussed on the financial side.

Once again, the question is mainly about the actual work (how big are the teams, who is usually on the team, what do you actually do, do you do it in the office or at client's location, how long are the projects, what's the client exposure for juniors etc.) and not about differences in salary or workload, although if you don't mind typing, this information would also be appreciated.

Thank you!

Elias
Expert
replied on September 12, 2016
Experienced consultant, now running own consulting business

Hi there,

I hope this answer is still relevant for you.

Maybe one thing to clarify: From what I read you mean investment banking = M&A. Because there are loads of investment bankes (equity analysts, traders, brokers, derivatives sales...) whose work has absolutely nothing to do with what consultants do.

So if we assume that this is the case, I believe that you are right in terms of certain similarities between the jobs. However, as you ahve correctly pointed out, there are a lot of differences as well.

As you noted, the I-Bankers tend to be very focused on the financial side of things, while as a consultant some other aspects might be important as well. However, I have tons of respect for IB research & analyst teams. Their reports are incredibly detailed and quite often show a level of understanding of an industry and things like production processes that you rarely find in consulting firms.

But here to some more differences:

  • As a consultant, especially relatively early on in your career, you'll get a lot more client exposure, as you are dealing with client people on a daily basis
  • A lot more of your work will be on-site at the client
  • You'll have a lot more variation in your work - one day you might be doing a network outsourcing deal for a mobile carrier, your next project might be a strategy project in a totally different industry
  • You'll more quickly move into a leadership role, taking responsibility for larger chunks of your project and the people that come with it
  • Regarding team sized and project duration, I think the picture is more mixed than in Banking. While you have long M&A processes with realtively large teams, I believe a transaction that drags on for one year and occupies 15 people is a lot rarer in a bank than a multi-year projcet with 20, 30or 50 consultants.

Hope that helps!