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What People Get Wrong About Banking vs. Consulting Careers

Updated: Sep 22, 2019

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Should you choose banking or consulting as a career? And if you're in banking already, should you quit for a career in consulting? 


I did the latter. After a career in equity research, I joined one of the MBB consulting firms.  I have no regrets, but there are certainly a few things I would have liked to know beforehand - like the hours in consulting. If you're choosing between the two industries, I've outlined the mistaken preconceptions and similarities and differences I've experienced below.  


Consultants don't go home at 7pm Almost Never...

Consultants have much better work life balance than Sell-Side Equity Research, right? You might be up for a surprise!


70+ hour weeks in top consulting firms are actually more of a norm than an exception. As a consultant you will be at the client’s offices from Mondays through Thursdays. When your client is leaving at 6pm you’ll relocate to your firm’s local offices or the hotel to get more work done, rarely being done before 10/11pm.  Also, you’ll likely have to work while traveling home on Thursdays. Learn more about Consulting hours here.


In Equity Research, by comparison, weekly hours will be around 60-65h and more predictable. However, you’ll need to enjoy the mornings. 6:30-7am is not an unusual start time – thanks to the pre-market news flow. On the plus side you’ll be working more in sync with market hours and thus rarely be kept in the office after 8pm.


Surprisingly, then, if you value work-life balance you should probably choose Equity Research The good news is that neither of these roles should require you to work weekends.


Consulting Pays Really Well - Think Twice!


Pay in Equity Research varies a lot depending on your team’s performance, the size of your firm and your performance. But generally for analysts and associates in equity research, bonuses of 50 to 80% of your base salary are not unheard of.


By comparison, consultants’ total compensation tends to be lower, and I think this is especially true in Europe. Also, consulting bonuses are generally around 10-15% of your base.


If compensation is a key motivating factor for you, better shoot for Equity Research then.


Consulting isn't hierarchical?


As an Associate in Consulting you’ll work closely with a project leader. You will also interact with the Partner(s) on your project through conference calls or face-to-face meetings. Those interactions tend NOT to be risk-free but rather perpetual assessments that will affect your evaluation.


By comparison, equity Research tends to be less hierarchical. Your MD will likely sit right next to you allowing for more informal interactions. Also, in Equity Research your evaluation will depend much more on the input from the people you work with on a daily basis.


In consulting, Partners are often asked to provide feedback even if they’ve only been on a single call with you. On the plus side, Consulting allows you to be more diversified as you work on many different projects at once.


Consultants Travel In Style


Let’s face it, banking – especially in Europe – is not getting any better and neither is Equity Research. With the introduction of Mifid II and passive investing on the rise, fees have come under pressure. If you decide to move into Equity Research in Europe, be prepared for headwinds such as travel restrictions and even salary freezes.


By comparison, Consulting is growing in heaps. This means you may be promoted at a faster pace than in Equity Research. Also, you won’t have to worry much about raises. Those will occur automatically as you move up the latter. While Research costs are being squeezed as a Consultant you will likely travel in style, earn airline-miles and stay at nice hotels. Also, you’ll more frequently attend client dinners at fancy restaurants.


Consultants are industry specialists 


You might think that consultants specialize in one industry, and that this can be limiting.


They do, over time but early in your career as a consultant you will be a generalist and thus have a much broader range of exit opportunities than most finance jobs. Most exits from consulting take place into business development and strategy roles at large corporates, followed by start-ups and private equity.


In Equity Research, by comparison, you’ll be much more restrained with mutual funds, hedge funds, investor relations roles being the most frequent routes. If you want to keep your options wide open and are considering private equity then better choose Consulting.


My decision making guide:


Choose equity research over consulting if:

  1. You are analytical and passionate about the stock market and investing and see yourself working at mutual fund or hedge fund for the long haul.

  2. You don’t mind the early mornings and you like working in an established team.

  3. The level of compensation is very important to you.

Choose consulting over equity research if:

  1. You want to be exposed to different industries and want to work in different team- and client settings

  2. You enjoy traveling

  3. You value the exit opportunities: Many prestigious private equity firms hire consultants. PE firm Hellman and Friedman for instance has a hired a number of associates from consulting in the past












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