Finance vs. Management Consulting
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- Äas pĆidĂĄn 30. 05. 2024
- đĄ Get the #1 Private Equity recruiting course, which comes with 3-statement LBO model tests, mega fund case studies, and headhunter coverage: bit.ly/PF-PrivateEquity
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Finance and consulting are among the two most popular business roles out of school. Both paths are highly coveted for their exit opportunities, salary potential, and exposure to business strategy. In this video, we'll explain what these paths commonly look like, how the salary trajectories differ, and what the exit opportunities are.
0:00 - Overview of Finance and Consulting
4:09 - Investment Banking vs. Consulting Salaries
6:28 - Optionality and Exit Opportunities
8:31 - Expected Value of Recruiting
Peak Frameworks is a business career prep service started by Matt Ting and Patrick Fong, who have each spent several years working in investment banking and private equity in New York and Silicon Valley. Matt and Patrick met at Evercore, a top tier investment bank, and over the years have tutored and coached dozens of candidates to land their dream business job.
Matt Ting: / matthewting
Patrick Fong (HBS 2021): / patrick-fong-0b773041
#InvestmentBanking #Consulting #PrivateEquity
Very interesting topic. I spent 5 years at McKinsey while my husband was at Goldman in New York đ This was often our weekend dinner conversation/ debate!
How is work life balance at McKinsey? Are the hours around 50ish per week? How much time do you get with your husband or to do other leisure/recreational things? Basically, how much of a life do you have outside of work lol
Iâve become super interested in consulting recently, and even more so after this video. So Iâm just doing my research as I enter my 3rd year of college
@@riyachhabra ok awesome awesome. Ya I def would love to do it 1. Bc Iâm a generalist and it seems like a perfect fit bit also 2. Bc I want to learn so much about the industries Iâll be working in and possibly transitioning out into. I agree, work life balance isnât huge for me early on, but I do want to settle down and have a good connection with my family and be a good husband/dad so ig thatâs why Iâm just asking lol. But Iâll def take a look at ur channel too! Thanks!!
Greetings from Germany. Please i know this information might not be for all , but anyone who is finding it difficult to trade or invest should work with Helen Howard pratea on google she is an expert advisor i came across in a conference
@@riyachhabra I wonder can I introvert fit in consulting job ? Do you have to deal with people all the time ? ( m asking for myself ) đ
This is hands down the best video that I have seen on this topic. Good job!
This channel provides the best content in this space, the quality and simplicity in delivery is unmatched .
Thank you for this amazingly prepared video. I appreciate it. I am now considering consulting for my career path.
Very interesting. I will be starting my career with Consulting soon. Thank you for this video. Gives a lot of information.
As someone who who will go to Undergrad Wharton this upcoming fall and trying to decide between these two paths, this video was very useful! Thank you
that's what I was looking for , thank you so much
Great vĂdeo,man, keep it up!!!
Hey Matt I love all your videos. Can you make a video about what a typical career looks like as a trader? Thanks!
Great video mate!
Awesome video. Iâm a freshman at Boston College so I appreciate the mention. Definitely have always been leaning towards IB but once I got here I began looking into consulting as I enjoyed the versatility of it and it seemed slightly more or a laid back recruiting process than finance. Still very interested in finance though, especially after watching this.
Both are great paths and BC is an awesome place to be. Good luck!
Love these videos!
The homie!
Great video! My personal experience working for 5 years at an MBB firm would suggest increasing the working hours range by 10h or so, but otherwise this was spot on!
Good insight, thanks for sharing!
Good info.
Solid quality #content as always; graduated already and recruiting for HFs but this is still interesting to me somehow. Keep it up!
This is my future life in one video hahaha
Hi Matt,
Thank you for the amazing quality and consistency of your videos! As a rising sophomore, I really appreciate every bit of information people post out there
I was wondering if you could make a video about breaking into IB from a non-target school. I am an international student majoring in Quantitative Economics at a decent LAC that has some alumni working in elite boutiques or bulge brackets, but it's no NYU or Boston College ofc...
Maybe there is some piece of advice you can give to people from non-targets? How many of those have you met working at Evercore?
Regardless, keep up the good work Matt!
We have a non-target video here: czcams.com/video/9E0cCNZ-eEI/video.html
Probably the best we can give you right now. For non-targets, you need to network 3x as much as other people. Evercore probably had a few (
@@PeakFrameworks hey, thank you for the response! I don't know the avergae amount of networking though, so it's hard to compare what I'm doing to what everyone else is doing.
Maybe you can make a video about breaking into IB as a foreigner/international student? Maybe you could share a story of your friend or a coworker? Cheers!
@@PeakFrameworks I second liberaster, would be really helpful to know the odds of breaking into financial careers as an international student.
great video matt, i was wondering if you could do videos on different divisions in an IB like asset management, equity research, corp banking, leveraged finance etc..)
It's a good idea, maybe down the road!
The top ranges for IB and consulting comp is outdated. Top pay in IB (EBs like Evercore, Centerview, etc.) is roughly ~$180-$200k and top pay in consulting (MBB) is ~$130k with the most recent round of raises last month.
Which MBA program is better for consulting, especially MBB placement, UCLA Anderson or cornell Johnson?
Interested in your thoughts on corp dev/strategic finance/biz ops roles at tech cos as an exit from banking
Seems like a good lifestyle play for strat fin / biz ops, but I think it's a slower and less ambitious path. If I were to go to tech, I'd probably try harder just to land a PM role. Seems like PMs are treated a lot better at those firms.
I think corp dev is very company dependent, some are still as sweaty as banking. I think you're still working ~60 hours ish, so I'd probably rather do mid market PE or something at that point.
@@PeakFrameworks Pretty spot on advice! I see you may be a little bias since you were in PE. Corp dev is still a pretty solid gig/exit opp if you arenât super gung-ho about pay and more if you are WLB/lifestyle orientated. In my opinion, go to MM PE if you want somewhat chiller hours and lucrative pay and Corp Dev if you want a more slower and steady growth that still makes six figures. Depends on the person.
Where does Asset Management fit into to the finance side
What about Asset Management of wealth Management? Includes a Good Pay with a netter Work Life Balance
Which courses to do to get into consulting
Hi, could you make a video about Finance v Consultants : Best for freelance path after X years of experience? Would be nice for the more entrepreneurial minded.
Hmm it's a bit of a specific topic. Consulting is almost always going to be better for freelancing though, I can't think of many finance people who are doing freelancing.
What would you say would be a good role to target for a relaxed atmosphere, 40-45 hrs a week, finance position? If one such exists đ. Iâve got two kids and after my MBA Iâm either doing my own businesses for maximum flexibility, or might pursue something in finance. What about wealth management or something similar.
Not certain, I would think working for a pension fund, wealth management, or corporate banking could get you close.
Whatâs a typical major for management consulting and do you have to be good at math ?
Lots of diversity for consulting majors. Most common seem to be economics, engineering, and good liberal arts schools. I don't think you have to be good at advanced math, but you have to be good at simple math (e.g., quick multiplication and arithmetic)
so like when PE firms hire out of consulting do they hire consultants for strategy and more operations based roles rather than traditional finance roles?
It's a mix. Many consultants end up being on the investment team. But you'll never see a finance person end up in one of the operations roles.
@@PeakFrameworks thanks! also do PE funds have roles that are mixed ie both operations and finance based, or are the two sections completely seperate from each other?
Enlightening!
Hi, I just graduated in an investment degree last year and I genuinely don't know what career path to pursue in this industry. I enjoy the stock market and learning about the mechanics and technicalities of how it works, but I enjoy interacting with people. I don't know what career path I can pursue that incorporates some degree of both đą
Start talking to people in the industry and do some primary research!
Very interesting video, How easy is it to move from consulting to private equity?
Relatively easy from MBB and sometimes Oliver Wyman, harder but not impossible from everything else.
Hello, can you please make a video on venture capital please?
I can cover it, but not fully. I never worked in venture capital so it'd be more high level
which path is superior if you want to start a business later down the line?
I don't think either is straight up better or worse. Finance people tend to be a bit less entrepreneurial from my view, but you'll probably have more of a financial cushion. I think more consultants pursue their own business.
Key note, his salary range for consulting is for MBB or at least T2 strategics like Oliver Wyman , EY Parthenon, Monitor Deloitte, PWC Strategy& etc. (and no, normal big 4 consulting isn't as much as this)
Other consulting firms lower than these in tier standing will pay about another 30% less.. so generally speaking consulting pays maybe 50% to 60% of the finance path (and maybe 60% of the work hours roughly. Altho time:dollar ratio I'd say still favors finance a lot) Also his projections for year 4 salary is pretty aggressive even for MBB (well actually I guess in USA it's probably norm?) You'd have to be pretty much a super star. Then again I'm not sure if his finance projection is also super star level, therefore proportionally matching and telling the same story
But that year 4 salary is more like year 6-8 for most folks in consulting
Working 50-80 hr weeks just isn't worth it for me. Missing out on time with family and friends out weighs the financial benefits.
Thatâs because those ânormalâ consulting roles arenât consulting. When people say consulting the true definition is management/strategy. People in IT Advisory at a Big4 arenât considered consultants and they just use that nomenclature to attract grads.
@@Skelkro yep. I mean if society has branded those as consulting I might as well call it out. Lots of grads watch this channel and they might not know the difference unless they've coffeed or gone on forums for proper research.
Whatveer the case may be, anything that isn't a true tier 2 strategic or better consulting firm won't be paying to these graphs.
Yes that's a good point, this is comparing top IB and top consulting. Superstars vs. superstars!
What's the salary trajectory if you stay in IB?
We have an IB salary video on our channel as well! czcams.com/video/kTeOH8B9OFQ/video.html
Regarding salaries, I am aware that you speak in general terms, however I find that MBB (three big consulting firms) pay their MBA associates easily over 200k (full compensation) right out of graduate school. From your experience do you know if this correlates to banks such as JPM and GS?
We have a video on IB associate pay here: czcams.com/video/kW9XOp4ksyU/video.html
All-in year 1 pay is closer to $250k out of MBA for top IB.
Itâs really 55-70 working hours in consultanting
Hey mat do you have an idea which finance job would be suitable for an introvert where u donât have to much deal with people đ
Hedge funds!
@@PeakFrameworks but what role in hedge funds ? Analysts, trader ?
@@janvee2904quant or dev.
@@ThomasFoolery8 what is dev ? đ
@@janvee2904 developer
Hey Matt, I'm thinking about recruiting for consulting, SWE, and IB. I'm going to college next year. Will I be stretched thin if I aim for those 3? Should I only choose 2 to recruit for?
Also, I'd be interested in a video about recruiting timelines. Thanks
It probably depends on the school you're going to. But I have a couple friends at Stanford that have done all 3!
I think it really depends on your school / program. If you're doing comp sci at a top Ivy league it's probably feasible. If you're doing business / econ, you can probably only do IB or consulting. At a lot of schools, even recruiting for both IB and consulting will be tough because they require slightly different paths, internships, clubs, etc. I don't know anything about SWE prep but it seems very different from IB.
@@na-mh6lo hey thanks man. I think that's what I'm gonna do.
@@PeakFrameworks ok, I do go to a top ivy, probably studying comp sci. I hope to get a better gauge when I'm on campus. I'll likely focus on consulting and SWE and drop IB. Thanks again Matt. Also, if possible, I'd love a recruiting timeline video for consulting.
consulting is a scam
This is why the world is such a mess because almost all young kids now are going into business education , I guess Elon Musk said something like that ; Way too much Intelligent people are going into business education . As in the past intelligent people are going into sciences because they know it will benefit not only the Planet but all the people. In business there are too much negative externalities that they always tend to ignore , they are trained to push it regardless of negative externalities in the name of Profit.
My suggestion Implement â The Resource Based Economy â by Jacque Fresco
money rules all; the T and E parts of STEM are the only parts that pay well. I've seen PHd scientists struggle to get jobs in their field and if they do, usually for minuscule compensation. If we want young people in the sciences again, we need to increase pay or brain drain will continue
Kinda ignorant since you sound like youâve never taken a business course in college. They teach business ethics as a core class; you learn to maximize efficiency for stakeholders of a company, rather than just profit for shareholders. On top of that ESG investing is being pushed in your face everywhere in finance. Every country has corruption in their business environment, itâs impossible to avoid, however, Iâd like to believe newer generations are getting better in that aspect.