The five-year anniversary of the collapse of Lehman Brothers has led many in the industry to look back and reflect at the events that took place around that time and what has changed since. Recently among those of us that were in the market at the time, these types of secular changes and the question of "why investment banking careers" have naturally been a major talking point.
One funny person remarked that five years ago, people were saying "we're all going to lose our jobs", whereas now everyone is saying "we're all going to leave our jobs".
Yes, it was funny. It was funny because it reflects the situation that a number of seasoned bankers are now faced with. In today's environment, most work longer and harder, in more challenging market conditions than before, face far tougher capital and regulatory requirements. They also enjoy fewer perks of being in the job, take home less pay than previously and to top it off, in many jurisdictions they pay a higher rate of tax on what they do take home. These things are leaving us to question what we all should be doing.
Apples to apples
But all of this needs to be put into some sort of perspective. Pre-crisis comparisons look pretty unfavourable in most industries. Careers in investment banking and financial markets remain attractive and rewarding in absolute and relative terms, and are likely to continue to be for the foreseeable future.
Moreover, the situation for investment banking graduates, relative to those in other industries, is even more attractive. Compared to more senior positions, the declines in compensation have been for less pronounced. As an analyst your income will still be higher than many of your classmates, your bonus will still mostly be in cash and despite overall job cuts, the street is still showing its desire to keep the young blood walking through the door.
With this in mind, it's important not to approach your job search half-heartedly. Since investment banking remains an attractive career, you should ensure that you commit fully to it and try as hard as possible to get an edge over other candidates. The early you start preparing, the more of an edge you will be able to gain.
What will my friends think?
But what about how becoming a banker will be perceived by others? A number of students we've spoken to are concerned by this. We really wouldn't worry. All of us have many friends outside the industry, and frequently meet new people from other walks of life on a regular basis. To be honest, our profession has never really been an issue. The majority of people are curious about banking and financial markets, reflecting the general lack of comprehension by the wider public of what happens there and what working in investment banking is actually like.
Besides, do you really want to associate with people that judge by your occupation anyway? Of course, some banter is inevitable, and if you don't have a sense of humour then an investment bank is probably not the place for you to work.
Above all, make sure that you research thoroughly. network effectively and prepare adequately for interviews. You need guidance from people who've been there and done it. It's also important to keep abreast of developments in financial markets. A number of years ago we were in the position of having to find jobs. Through effective networking and preparation we were able to secure multiple front office offers between us, and still highly recommend investment banking and financial markets as a career choice.