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Higher education

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Economics career choices

13 replies

eggsbenedict23 · 05/06/2023 15:05

Anyone got DC working in the field of banking, finance or consultancy?

What's the yearly pay like? Are the hours bad? Do they enjoy the work?

DS is thinking of post uni choices.

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NotDonna · 05/06/2023 16:48

Eldest DD is on an accountancy apprenticeship with a Big4. She’s in her 2nd year so with the grads now. Accountancy isn’t really banking, finance, consulting but happy to answer questions if accountancy is of interest.

eggsbenedict23 · 05/06/2023 16:54

NotDonna · 05/06/2023 16:48

Eldest DD is on an accountancy apprenticeship with a Big4. She’s in her 2nd year so with the grads now. Accountancy isn’t really banking, finance, consulting but happy to answer questions if accountancy is of interest.

How are the hours and the pay? Is she enjoying studying the ACA? (I assume it's the ACA)

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ShanghaiDiva · 05/06/2023 16:58

My ds is part qualified ACA and works in audit. During ‘busy season’ (first 4/5 months of the year ) the hours are pretty long. He graduated from Warwick two years ago.

ShanghaiDiva · 05/06/2023 17:01

Audit is probably not the most exciting area to work in, but does provide an excellent foundation. His salary was increased to £32/33 K when he part qualified which took about 18 months. He works for a top ten firm.

NotDonna · 05/06/2023 17:31

Yes it’s the chartered qualification. She’s in audit and yes it can boring but loves all her colleagues and the teams she works with and says everyone is supportive. Even the partners are approachable, friendly etc. I know big firms like the Big4 can have a cut throat reputation but this isn’t her experience at all. Far from it. There’s a nice social scene too - thank heavens, given she is missing the uni experience.
Her pay is currently less than the grads but I think it matches theirs going into her 3rd year and will be circa £35k. I think!
The exams aren’t a walk in the park. They’re tough and she studied like crazy after work & weekends. There’s added pressure that if you don’t pass you lose your job as it’s a training contract. But I think you get 2 tries. The hours in general are fine - until busy season Jan/Feb/March which can be horrific. She used to commute 1.30hr each way, leaving at 6.30am and getting home midnight (rinse & repeat) but those hours were probably for 2-3 weeks and now she’s moved out will save a 3hr round trip!

TizerorFizz · 05/06/2023 18:45

Bank of England employ grads. Economists are welcome. Starting pay £31,000. Not sure about work hours though.

TizerorFizz · 06/06/2023 08:33

Obviously civil service too. Treasury?

eggsbenedict23 · 08/06/2023 11:16

Hi all. Thanks for the replies. @TizerorFizz is pay in the civil service good? Could a civil service grad afford to live and work in London? (Flat sharing, being fully independent etc)

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TizerorFizz · 08/06/2023 12:31

@eggsbenedict23 Salaries start at over £30,000. Obviously young civil servants live in London! Progression through the grades is key though! Like most jobs. DD has civil service friends happily living and working in London. The bigger issue is getting the job in the first place looking at their employment stats!

SandyIrvin · 08/06/2023 14:05

DD did a McKinsey insight week a couple of years ago. She said starting salaries were high (can't remember what but assuming >45k which Amazon were paying at the time) However, they seemed to work lots of hours (we are one big family and even socialise at the weekend together one said - I can imagine the red flags fluttering for my DD).

DD said work seemed varied and interesting (maybe a bit superficial as they seemed to parachute into things for a short period). Output seemed to be PowerPoint presentations to clients. Many analysts were masters/ PhDs and there were a fair number of medics (but might be area DD saw). DD thought most lasted 2-4 years.

She would recommend doing an internship to rule out. Similarly for the investment banks (another one where the red flags were flying for my DD).

curiousllama · 15/06/2023 02:24

I graduated uni in 2017. Interned at two different (bulge bracket) investment banks in Sales and Trading, one US and one European. I won't lie: when I interned, it was 11-12h days and for projects, many of us came in on the weekends to work on group presentations/stock pitches etc as everyone wanted to convert their internships into full time grad jobs. Pay back in '16/'17 was £50k pro rata, which was nice. Definitely the highest out of all of my friends including tech. Nowadays US BigLaw firms pay pretty competitively (specifically US). Strategy consulting at MBB eg McKinsey can pay pretty well but not quite banking levels. UK law firms vary in comp after completion of training.

Tech pay is top at FAANG/crypto based firms. I know Google pays pretty well. Lots in stock comp though. But tech is a hell of a lot more well compensated in the US -- I know people who were making $500k at 26 at the same firms. Have a lot of friends working in software engineering. Lifestyle is the best in tech overall, though. Flexible working and better culture overall.

In sales, structuring and trading, no weekend work required on the actual job once you start but a typical trading desk will involve 11-12h of work, 10h sometimes, but they are pretty standard so outside of market hours (give or take 1-2h in the morning and COB) there's not much to do. On a trading desk there's risk being taken (obviously), although at an investment bank this is market making so you are quoting two-way to counterparties to provide liquidity and ultimately trying to benefit off bid-ask spreads (buy + sell margins). At a hedge fund, which is a typical exit opportunity with much less bureaucracy and unlimited ceiling in pay but less job security, you have a lot more freedom but your bonus is basically tied directly to your own PnL (profit + loss), and you are taking whatever bets you want unless you go into systematic trading. You set your own hours within reason but as eg typically you get 20-25% of your PnL as bonus, you can often find yourself glued to the phone, which can be more stressful than a trading role at an IB.

Pay differs by team performance, market conditions and other political reasons at banks. At the grad level/Analyst level it's a lot more standard with a few anomalies. You would generally expect at least 50% bonus (usually a fair bit higher), but bad overall team performance etc can even cause zero bonuses, even if you did decently, hence a lot of volatility. There's a bump in base salary each year and a steeper rise at promotion to each title, which can happen in 2-3 years from Analyst to AVP/Associate (pretty easy), and then 3 years(ish) from Associate to VP, a bit more difficult but standard nevertheless. From there promotions aee a lot more political to Director and MD. Some people never make it to MD. I think Analysts make at least £70-75k for base salary alone, what with inflation and all but I would have to double check. Culture wise? Male dominated in trading but generally meritocratic and less BS. Women tend to be more common in Sales roles (lots of client dinners etc). Salespeople also liaise between trading and the counterparty and provide market colour and pricing via the trader. No risk taken so a bit less stressful but can be seen as ..."less bright" than the traders (not my opinion - there are smart salespeople).

Trading desks run the gamut from bookish, PhD, nerdy types to laddish types. Hours can vary, too. Some desks are more quantitative than others eg exotic derivatives often want Maths/Physics/Engineering grads from top unis. Coding is very much desirable in trading roles, especially Python. In derivatives desks the work is less fast paced than a "flow" desk which has a much higher of volumes per day and is less stringent on degree (but STEM and Econ are desirable)..

Interesting for someone who finds intellectually stimulating the interplay between different macroeconomic events and financial markets and is an analytical thinker. A good environment to be surrounded by smart people. Definitely no two days are the same on the job. Not for people who want to coast (this will probably get you to VP max). Gets busiest over earnings season for equities traders and major central bank announcements (Fed, ECB etc), and volatile periods generally in world news. Involves reading lots of research. Helps to be motivated by making money..

Can also touch base on Structuring, but in short, they design bespoke solutions (asset-liability management, various hedging solutions, yield enhancements..) for institutional clients. Make pitches and price these bespoke products for those clients (there are in-house pricers as well as Bloomberg) eg you could design a product that takes the avg performance of three major equity indices and have a designed payoff. Many of these products can be replicated synthetically using a combo of options. Structuring desks are not on every desk but are usually attached to Derivatives/Options desks.

IBD (investment banking, which encompasses leveraged finance, M&A, equity & debt capital markets etc) has far worse hours; depending on the team it could be a 3am end (M&A is particularly bad) whereas DCM has nicer hours - around 9am-8pm or 9pm finish. Closer to deals closing there are obviously worse hours. I have a friend who was constantly having nosebleeds from lack of sleep. Described as more of a marathon.

Comp wise, IBD is the best. Exit opportunities usually private equity as an Investment Associate etc with better hours but by no means 9-5.

Sorry, on the plane and am bored so went off on a whole tangent.
With all of that said, I quit my job only recently to go into asset management, where the pay is lower but still better than the vast majority of sectors but has good work life balance and even one day WFH should I want. Have not closed off going into a hedge fund role later though as part of my role could be very transferable. Hope this was helpful (realised this was probably TMI)

NotDonna · 15/06/2023 03:03

Amazing insight and incredibly informative! Thank you. I’m sure the op will be delighted too.

eggsbenedict23 · 17/06/2023 17:03

@curiousllama @SandyIrvin thank you both for your advice

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