Consulting vs Banking: 4 Key Differences

Many FC members, especially those currently completing an MBA, are considering consulting vs banking. I had a privilege to work in both fields so I can compare the pros and cons of both based on my own experience. Below are some key differences I noticed in being exposed to both environments.

Four key differences when comparing consulting vs banking

Asset vs resource:

The number one difference for me when comparing consulting vs banking is what I call asset vs resource. In consulting a lot is invested in your development and you are treated as a valuable asset to the company. People are the most important asset for consulting firms and while there is the up or out policy pressure, you do have to compete with only top performers on a daily basis, you do feel very clearly that YOU are important and your development as a professional is important for the firm.

In banking, you are a resource. Your development is, to a large degree, not important. If you deliver results they will promote you. If you don’t they will push you out, or to the side. I have seen VPs being demoted, senior business development person pushed to a lateral but less important role or made feel so uncomfortable they leave to join a competitor.

People are escorted out of the building the moment they say they are joining another bank. My friend went through this. He had to leave all his belongings, including his jacket and photos of his baby daughter as security walked him out of the building, the moment he said he was leaving to join another bank.

The culture shock for someone from consulting was huge, at least in my case. You get this clear feeling that you are just NOT valued, you are used. This contrast was shocking to me and I hated this about banking.

Cream of the crop vs politically savvy long-timers:

The next thing that was very different when comparing consulting vs banking is the type of people you get to work with. While you will be working with competent people in consulting and in banking, in consulting the caliber of your colleagues will generally be much higher.

In banking, most bosses are in their high seats because they served the bank for decades and know how to navigate the political landscape and be in good graces with important decision-makers. In consulting people at the top are generally more than politically savvy long-timers.

They are highly competent people who made tremendous sacrifices in serving their clients.

Tiring but exciting travel vs. missing out on seeing new places but sleeping in your own bed:

And the last biggest difference I noticed when comparing consulting vs banking is, of course, the travel schedule. During my years in banking, I only had to travel out of city one time on business and several times for training. While I missed not visiting amazing cities that I otherwise may never get a chance to visit, I also really enjoyed being able to plan my weekly meals, not having to pack all the time and live out of a suitcase and sleep in my own bed.

And nothing is really worth to be away from those you love.

Life is too short for this. I would say that overall, not traveling for work turned out to be a benefit, even taking into account the downsides of not seeing amazing parts of the world. So I would say this point is a pro for banking and con against consulting.           

Clear and guided career path vs confusing maze with mostly lateral moves:

And the last key difference I found when comparing consulting vs banking is in navigating and figuring out a career path. In consulting the career path forward is crystal clear. You join as an analyst, you move to associate, you become engagement manager, junior partner and then senior partner.

In banking, my experience was a complete opposite. No coaching or guidance. It was not clear what was the career path. There is a maze and you can take various turns and hope to get somewhere at the end of the road.

The bank is huge. There are plenty of options available for your next role, but most of them are lateral. You could stay in investment banking and follow a set path, or do a lateral move to fixed income. Or you could go into wealth management. While all have their own set promotion path it is not clear where to do and what they really do.

My verdict when comparing consulting vs banking

So what is my verdict when comparing consulting vs banking? I would say, by far, consulting was, and is, a much better fit for me. I love learning. I put a lot into my work and I expect to be viewed as an asset to be invested in vs. a resource to be used and squeezed.

Also, during my years in banking, I met maybe a maximum of 4 people who were somewhat happy. All of them NEVER worked outside of financial services so I think they were happy because they never seen the world outside of financial services. Everyone else was at various levels of misery. In consulting most people I worked with were happy or at least content with their jobs, careers and future prospects.

So based on my experience, if you are anything like me, my advice is to choose consulting or something else, but don’t go into banking.

This is, of course, based on my experience only. I am sure there are a lot of very happy bankers and maybe the issue was the organization I worked in vs the entire banking industry. But I thought to share this so you can avoid some disappointments that I experienced when I picked banking over consulting after MBA.

Looking at FC clients, there has also been a big shift away from banking. Ten years ago banking and consulting dominated our client choices. Today, even when clients receive McKinsey offers, most end up at tech firms, consulting is second, PE/VC is third and investment banking and wealth management are in the lower top ten list.

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