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What is the difference between consulting and investment banking?

How are consulting (increasing efficiency) and investment banking (identifying trends) similar and/or dissimilar? Is there a significant cultural difference between working at an IB as opposed to a consulting firm? #investment-management #project-management #consulting


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Kalyan C.’s Answer

Hi Parker,


Consulting and Investment Banking are two different career paths. check the following link, where the differences are illustrated in terms of pay, career progress, personal life.


http://news.efinancialcareers.com/us-en/152549/working-for-mckinsey-bain-and-boston-consulting-vs-goldman-jpm-and-morgan-stanley/


Thank you for the informative read/redirect(s) Dr. Mutyala! Particularly liked the culminating video and the linked health information - much appreciated and quite helpful. Parker W.

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Christan’s Answer

Hi Parker,
An example for a merger based on my own personal experience would be.
X Investment Bank works on a merger between Company X and Y in the Mining industry. The Investment Bank identifies this is the possible value creation and this is how you should structure the deal.

Company X and Y is happy with the deal structure and then hires a consulting firm to help the process go forward. E.g. How do we make our supply chain run seamlessly together? How many people do we need to have in both of our firms now that we're combined? How do we get rid of duplication etc;

Banks tend to focus on the more higher strategy side of the value chain, While consultants will generally help with the implementation side in this case.

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Stephen’s Answer

Hi Parker,

I believe the responses above mine have done a great job of covering the work related differences, so I will focus my answer around personal experience and cultural differences between the two paths.

I would say that consulting has a friendly culture whereas investment banking can be more competitive, however both career paths are full of exceptionally smart and kind people. Additionally, I see the largest difference between the two industries to be that consulting has a heavy travel burden, while investment banking has a heavy burden of hours worked. In consulting you can expect to travel Monday to Thursday and have some time off in evenings whereas in investment banking you can often expect to be working near every hour Monday to Thursday but will always be in your home city.

These are, however, broad level generalizations from my experiences. The reality is that every single firm is different for consulting and investment banking. There are consulting firms where you will never travel and investment banks where you work 9am - 5pm. To accurately understand what you want out of these career paths I would recommend networking in the ways I have outlined in the next steps.

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Caton’s Answer

Management consulting focuses on the deal execution and value capture including due diligence and synergy realization. Investment bankers identify the value creation and the consultants work with the company to realize the value.

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Aleksandra’s Answer

Hi Parker,

To put it simply - Consulting is on any topic - so there can be Financial, Merger & Acquisition, Organizational & HR, Strategy, Technology, etc. while Investment Banking, is a specific type of banking.

Going into consulting or investment banking is a great start to one's career. The hours in both of these careers are long, learning is fast and so people need to be quick learners. If you have experience in either industry, in my experience, you can do just about anything you set your mind to. Good luck.

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Tasha’s Answer

Consulting is more freeform work with a better lifestyle, and allows for more creativity...investment banking is more financial modeling and definitely more demanding work-wise


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