It’s bad out there and there’s no doubt about it. More red days than green, more staffings related to pitches than live deals and mandates, couple that with the fact that you’ve likely barely interacted with your capital markets teams all year, the pain of another busted M&A sell-side still haunts you, and maybe you saw a friend from your analyst class get laid off / experienced lay offs for the first time. It’s not at all what you expected and came to see during the past few years of our bull run. I can imagine you’re feeling low as well, I hear it from our bullpen constantly. It feels like nothing is improving… and of course, bonus season isn’t going to be as good as last year, we’ve all see the numbers in the press and from bloggers (s/o OfficeHours) and I’m sure now than ever you’re thinking to yourself — why did I sign up for this?
I think that last question is absolutely important, what actually drove you here? We all have intricate stories and likely felt an insane sense of accomplishment when we initially got our offer letters. In a time where our clients are recalibrating themselves and thinking of ways to be nimble in a new economy, it’s especially important for us as individuals to do so as well. If it was the money and you came into it for a quick buck out of school with plentiful exit opps after, be honest with yourself, but also be real with yourself, banking and finance were always going to be a gamble when it came to bonuses. That being said banking analyst comp has caught up significantly, I think 1Ys make almost double in base from when I started over a decade ago, and that was when you knew you weren’t doing it for the money in the first 2 years, but the next 5, 10, etc.
If you wanted to become a millionaire without taking a gamble as an entrepreneur, banking was the quickest way to get there, and that’s why folks would do it. The biggest advice my MD gave me when I was an analyst and wasn’t happy with my initial bonus (I started during the European debt crisis) still resonates with me: this is a long game and you’ll have some down years, but also a lot of great years, don’t ever live beyond your means (e.g. bonus), and you need to think about comp as a long-term trajectory, i.e. what is it in summation over the course of 5, 8, 10+ years and where is it setting you up.
It feels like everyone is getting a reality check and will need to recalibrate — like our clients — and the question is what are you going to do about it. I’m at a point now where the comp is great, but also where I get to feed into my intellectual stimulation and lead my own pitches/deals, start doing some of my own BD, and figure out if this career is right for me or not. I may be successful, I may not be, and if I’m not I know I still have some great exit opps out there for myself. I’ve seen some great years and I’ve seen some bad years, but I was true to myself throughout all of them and made sure I stuck to why I did this in the first place and what my real purpose was.