October 27, 2013

BUSINESS | Financial Faceoff: Students Weigh Prospects of Consulting, I-Banking

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By MANU RATHORE

Consulting: Innovative, Strategic Thinking

Students leaning away from investment banking and toward consulting say the latter industry is more “strategic” and “entrepreneurial” than the former.

“Consulting is an exciting industry to be in for innovative thinkers,” Abi Warren ’15 said. “Consulting, from my understanding at least, is more creative [than investment banking] and is for people who want to be in an intellectual environment.”

Consulting provides students impressive opportunities to learn managerial skills, Shivang Tayal ’16 said.

The industry can also provide employees a wide range of experiences, according to Tayal.

“From my experience, what’s great about consulting is that it gives you great business experience in various industries,” he said. “Consulting firms have a great work environment. It is a very positive setting with a great learning curve.”

The consulting industry  provides employees a better work environment than investment banking, Gizem Sakalli ’15 said.

“[Consulting] is a wider umbrella industry,” she said. “Banking and finance are more specific industries. Banking could be a subset of consulting, but the other way round is not always the case.”

According to Tayal, consulting involves more strategic thinking than investment banking, which Tayal said is made up of more repetitive tasks.

“The biggest difference between consulting and investment banking according to me is that consulting involves more managerial and high level strategic thinking, whereas banking involves more specific tasks,” he said.

On average, Cornell graduates who joined consulting firms earned less than their investment banking peers.

The mean annual salary for Cornell graduates who joined entered consulting industry was $59,513, according to Cornell Career Services’ Class of 2012 Postgraduate Report.

Accenture, Deloitte Consulting, Ernst & Young, PricewaterhouseCoopers and IBM were the consultancy firms that hired the most Cornell students in 2012, according to the 2012 postgraduate report.

Investment Banking: Creating Value, Impact

Investment banking jobs are sought after due to high compensation, growth opportunities and even their work environments, students who have worked in the industry say.

Jay Edwards ’14 said he believes investment banking can make a meaningful impact on society.

“A lot of work that we do extends outside a client’s balance sheet. By helping out our clients, we are helping them expand their capital,” he said. “By helping companies you’re making an impact outside their immediate balance sheet.”

Edwards added that the investment banking industry also provides an opportunity for employees to help not only  shareholders but also  employees and suppliers.

“The industry helps companies expand beyond just the immediate value for shareholders but also customers, employees, suppliers and manufacturers,” he said. “When you work on an [Initial Public Offering], you’re helping give a company access to money with which they can do great things.”

Though consulting is a competitive industry, investment banking also attracts highly qualified applicants — something that draws many students to the industry, Gizem Sakalli ’15 said.

“The firm chooses very selectively, and this [is] a big attraction for individuals beginning their careers as they get to network,” Sakalli said.

Culture is plays a key role in every industry and is “one of the best ways to evaluate a firm,” according to Edwards. “The culture is the key part of a workplace,” he said. “When you work long hours, you really need to be around people that you like.”

On average, investment bankers who graduated from Cornell earn a higher salary than their consultant peers.

The mean salary for Cornell graduates who joined the financial services industry was $64,366, according to Cornell Career Services’ Class of 2012 Postgraduate Report.

Bank of America Merrill Lynch, Barclays Capital, Capital One, Citi, Goldman Sachs and JPMorgan Chase were the top financial services firms that recruited Cornellians, according to Cornell Career Services’ Class of 2012 Postgraduate Report.

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