IB in london for international students
Is it more difficult to break into investment banking as an international student in the UK. I heard there have been some recent changes for the student visa making it more difficult to get sponsored for international students.
yes. it's hard. for shite pay. literally lower cost adjusted pay than the US and Canada. you need a minimum income of 30-something k a year to qualify to stay after ur student visa i think. some of my friends got big 4 summer offers and they were told they would not be getting return offers even before the internship started because big 4 pay less than the minimum threshold. this is not the US where even shit small lower middle market pe firms in NYC will pay you 135k a year as an analyst. in London the small shit places give you small shit pay
I have a few non target options in the US and UofT in Canada. Would it be worth it to go to Warwick and try to get into an investment bank since it's a target or grind it out in the US or Canada.
Warwick is on the cusp of target/semi-target APPARENTLY (i don't think so but they want to parade around about it). I go to LSE and I lowkey wish I had gone to u of t and become Canadian so i wouldn't have to worry about visa issues. U of t is a pretty solid global brand, it's known everywhere and has a great rep in consulting, but not so much in IB. nontargets in the US where even target international kids are having a hard time is an absolute no. i had the choice between u of t, tufts, Warwick, emory before I got into LSE and I had put my deposit down for U of T.
not less than canada when cost adjusted
sir please do the calculations. i can assure you, Canada pay is higher cost and tax adjusted.
Lol, I’ll bite, considering I'm a born and bred Canadian acutely aware of the situation/COL/finance comp in Toronto while also attending a UK target undergrad. Let’s first break down some quick numbers:
Let’s use Big 5 banks in Toronto, as they’re beneath globals but are also most of the IB spots in Canada and what most people are gunning for after globals. We can also use RBC as a basis for London and/or other tier 2/3 balance sheet banks like BNP/SocGen etc, even though there is a larger presence from BB/EB in London vs. Toronto, so it’s not really accurate… but I digress. Let’s also use CAD for everything to be simple and a 1.77 fx rate GBP/CAD.
AN1 Base at Big 5 Toronto is roughly 95 and let’s assume 50% bonus for mid-bucket (confirmed by 2 friends at mid Big 5 last year) = 143k, after taxes 98k (not including pension/RRSP deductions, will get there later and hint it favors the UK).
AN1 Base at RBC/equivalent in London is roughly 65k GBP and the same bonus of 50% in CAD is 173k, after taxes 119k. A 21k delta after-tax vs Toronto.
AS1 base in Toronto at Big 5 is still 135k and stays flat for all 3 years but bonus goes up more YoY. Let’s say the 1st-year bonus is 60%, making all in = 216k, after taxes 137k.
AS1 base in London is 105k GBP and the same bonus of 60% in CAD is = 297k, after tax 179k.
VP1 base in Toronto at Big 5 is roughly 175k (Toronto lads can give me more clarity on this one, but heard it’s accurate from an associate) with a bonus of, let’s say, 125% = 394k, after taxes 240k.
VP1 base in London is roughly 140k GBP with the same 125% bonus in CAD = 495k, after taxes 283k.
D1 base in Toronto have been told 250k at Big 5 plus a 150% bonus = 625k, after taxes 327k.
D1 base in London is roughly 175k GBP with the same 150% bonus in CAD = 774K, 430k after taxes.
As you can see, the delta in comp grows considerably as you become more senior even though the tax rate is actually slightly higher in the UK, simply due to the fact that they just pay more lol. Also, again, this isn’t even a fair comparison in that the market share of BB/EB/other boutiques in London that pay above this market is larger than the equivalent of options in Toronto, as Big 5 dominates a lot of domestic activity that leaves BB offices more like satellite offices (check if you don’t believe me). Also, you mentioned tiny boutiques in London paying like shit compared to Toronto, well boy does that tell me you don’t know a damn thing about how tiny boutiques in Toronto pay (not trying to be aggressive, just the facts).
When you have Firepower Capital paying all in sub 100k CAD for a 1st-year analyst and actually decent shops like Osprey paying 120-130k CAD all in, the 50-55k GBP base + 50% bonus (130-145k CAD) pay at small boutiques in London doesn’t seem that bad, alongside the fact that there are just more of them as Canada’s market is TINY. The caveat in Canada is the pensions can be a good gig to get buyside experience right out of the gate, but still pay considerably lower than banking, particularly outside of CPPIB, OTPP, etc. So while you’re not wrong that compared to the US London boutiques pay like ass, Toronto is the same if not worse and there are less of them with similar competition.
Back to the aforementioned hint regarding tax deductions for pension contributions across both countries, Canada's RRSP allows for 18% of your gross income up to a max of 31k CAD. The UK if I'm not mistaken is 60k GBP (106K CAD) for tax deductible pension contributions annually (could be wrong but believe it's acurate)? The caveat again is you can roll over your TFSA deductions in Canada from previous years so college students can benefit from a tax break in their first year out of uni where they probably weren’t making money, but either way, it’s still generally a slightly more attractive situation in the UK.
Lastly, to COL, as someone who has lived in both London and Toronto (both recently) I can firmly speak on the differences. First off, the rent is absolutely considerably higher in London, but not so much so now that Toronto has risen to an international standard of "very expensive" (it was not always this way). Let’s take rent in Canary Wharf, not a prime spot for most (i.e., Mayfair, etc.) by any means but new, clean condos right beside the financial hub and compare it to a similar neighborhood in Toronto, such as just slightly east of Yonge, somewhat new construction (10y>) but still close to Bay. Both locations are still desirable yet not the most desired areas and those from Toronto knows the discount that you get for living east of Yonge vs west of it, so it’s a fair comparison of sorts. Let’s take a 2bd condo that you’d be sharing with a roommate. Canary Wharf for a nice place might run you around 2600 GBP (4600 CAD) whereas Toronto is around the 3400 CAD mark. Split 2 ways, a difference of 600 CAD/month is a 35% increase and is certainly more expensive, a 7.2k difference annually. Metro costs are also higher in London by a lot, but you also get way more for what you pay for (TTC subway has 4 lines lol). 164 GBP (290 CAD) for zones 1 & 2 monthly vs 150 CAD for TTC, 85% increase and a 1.6k difference annually. From my experience, food and other costs are similar. So basically, COL is 8.8k CAD higher for an analyst/associate in London vs. Toronto, and when considering the smallest compensation delta (analyst level) of 21k CAD allows for 2.3x this, it’s really still a better deal in London.
Also, I haven’t even talked about the lack of exits out of banking in Toronto that make it worth it vs. London unless you’re taking a considerable pay cut for a nice lifestyle gig at a pension or competing for like the 2-3 MF shops that even exist in Toronto, plus maybe a handful of MM/UMM (Altas, Onex, etc) that pay up to London UMM/MF standard. There are way more exits in London on the buyside, and that’s even more evident in the HF space where there is a serious dearth of opportunity in Toronto in comparison to London.
So, in short, you make less, the smaller boutiques pay the same or less and there are fewer of them with an equal or greater barrier to entry, fewer exits to PE/PC, WAY fewer exits to public market buyside roles, and the COL difference is marginal. Toronto still has its merits and I like the city that I’m from, and if you wanted to consider Canada and the UK in the same bucket for IB/finance as a career outcome I could absolutely get around to that idea. But it is in no way a definite step above London in really any respect in terms of opportunity and cost-adjusted pay. We definitely can agree the US trumps all tho
Solid breakdown, Canada being higher than London did not make sense to me either. OP has an overly pessimistic view of London and overly optimistic view of Canada. It's very weird to talk about a 30k salary barrier in the UK when you're targeting IB...
Pretty sure you can also use unused 60k pension allocations over a certain number of years (I think 3).
No well said man. I respect that you took the time (are you bored tho), it's cute and nerdy. Anyway. I agree with what you've said, some of the things I'm a bit sceptical about: your london figures are fine for the globals+RBC etc. but my point is that if you don't get those you're pretty fucked as an international student. too many of my friends are going through this. I'm international - the big banks rarely want us and the smaller firms aren't near what you say an1-vp pay is at an RBC (many are all-in £50-60k and it's honestly shocking). In Canada, it's hard for internationals but you have a very clear path to citizenship/residency and that makes it exponentially easier to lateral even if you don't start off great. Also, in Canada I know tiny tier firms like lmm shops that pay 100+k base for an1, which may not be much better than London but it is still somewhat better if/when you don't make it to a global. I have a pretty decent cv (go to LSE, tough major etc) and I still had trouble with globals. I would rather be at a small shop in Toronto than in London.
London is a beautiful city but that's about it man. Stay for uni get out after is my goal right now
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