If you're good at STEM and you're at HYPSM, is there any reason to choose investment banking (BB/EB) over quant (JS/Citadel/HRT/etc.)? Which career track do people on Wall Street consider to be more prestigious? Also, which has better exit opps? My understanding is that while quants can exit to FAANG SWE (which pays quite well), ex-investment bankers are relegated to roles like FP&A and corp dev. Could someone please opine on this?
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Prestige... Did someone say prestige... prestige it nourishes me....
Just comes down to what kind of work you prefer. Quant pays higher out of school, but both will end up paying about the same after the first few years of your career. Some people like the quant work, others don’t. Vice versa for banking/PE.
Also if you’re an HYP IB graduate and you exit to corp dev, I feel really sorry for you. And FYI, no one in quant exits to FAANG unless they’re in the bottom 10%. FAANG pays like trash.
I don’t think FAANG “pays like trash” I mean the entry level pay is higher than IB comp with half the hours
Is this really true? A Buddy of mine just got a $400k+ total compensation offer out of undergrad at a quant firm. Hard to believe it would even out after just a few years.
A couple things:
1. You have to be clear about what comparisons you are doing. Picking the $400k total comp quant package is cherry picking the top of market. IB comp is much more standardized and there are many more seats in IB than there is in the top quant shops.
2. At the very top places (like you are quoting) the comp doesn’t even out after a few years, BUT the risk of getting cut is higher at a quant fund, if you have comp tied to PnL it will be a lot more variable (the guarantees go away), and the path to multiples of that number is very tough. In quant the path to huge money is through PnL or becoming a senior manager/group head, so many people do hit a ceiling of being “good” but not great, and that’s where the IB comp can catchup (again more MD spots than these top producing quants).
Yep. I’ve personally seen some new grad offer letters for 550k (I came out quite a bit lower, but this was a few years back). Which is why I was really confused when OP said quants “exit” to FAANG because a FAANG engineer would be lucky to ever even reach 550k TC in the span of their careers.
post this on the IB forum, not off topic. This subforum is for offensive political hot takes and dorks whining about how they can't get laid
But to answer your question - banking is more prestigious because "quant" screams NERD. Most banking analysts aren't looking to exit to corp dev and definitely not (lol) FP&A, they want to do private equity. Banking has a much more chadly image, rightly or wrongly. If you say you're a quant the mental image is you sitting in a cube farm that smells like BO surrounded by people who don't speak english well but are great at math. Nothing wrong with the career, it's great and pays well. If you're a FOB Asian dude it would be perfect for you. If you're 2nd/3rd generation or white you will probably hate it
One of the above posts that says IB and Quant pay the same a few years out really isn’t true for most Quant Traders at prop shops that are doing well. The upside is higher a lot quicker into your career for Quant Trading than IB.
If you have the ability to do QT academically speaking, the pay is significantly better with lower hours and usually the people who are academically inclined enough to get through the interview process at places like HRT, Optiver, and CitSec prefer QT work to IB work.
However some quants on the research side have less upside than these risk-taking roles which probably end up having closer to IB upside in a similar timeline to IB. However, these types of quants usually have a significantly more rigorous academic background and a more mathematical interest than IB work demands.
Adding on to the other aspect of your question, exits ops are limited in quant roles usually to other quant roles, tech, startups, and fintech compared to the PE/HF/VC exits for IB.
Prestige is an interesting one because the people in top IB groups have probably more prestige in the finance community, but I think people who are successful in QT are considered to have a prestigious career because it’s so extraordinary difficult to get into the industry. But definitely more people in your family will recognize wow you work at Goldman before they say wow you work at Citadel!
This is really a non-question. No one chooses (nor should they) btw being a quant and an I-banker. They are for very different types of people.
As for being a quant, the "prestige" is more firm based. You could be working at the top HFs and Prop shops that will shove cash down your throat (imagine $150K salary + $100 sign-on bonus + 50-100% performance bonus).
And then imagine being just another slightly above average math guy at some 2nd tier fund and getting paid less than SWE or DS at some tech company while working longer hours with worse culture. But your life will be much more enjoyable than a banker's though
If you have to ask this question, you're not gonna be a good quant
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