I took a 10% cut to my base to move from the SS to the BS.
I tried to negogiate and they know I took a cut but they told me that they don’t bring people on higher than what I was offered.
Generally, I would say it’s been worth it. I moved up from an “associate” to an “analyst” reporting directly to the PMs. The job is much more interesting too.
Are you willing to share any more details as to the final comp they offered you?
I don’t mean to pry, I’m just curious since I have friends with similar years of experience looking to transition soon.
Base is a little under $80K. I’m not in NYC. Bonus is unknown. I’d be disappointed if its under $50K.
I think the base salary is a bit low, but doesn’t sound untenable either and you will probably make out OK after bonus. What’s important is you’re on the buy-side now and as long as you can develop a repeatable investment process and get some decent returns under your belt, you’ll be in a better situation than you would have been if you continued on the sell-side. But you’ll have to take a longer-term vision on things, and know that you may need to eventually jump to another shop later to get a real payday. Sounds like you joined a more established firm and they felt perhaps that they could give you a lower-than-market salary just because of the name on the door…
Anyway, I’m just speculating here (you can tell me if I’m right or wrong) but the important thing to keep in mind is that there’s a saying on Wall Street, something along the lines of “You need to leave home to get paid.” So do as well as you can in your current role, make yourself indispensible, and at some point either at your current firm or more likely somewhere else, you’ll hopefully get a bigger check.
It is a little surprising to me at a 1st year IB analyst (i.e., excel monkey) can make more money than me, who has influence over a multi-billion $ portfolo.
I think that they don’t want to pay people before they’re sure that this individual can learn to invest in their unique style. We have a unique approach, similar to Third Avenue.
With over $10 billion in AUM and less than 20 investment professionals, I know that there’s money to go around. I just gotta get my slice of the pie. That said, I am a bit disappointed but my base but I get the impression that everyone else is generally happy with compensation so maybe the mix is different than a traditional asset manager.
One thing that I would add for anyone else trying to switch to the BS from the SS is that the work is higher pressure but generally more intellectually rewarding and interesting. So, I feel like I’m being paid to learn every single day. We also have a great culture that allows me to walk into any of the PMs offices and pick his brain.
All that said, it seem that the REAL $ are at a HF.
IB analysts get paid more because you’re getting paid below market, and because most of the time, an investment banking analyst just needs to process. As you noted, there isn’t necessarily anything intellectually stimulating about being an banking analyst; it’s largely just plug and chug, but you have to do that for many hours a day. There’s definitely pressure to perform and with continued pressure on actively managed buy-side firms to justify their fees, the pie in most cases is smaller these days not to mention that someone hired from the sell-side may not really have any idea how to be a good investor. That’s not to say that one shouldn’t try to get their biggest possible payday, but at least you’re keeping a good attitude about things, enjoying the learning experience and have an understanding that it is very difficult to be a good investor. Hopefully you will get the mentorship at your firm and be on the right track; if you can master those skills (which I’m trying to do myself), your longer-term income streams will take care of themselves.