On the tragic death of an IB associate
The recent passing of a Bank of America investment banking associate brings to light the harsh realities of a profession known for its long hours and high-intensity demands. May he rest in peace, and may his memory serve as a reminder to prioritize your well-being above everything else.
I want to share my predictions on how this tragedy will influence the investment banking profession and your career decision-making process.
Will investment banking change materially?
No, I don't foresee significant changes.
Investment banking involves handling time-sensitive transactions worth billions, a responsibility that attracts individuals suited to managing demanding clients and justifying substantial financial rewards tied to these transactions.
Additionally, investment banking services are undifferentiated, so it becomes a fierce competition of sheer will. If one firm doesn't overwork its staff, competitors will, leading to a pervasive culture of overworking across the industry. Despite attempts to enforce work hour limits in recent years, employees continue to be unhappy, and death due to suicide or overwork still occurs.
Because of the financial rewards and the hyper-competition, the profession attracts individuals with specific personality traits, and those who don't naturally possess them often adapt to fit in. These personalities exacerbate the toxic work conditions with hazing rituals and fake work. Some of these individuals still view the workplace as a fraternity, perpetuating cycles of mistreatment they likely experienced as juniors.
Real change is unlikely unless transformative shifts occur from the top down, with a clear message that hazing and creating fake work are unacceptable. I have heard stories of juniors receiving tasks at midnight that are due the next morning, only for their deliverable to go unchecked by the person who delegated the task the next morning. Such practices are not acceptable in any work environment, especially when juniors are already so overworked and stressed.
We will all die, but we will go in three different ways. Some of us will go quietly, and that’s fine. Some will leave a lasting legacy because they've made significant contributions to the world. Sadly, as I'm writing this script, Jim Simons, the renowned quant investor, has passed away, adding to a tough year where Warren Buffett lost Charlie Munger, his partner in crime for decades at Berkshire Hathaway.
The third type won’t go quietly either, not because of their contributions to the world, but because others will attend their funeral just to make sure they're gone and maybe even express public disdain. In investment banking, I argue that the proportion of this third type is relatively higher than in a traditional corporation because they have treated others so horribly and showed no remorse. I don’t know about you, that’s not the way I want to go when my time comes.
That said, the investment banking profession will continue to exist, and I highly doubt any significant changes will occur. It's structurally challenging to alter a demanding profession and the type of personalities it attracts.
If it’s so bad, why do you still chase IB?
Why do young talents still want an IB job? Personal desires and systemic issues.
Pursuing finance for money isn't wrong. However, many of you might underestimate or, worse, are completely unaware of the demanding nature of the profession, particularly in the first few years, let alone climbing the ranks.
Those of you who fail to break in should feel lucky (I know you probably won’t) because you won’t have to suffer on the job to learn it’s a misfit. Those of you who slipped into the profession might have it worse because you will suffer through months or even years of misery, publicly venting frustrations on finance forums before ultimately quitting.
What's more concerning is when some of you pursue investment banking to compensate for low self-esteem stemming from low socioeconomic backgrounds or academic and professional profiles. Or you make career decisions to please your parents. As an East Asian, I could have easily fallen into this stereotype. And all of these are horrible reasons to pursue any career path. And it’s not the 1990s anymore, people only feel bad for you if you work in IB today.
Systemic issues are to blame as well. Tragically, the professional world often operates within rigid career trajectories. You are expected to follow predetermined paths.
Yes, starting in investment banking equips you with technical skills and business acumen, paving the way for accelerated career growth and diverse exit opportunities. But if things were not so rigid, college graduates wouldn’t be asking about which year should they jump to private equity or the exit opportunities. It’s saddening that people will pursue a job they already know they hate just for the sake of getting into what comes after that job.
As an aspiring public equity investor, I went through the very same thing of working in sell-side equity research, a profession I had no interest in working in for a single day, just for the branding needed to get public equity funds to be interested in my profile.
Firms are also great at creating an illusion of progression, further reinforcing this conformity and trapping you in. Human beings are so gullible that you can create a new title (eg. “second-year analyst”) and pay you $10,000 more next year to delude you into that you are progressing in your career.
So, please explore what options are out there. Those options might not pay you as much as a high finance job IN THE BEGINNING or they are daunting because most haven’t tried walking that path, but at least you will not become just another cog that was made in the same factory that’s called an investment bank (or a consultancy, etc.)
As of now, the world does not work the way I want it to, but I believe societal perception will change over time. The professional world will start to embrace candidates with nonlinear career paths and a willingness to take risks. There should not be a stigma with gap years anymore. And concepts such as target school or exit opportunities should cease to exist.
What should you do?
Prioritize yourself over fulfilling others' expectations, whether it's succumbing to parental pressure or seeking validation through your profession. The obsession with professional identity as a measure of self-worth is pervasive and often unhealthy, especially in places like the U.S.
I have had issues with this for a long time that I have made this point repeatedly during my Instagram Q&As and I saw the worst form of it because I have lived in New York City and Silicon Valley where talent density is so high. I am trying to remember the last time I went to a social event and someone did not start the first question “so, what do you do?” Job titles, firm brands, and career achievements are such narrow views of self-worth. Life is more than what you do at work.
Fortunately, the COVID-19 pandemic made many of you reevaluate your priorities. Some of you are recognizing the importance of work-life balance and pursuing passions outside day jobs.
Above all, prioritize your health. It may sound trivial: if we don’t live, nothing else matters. If a job is jeopardizing your well-being, take a step back and reassess what truly matters. Remember, everyone is replaceable, even CEOs are replaced.
If you're genuinely passionate about investment banking and envision yourself becoming the next Frank Quattrone, and are willing to make sacrifices to get there, go for it. However, if not, you don’t have to do investment banking just because others are doing it or you think it can solve your deeper personal issues.
Even if you are the passionate type, remember you don’t decide how your body responds to the demands of the profession, and it’s okay to walk away if you want to play the long game.
Ultimately, the decision to pursue investment banking or any other high-intensity career path is deeply personal. But always remember, your life is too precious to spend it chasing someone else's idea of success.
Let me know what you think.
Thanks for reading. I will talk to you next time.
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"Firms are also great at creating an illusion of progression, further reinforcing this conformity and trapping you in." So true, particularly in finance talent dense places like NYC where it feels like that next rung of career progression is always so visibly right there in front of you.