Why are some careers cut short in Investment Banking

Careers in investment banking is one of the most sought after jobs of all time. Not only is it a technical profession, but also relies on the banker’s abilities to make meaningful connections in the industry- a trait of immense value to banks. The allure of this job lies in the prestige and pay package that being an investment banker entails. Few professions are given as much respect, and have such large pay packages for their services alongside incentives. As a result, it is a highly demanding job, with cutthroat competition and grueling work hours, and some careers in investment banking don’t turn out as long as others, for one reason or another. The daily expectation of managing a lifestyle centered around your jobs difficult, particularly for newcomers.
Most bankers fill up roles that are provided, at least initially, on an internship basis where most of the firm’s full-time positions are part of annual internship programs, which have two functions. The first is to provide an environment where your would-be employers may evaluate your performance under typical working conditions.  It also serves as a kind of baptism under fire, to give the employee an idea of the kind of pressure they would face at the workplace. Not only does this give both the employer and the candidate’s abilities, the candidate may then determine if the career path is for them or not and it is at this junction that we see, as we go up the hierarchy, the number of investment bankers decline.
One important thing to note is the nature of career path itself differs vastly in environment from the nature of the education. While at university, many students distinguish themselves from the rest, having a reasonably structured system of progression, in which they are expected to excel in. The best are hand-picked by firms, and from an environment where they have been excelling in a while, they are put into an environment comprised exclusively of peers and/or their betters. This leads to an extremely competitive setting as well as an unpredictable one because this can be vastly different from what an individual has experienced before, especially in terms of recognition and achievement. Stellar performance is expected and margin for error is low, and with real implications. This, admittedly, has played a psychological part in many of the decisions made by investment bankers who have since moved on to similar or other things.
It is also important to note that there is no defined way to receive an associate letter from a bank and this has consistently remained one of the biggest problems if the investment banking industry– they are handed out as per the bank’s pleasure whose reasons for accepting or not accepting into their institution may boil down to even trivial things, which often serve as identifiers amongst a sea of high performers. This goes to show that talent and effort are not everything and this, by its very nature, roots out many candidates and some find it difficult to ever receive one at all. From the associate position, there is also no guarantee there will be any progression in the bank after the associate hire. Not only is this clearly meant to limit the number of individuals who receive these accolades, it also paves the way for many investment bankers moving on to greener pastures or switching careers.
This structure is fairly straight forward- it’s either up or out at many institutions because the upper management positions are just small enough that it convinces you to leave after a while despite longevity at the bank. Many bankers believe that other jobs within the finance industry are much more suited to their work habits. Many simply leave due to the huge returns they have already received, and others even bear the frustration of working at an institution for years and having their loyalty and judgement unrecognized. But, those that weather the storm usually hold their positions for extended periods of time.

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