hello everyone hi and welcome to the
channel of Wallstreetmojo friends today we are going to discuss tutorial on
Finance versus consulting which is the right carrier or which is the right
pathway a goal for you or it should be because what you love you should do it
now let’s see the difference between the
finance and consulting see has a student of profession what you would like to do
what you would like to be do you want to increase the depth of the knowledge or
the breadth of the knowledge what do you think your inner strength is to some of
the questions that you go through see a professor was giving a talk in a small
room conference and students were this this is a story listen to it a professor
was giving a talk in a small room conference students were listening to
them to him deeply and when the professor paused and encouraged his
students to ask questions what is his student asked him what do
you think sir what’s more important the depth of the knowledge or the breadth of
the knowledge the professor paused and gathered his thoughts and said if we
want to be an expert go for deepening your knowledge but if you are ok with
becoming a non-expert it would I would recommend be generalist and increase the
breadth of the knowledge so the answer the professor gave is subject to
arguments and can encourage a lot of debate here is what we are talking about
something of that sort what should you choose a career which
needs a lot of depth of the knowledge or a profession which needs a lot of
knowledge in different subjects to effectively manage the task at hand
who are you a finance guy or a management consultant so here in this
particular too-tall we will do an analysis between the finance guy and a
consultant and will also provide all the details that you need for you to become
an informed decision but the decision has to be made by you we are picking the
fruits and putting into two baskets you need to choose which basket is yours a
basket with all the cherries or the basket with different fruits so let’s
begin let’s start with very simple thing as well will start with the excel and
let’s see some of the point of difference because we are going to make
some comparisons and we have two things in the area finance and we have the next
is consulting so let’s look at each and every aspects the
first aspect that I want to talk about is the career option so let’s begin
so the career option is going to be the first one now if we talk about finance
the career options are like investment banking corporate finance equity
research private equity risk management quantitative analysis project finance
and technical analysis but if we talk about consulting the strategy consulting
management management consulting IT consulting in other areas so what are
the hard skills that are required see Microsoft Excel PowerPoint you have
valuation methods sensitivity analysis so this is the point on hard skills that
are required by finance professional you have accounting corporate finance fixed
income derivative and corporate law but if you talk about consulting what do you
need Microsoft PowerPoint very heavily because everywhere you will be going
around with because you’ll be just showing your presentations and based on
that you’ll be pitching Microsoft Excel my Excel will be it will be really less
analytical skills process wass data and business modeling business strategy
operations human resource and supply chain let’s see what are the soft skills
that are required by such professional so now ability over here in kinds of in
in terms of Finance you need an ability to work for extended time period of 80
to 100 hours plus an hour of e excellent communication skills is required writing
skills and negotiation skills so in terms of consulting if we talk about
ability to understand clients requirement communication skills
excellent presentation skills and talking taking ownership ability to work
in a team let’s see which are the top forms that hires the finance
professional and the economics the consulting sorry the consulting
profession so the top form for finance are Blackstone Goldman Sachs & Company
Morgan Stanley Bank of America Merrill Lynch credit swiss Citibank dorsch bank
HSBC UBS JPMorgan Chase & Company but if you talk about consulting in that
particular area you have Macan seein company Boston consultancy group Bain &
Company boozin company Deloitte Consulting Deloitte Consulting LLP
monitor group PricewaterhouseCoopers LLP mark mirco LLC honest and young LLP and Accenture so this are all the top forms
that are hiring both the scenario let’s see how the work life goes in both the
center of both the cases if you see the work lines depend on which domain in
finance you are working for Investment Banking it’s brutal equity research it’s
still okay so by side analysts have a balance work life depending on the area
so you may have to work around closing through 10 to 18 hours a day but if we
talk about akin in in in case of consulting in consulting the working hours
vary depending on the clients and project on an average it is around 12
hours a day now let’s see the sixth point that is the travel part if you see
for finance profession mostly they are not required to travel much you can
safely assume that 90% of the time they spend in office but if we talk about
consulting consultants travel 20 to 25% to 75% of the time so let’s see some of the keywords that are involved in involved in this the
keywords are financial modeling in finance valuations M&A NPV and IRR in
consulting it is top level analysis insights findings and facts now let’s
look at the exit opportunities that are involved in this the exit opportunities
that are involved in this are depending on the chosen area of the interest there
are some there are some of the amazing exists apportion areas within the
finance sector for example investment bankers move into private equity or
research sell side analysts move into buy side analyst profile and if we talk
about consulting area then in case of consulting becomes senior executive in
the sector that you are consulting now let’s see what are the network
opportunities because that plays a very important role in any business or any
profession so in finance the networker fortunately mostly works within the
finance industry alumina in network is strong but not where it has found in the
consulting but if we talk about consulting then consultants works for
diverse industry they get immense opportunities of networking within
diverse group of businesses academics governments in also countries so they
also have a very strong alumni network which helps them to connect across the
levels now let’s see what are the popular certifications that are between
I mean or you can go for in terms of certifications so in certifications you
have over here as CMC over here you have tons of
variations like CFA FRM PRM CFP SEMA CMA ACC SCP and so on and so forth what are
the job security because everyone is always concerned about their job
security this is a very important point so the chances of the Chances of
spending 15 to 20 years in finance field is is bit lower especially invested mining and the chana in the in the chance of having of 15 to
20 years of career in consulting looks a lot higher now let’s see which one to
pick I mean we have to pick one finance versus consulting so let’s talk talk a
bit more about generalist and specialist so that you can have an idea what
characteristics are more for your kind specialists if you are a specialist you
tend to think about one thing it comes naturally to you you are able to
concentrate and don’t feel bored easily about one thing and before going into
depth you don’t leave any subject so you’re someone who is going go-to guy
for specific things you love your one thing and and you wholeheartedly want to
pursue it now the general is you are someone who
is okay with knowing a little about everything so you get bored with things
easily you’re someone who picks up one book reads it through and next you pick
up another book of different subject you have a hard time concentrating on one
thing most of the time and you feel that knowing enough is enough
so now the description we have given above may not match who you are
completely but while reading you will feel that this is me know this is a mean
so pick that those and read the entire the whole article or you know this
particular will try to listen the student in a very careful and a vigilant
manner so that you will keep all the phrases in mind and will be talking
about finance and consulting too so finances is for specialists for
professional students would love to play with numbers think logically based a
decision on reasoning and mostly get the be busy in increasing the knowledge in
finance on the other hand consultant has to do much things they cannot only get
around with the finance knowledge they need to understand business
administration marketing analysis presentation customer service and many
more so they are jack of all trades and master mostly masters
none of them let’s look at how how it looks like to have a career in finance
and to have a career in consulting so I’ll start with the first one as a
career in finance let’s see how things work in career in finance now this
section would be divided into two parts first we will talk about the possible
certifications degree you take up to create an amazing career in finance then
we will talk about how to get there first invested banking corporate finance
equity research you have risk management quantitative analysis project finance
and technical analysis how to get into finance rule a very important question
so the first step is to decide what you want to specialize in is it something
that you want to do at least for next 5 to 10 years if yes then choose whatever speaks to you but if you feel that specialization are not for you you
can read on in the next section and we will talk about careers in management
and consulting and who thrive in management consulting career all you
need to have is a mindset of generalist so if you think being a specialist
speaks to you choose any of the above certification and get going see getting
there is easy the hard part is to choose something that you can continue doing
for next 5 to 10 years so to understand whether you would like to
specialize or not you can simply look at the lifestyle of the finance profession
pick any profession and look at the lifestyle now ask yourself am I ready to
adapt to the lifestyle this or this career offers me am I excited about the
lifestyle if the answer is yes pick that specialization and you would be happier
let’s see what things work out in careers in management see well finance
careers are mainly built on the foundation of the certification
management management consultancy needs a different route here’s what you should
do to thrive in management consulting first of all let’s talk about the skills
that you require to do great in management consulting so skills required
in management consulting first effective communication and interpersonal skill to
be a great management consultant you need to know how to express yourself so
that the clients can understand where you are coming from a clarity is the key
so while communication can be develop interpersonal skills need to be owned
only by dealing with more people you cannot just get great at interpersonal skills until you become well-versed in your social life
second understand trends your job is to see the past and be in the present and
predict the future in such a way that the glance can positive can be positive
about the business and while getting there you need to understand trends of
the business and how to make sense in your protection third being an able to analyze vast amount of data so how would you know
where the company is coming from you need historical data to answer this
question whatever you need to know how to analyze the data so that you can
change your their their future even if analysis is not always considered as a
specific skill but you need to know how to analyze the data in such a way that
you can communicate the trend by a statistical model charts or presentation
next future orientation see as a management consultant your job is to
improve their future so if you are not focused on offering them better results
in future you would be you you would not be hired again why would you get hired
if you can’t sell them the possibility of the future or the most cherished goal
your job is to put the results on the table even before you start working with
them be sound no or not show past results through the upper two your
present kind of clients and they will trust you so let’s see how we can get
there how to get into consulting role you have heard the expression when I do
I learn yes you need to do consulting to be a good consulting how would you start
you can start by joining the consultancy firm okay you can join a big consultancy
firm like McKinsey & Company Boston Boston consultancy consultancy group
like BCG that is known as Bain & Company Accenture and so on and so forth and can
learn the art of trade joining a big company is beneficial for you for the
following reasons the first one is that you’ll be a small fish in a big pond so
there is no limits to your learning you can learn everything about everything
and then you can apply the same in your own domain of work second you will get
much better salary compared to your small firm third you will add value to
your personal brand value because later when recruiter will look at your profile
you will definitely have an edge over the others fourth you will also learn
about how this big forms do businesses with the
clients and can learn a ton from the experiences now this wall consultancy
firms see yes you can join a small firm and be a king of your kingdom of course
you will be in a small pond does your chances of the growth would be more how
the question is how you need to take more responsibility and would run the
firm mostly as an entrepreneur yes the compensation may be less but the
experience in this small form is great if you want to start something on your
own now start your own consultancy firm the next thing see starting your own
consultancy firm is lucrative of course it’s risky and not easy you will lose sleep nights after the night but it’s worthy of every sleepless
nights owning your own form will give you the autonomy of choosing your
clients expanding at your own pace choosing your own schedules and making
your own profits yes as much as you want and no it’s not easy to start a
consultancy firm on your own but if you have a few years of experience in big
firms and small firms that will be enough so let’s conclude this in the
final analysis the only difference between the finance and consultant
consulting that may bother you in the compensation you would own a little less
while starting your management consultancy career that then your
finance counterpart but if you stick to your lorial you will do well and eventually you may earn much more than the finance professional a word of
caution over here as a management consultant consulting professional you
need to ensure your your own growth as there is no or limited scope for any
professional certification however you can do finance certification and choose
a career and management consulting many professions do that think about all the
options and decide what means makes you tick at the end of the day good luck
everyone thank you