With the lucrative compensation and fast-paced environment, investment banking has been a popular career choice among top graduates from business schools. While finance, accounting and investment analysis are important hard skills, consulting experiences also enable critical soft skills to excel as an investment banker. This article will elaborate how consulting paves the way to investment banking by nurturing analytical thinking, communication skills and client management.
Consulting develops strong analytical skills for investment banking valuation
Investment bankers work on complex financial valuation and modeling for M&A deals and IPO transactions. The valuation models require strong analytical skills to synthesize data, scrutinize assumptions and build sophisticated financial models. As strategy consultants, analysts undergo rigorous training on structuring problems, analyzing data, and developing insights from analysis. The analytical toolkit gained from consulting experience, including hypothesis-driven thinking, issue tree framework, and MECE principle, provides a robust foundation for investment bankers to excel at financial analysis and valuation.
Consulting emphasizes clear communication critical for investment bankers
Investment bankers interact intensively with clients and are responsible for preparing deliverables like pitch books. Therefore, expressing ideas clearly and tailoring messages to different audiences are paramount. Management consultants constantly practice presentation and storytelling in front of clients. The communication training in consulting helps investment bankers to clearly convey analysis results, articulate deal structures, and win the trust of clients.
Consulting develops relationship management capabilities vital for investment bankers
Client relationships are the lifeline of investment banking business. Investment bankers need to manage client interactions skillfully by understanding their needs and delivering satisfactory services. As a consultant, one gains first-hand experience working closely with clients across industries and develops capabilities to build rapport with clients. The relationship management skills are invaluable for investment bankers to maintain client loyalty and generate repeat business.
In summary, consulting experience cultivates critical analytical, communication and interpersonal skills for success in an investment banking career. The rigorous training and client exposure make consulting an ideal preparation ground before transitioning to investment banking.