Are you looking for your first full-time job in finance and want to know the best place to start climbing the career ladder? Or maybe you’re looking for a new employer offering a higher salary and better opportunities? In any case, if banking is your preferred industry, it is important to make a choice between a private boutique bank and a large “bulge bracket” bank. What are the main advantages and disadvantages of each option?
The largest banks, sometimes called “bulge brackets”, work with corporations and governments, provide all kinds of financial services and have branches worldwide. For employees this means a highly competitive working environment, even at entry-level positions. On the other hand, bulge brackets are an excellent place for networking, as well as offering a solid formal training system. For recent graduates with limited work experience, joining a bulge bracket might be a sensible solution. Big banks have more open positions and normally give newcomers time to become accustomed to real-time situations.
In terms of salary, large companies offer better remuneration, as well as higher bonuses and relocation packages. The downside of this advantage is a standardized pay system and, often, close external scrutiny, both of which might dissuade big banks from lavish employee perks.
In comparison, small boutique banks are popular for offering a friendly work environment and closer involvement in the actual business from the first day of work. It's easier to interact with senior management at a boutique firm and, after a certain period of time, to discuss salary. Competition for roles is lower, as there are fewer people working at the same level. Nowadays boutique banks increase their market share, so employees can expect raises in salary and bonus.
However, working in a small boutique firm can require some heavy lifting, as there is a more limited number of staff and there may not be a pool of specialists ready to take some of your workload off you. In this case you should be prepared to assume more responsibilities and to make important decisions on your own. Besides, successful employees at a small finance company should excel not only at their primary tasks but also in selling their firm to prospective clients. Bulge brackets have brand equity, whereas boutiques need to invest more in promoting their services. If persuasion is not your strong suit, you should think of looking for a job in a large and well-known company.
FAQs
Bulge bracket banks are multinational, brand-name banks that regularly handle billion-dollar transactions and employ thousands of people in financial centers around the world. Then there are boutique banks—smaller, younger banks that specialize in certain areas of investment banking and handle smaller deals.
Do elite boutiques pay more than bulge bracket? ›
Third-year Vice Presidents (VPs) at elite boutiques earned 37% more than those at a BB, on average, and nearly 50% more than MM bankers. The report found that Managing Directors (MDs) took the brunt of recent bonus cuts, due to their compensation being most tightly linked to deal activity.
What are the cons of boutique investment banking? ›
Disadvantages of Working in Investment Banking at a Boutique Bank: Deals tend to be smaller and simpler, which may limit the technical skills you gain.
What are the advantages of boutique investment banking? ›
The Benefit: Boutique banks, due to their smaller size, often foster closer, more personalised relationships with clients. Instead of being one of many on a massive team, bankers at smaller firms often find themselves directly interacting with key decision-makers on the client side.
What is the difference between elite boutiques and bulge bracket? ›
The main types of investment banks include regional and elite boutiques, middle-market banks, and bulge bracket banks. Boutique firms typically have a smaller client base, while bulge bracket banks handle huge corporate clients, and middle-market banks are between the two.
What is the difference between elite boutique and bulge bracket? ›
There are two main categories of investment banks: elite boutiques and bulge brackets. Elite boutiques are smaller organizations that focus solely on investment banking, while bulge brackets are large firms that provide many different corporate finance solutions.
How much does a VP of a boutique investment bank make? ›
At the VP level, the base compensation is typically between $250,000 and $300,000. Regarding the variable bonus portion, on average, bonuses range from $200,000 to $400,000 at bulge bracket investment banks and elite boutiques.
How much do successful boutiques make? ›
What Is the Average Boutique Owner Salary by State
| Annual Salary | Weekly Pay |
|---|
| Top Earners | $242,000 | $4,653 |
| 75th Percentile | $125,000 | $2,403 |
| Average | $86,197 | $1,657 |
| 25th Percentile | $26,500 | $509 |
With more people buying online than ever, starting a boutique is a great side hustle or full-time business idea. The average income for eCommerce boutique owners is $6,013 per month. Getting started is easy, but it takes time to have all the pieces in place for a successful store.
How much do small boutique investment bankers make? ›
Boutique Investment Bank Salary in California. $64,100 is the 25th percentile. Salaries below this are outliers. $116,000 is the 75th percentile.
The Bottom Line
Joining an investment banking boutique does offer some great advantages even though bulge banks offer a more classic career path. Ultimately, the choice between a boutique bank and a bulge bank must be decided by a candidate's temperament, aspirations, and expectations.
What is the salary of small boutique investment banks? ›
Boutique Investment Bank Salary. $65,000 is the 25th percentile. Salaries below this are outliers. $117,500 is the 75th percentile.
Are boutique investment banks harder to get into? ›
I suppose you could say on a relative basis that boutique banks typically receive far fewer applications than a large bank, so the competition is ostensibly lighter. Then again, though, they typically have a fraction of the number of seats available.
What is the advantage of boutique? ›
1) You get the attention you deserve
From the in-depth personal attention in store, to the detailed and always useful blogs online, Fashion Boutiques are all about providing the best service and putting you at the middle of it all.
How do boutique investment banks make money? ›
Investment banks earn commissions and fees on underwriting new issues of securities via bond offerings or stock IPOs. Investment banks often serve as asset managers for their clients as well.
What is considered a boutique bank? ›
A boutique firm is a small financial firm offering specialized and personalized investment management, banking, or niche financial services. Boutique banking firms usually handle deals of less than $500 million.
What is the difference between a bulge bracket and a middle market boutique? ›
From a size perspective, bulge brackets and elite boutiques work on the largest transactions, while middle market banks and “regional” boutiques work on smaller deals and may be more geographically focused.
What is considered a boutique investment bank? ›
Boutique investment banks generally work on smaller deals involving middle-market companies, and usually assist on the sell or buy-side in mergers and acquisitions transactions. In addition, they often specialize in certain industries such as media, healthcare, industrials, technology or energy.
Why are they called bulge bracket banks? ›
Definition of Bulge Bracket
The font size of the banks at the top is larger and bolder – thus they "bulge" out. If you have heard of the Big Four in the accounting world think of bulge bracket banks in that light. Being a member of this group means the bank is prestigious.
