6 Reasons to Choose Boutique Over Bulge-Bracket Bank

by Derek Loosvelt | June 15, 2011

1. To Minimize the Odds That You'll Be Sacked.
Reports have been surfacing in the past couple of weeks that during the second quarter, Wall Street's largest investment banks took a beating. Which means that they'll have to cut some costs. Which means that they'll have to cut some positions. Which is not an uncommon occurrence in the world of bulge-bracket banking. Big banks tend to over-hire when deal markets heat up, and over-fire when deal markets cool. So, to avoid the possibility (nearly) altogether that your job will disappear when markets turn tide, it might be wise to choose a boutique advisory firm (such as the Centerviews of the world) or a boutique trading outfit (the Susquehannas on the block) rather than take your chances at a big-swinging bank (like a Credit Suisse or Morgan Stanley, both of which are rumored to be considering slashing headcount in the coming weeks).

roger altman and stephen schwarzman2. The UK Financial Services Authority Will Keep Its Hands Out of Your Pocket.
Ah, yes, the UK FSA, that pesky little organization that does not like it, not one pence, that investment bankers in the City are still cashing rather large cheques while the UK government is still backstopping some of Britain's biggest banks. And so yesterday the FSA released a list of 2,776 firms which will be restricted from offering bankers multi-year guaranteed bonuses. Left off this lengthy list were firms like Evercore (whose founder, Roger Altman, is pictured above, on the far left, during his younger days), Greenhill, Gleacher, and Moelis -- advisory boutiques that don't trade their own accounts or on behalf of clients and thus will still be legally able to offer whatever they want, including several-year guarantees, to lure dealmakers into its UK ranks.

3. It's Better to be a Shark in a Backyard Pool Than a Minnow in the Atlantic.
The other day I was speaking to a former bulge-bracket banker turned boutique banker (he's an MD) and he told me that one of the several things he enjoys more about working at a smaller advisory firm is the recognition he receives for his work. He explained that, previously, at the bulge-bracket bank, if he closed an M&A deal worth $800 million (no small sum) that it was seen as just another blip on the radar since there were so many several-hundred-million-dollar deals being closed on a weekly basis (if not nearly each day). Whereas in his current position at a West Coast investment banking boutique, every deal he closes is recognized and celebrated. That is, he feels appreciated for his (hard) work.

4. To Stay on Uncle Sam's and Main Street's Good Sides.
If you care about what everyone in the Oval Office and/or what every Tom Jones, Dick Johnson, and Harry Smith thinks, then you might want to be careful about joining the ranks of a bulge-bracket bank. It's no secret that top big-bank bankers such as former golden boy/Obama best-bud Jamie Dimon and the Lord's worker bee Lloyd Blankfein are on America's most hated list. Which means that if you work for them that you, too, are not so well liked by the men and women in gray and blue who wear flag pins on their lapels and work on something called the Hill. In addition, it means that many of your fellow American citizens do not care all that much for you either. But, if you work for firms like Moelis, Qatalyst, and Perella Weinberg, then you'll likely be much more popular: politicians won't lambast your type in the media and, as a result, your fellow Americans will believe you are (sort of) an upstanding citizen and won't try to bean you with organic, New Jersey-raised, heirloom tomatoes on your lunch break.

5. To Lessen the Chance You Will Be Sold You Down the Hudson When the SEC Starts Snooping Around the Back Office.
Let's just say that if you work for a boutique, there's not much of a chance your fate will mirror that of a Frenchman nicknamed Fab Fab.

6. Greater Compensation Satisfaction.
That's right, if you work for a boutique advisory firm, there's a good to great shot you'll be much more satisfied with the cash you pull down than your pals who slave away at one of the bulging banks on Wall Street. Of course, it all depends on which group you work in (some are paid better than others). But if you consider that in Vault's 2011 Banking Rankings, Centerview Partners ran away with the top spot in our "compensation" category, Blackstone and Moelis both ranked in the top five, the top bulge-bracket bank was Goldman at No. 6, and this year's comp rankings are shaping up to be pretty similar to last year's (so far), then it's safe to say that, these days, smaller, at least in the case of comp, might mean better.



(Bloomberg: Rothschild Loses to Evercore as Boutique Firms Left Off British Bonus List)
(Vault Banking Employers Rankings 2011: Compensation)

(Related: 16 Sweet (Non-Bulge-Bracket) Investment Banks to Work For)

Filed Under: Finance


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