Career Advice for Aspiring Investment Management Analysts and Interns

With the beginning of the school year approaching, the email flow from eager students “asking for advice/a job” is about to escalate. Here’s my advice to college kids who want to pursue a career in investment management.

The first question to answer for yourself is, “Why?”

It’s probably because for the past 30 years, investment banking, private equity, and investment management has been a place where even average people could make fortunes. When I entered the investment banking analyst program, the lifestyle was known to be tough. It paid well for the time, but would be considered a pittance today, and the hours were rough. My now wife and I both worked at JPMorgan, she averaged over 100 hours a week. I put in a rule for myself when it became clear I was going to move on from banking - if there wasn’t a deliverable the next day, I was going home at 1am. That was JPMorgan investment banking in the mid 00’s, but it wasn’t materially different at other bulge bracket banks.

But what if it didn’t pay well? What if it paid like it used to … or worse?

Unlike every other technology that has ever come before it, AI is coming for investment banking/investment analyst jobs. The average investment banking analyst, entering an investment banking analyst program, despite spending countless hours preparing for interviews, enters a training program where he/she needs a 6-10 week program to be usable to the hiring firm. After 3-6 months, or in today’s pay, about $125-$175,000 later, the analyst becomes competent and can build a model semi-accurately, after a year, they require minimal oversight…For $250,000+ a year. It’s the equivalent of an NBA lottery draft contract for the unathletic.

The problem for the bank is that, if you’re like me, you leave after a year for investment management and the firm may or may not have earned a payback on their investment in your talent. Today, at least on the private equity side, analysts have those jobs lined up before they even start their banking jobs, capping the return for the investment bank. This season, JPMorgan and Goldman have taken steps to try to limit early recruiting, but if you think about it from the bank’s perspective there’s a lot of incentive for a firm to find cheaper ways to get their models built.

Enter AI. I still don’t know how AI companies are going to get an adequate return on their investment, but AI services are starting to get useful. If we’re being honest, most financial models that project are illustrative at best - a level of competence is needed, but perfection doesn’t exist. Obvious errors are problematic though so B+ and below performers have turned from predator to prey. AI, in large part, displaces all of them, and frankly mistakenly some of the A performers as well. The economics for the investment manager and I imagine the bank as well, are clear. Whereas as an investment manager, last year, I needed an analyst that went through an investment banking program and would have cost me at least $250,000 a year to build a financial model with a minimum of mistakes. Today, an AI service can build me the same within 30 minutes for $200 a month. Last year, I couldn’t afford you. This year, I don’t need you.

I think the most likely scenario for the industry is that it undergoes a period of rapid deprofessionalization where analyst ranks are thinned considerably. I think the next 3-4 years are going to be difficult for people in the industry. If you want to make it, take advantage of your youth and your relative cheapness. Find a way to work at a real economy business in manufacturing, logistics, retail operations, energy, software development, etc before you get to the point where you apply for an investment management role while at the same time applying a manager’s mindset. Figure out not only how to model that business, which ultimately isn’t going to be that differentiating, but how that business works at all levels. Figure out the things that don’t necessarily translate into numbers, but are a critically important part of the success of the business. How does the business flow? Who are the unexpectedly critical people? What could improve the business? That will differentiate you in the interview when you graduate college or business school, but more importantly, in life. It makes you valuable to a principal who analyzes a multitude of businesses and makes investment decisions. It makes you valuable to a manager who is more distant from the business than they used to be. That bank interview you are so worried about today, you might find, might be for a job that is far more meager in the medium and long term than working for a business.

The other important thing I’ll remark on here is that there’s an overwhelming emphasis on being good with computers and AI. The thing about AI, and people wanting to sell those services is that they need to be really good at making sure it works for us. That’s a waste of time, unless you’re trying to develop it. People, though, are less adaptable to each other. As unpopular as it may be amongst finance majors, sales is future proof. Not only is it a skill to separate people or businesses from their money - even if it's for a good or service that's really good for them - but being likeable, or even more importantly, being a leader and communicator and putting yourself in the clients shoes to help them make decisions about their business is an imperishable skillset. In an era where computers do more, being a capable Person is probably the key to success for many of us.

To me, the last six months in investment management has been akin to the Big Quake finally occurring in San Francisco. Private equity has finally shown they, on average, don’t outperform the S&P 500 while AI has also become good enough to displace a majority of financial and business analysts. I simply don't know how a young finance professional can have job security in the short and medium term. A big part of this profession just fell into the Pacific, the industry still needs to respond.

This is a long way of saying….White Brook Capital is unlikely to need a summer analyst in 2026.

Thanks,

Basil