Finance vs Consulting

As a student/professional, what would you like to be? Do you want to increase the depth of knowledge? What do you think your inner structure is?

A professor was giving a talk at a small conference. Students were listening to him deeply. When the professor paused and encouraged his students to ask questions, one of the students asked him – "What do you think, sir? What's more important, depth of knowledge or breadth of knowledge?" The professor paused, gathered his thoughts, and said – "If you want to be an expert, go for deepening your knowledge. But if you're okay with becoming a non-expert, I would recommend being a generalist and increasing the breadth of knowledge."

The professor's answer is subject to argument and can encourage a lot of debate. Here we’re talking about something of that sort. What should you choose? A career that needs a lot of depth of knowledge or a profession that needs a lot of knowledge in different subjects to manage the tasks at hand effectively? Who are you, a finance guy or a management consultant?

In this article, we will analyze a finance guy and a consultant. We will also provide all the details to make an informed decision. But the decision has to be made by you. We’re picking fruits and putting them in two baskets. You need to choose which basket is yours – a basket with all cherries or different fruits!

Let’s talk a bit more about generalists and specialists so that you can have an idea of what characteristics are more of your kind.

Specialist

If you’re a specialist, you tend to think about one thing. It comes naturally to you. You can concentrate and don't feel bored easily about one thing. And before going into depth, you don’t leave any subject. You’re someone who is a go-to guy for a specific thing. You love your one thing, and you wholeheartedly want to pursue it.

Generalist

You’re someone who is okay with knowing a little about everything. You get bored with things easily. You’re someone who picks up one book, reads it through, and next pick another book of different subjects. You have a hard time concentrating on one thing most of the time. You feel that knowing enough is enough.

Now the description we have given above may not match who you’re completely, but while reading, you may feel "this is me," "no, this isn't me." Pick that/those and read the entire article while keeping those phrases in mind. We will be talking about finance and consulting.

Finance is for specialists, for professionals/students who love to play with numbers, think logically, base their decisions on reasoning and mostly get busy increasing their knowledge in finance. On the other hand, the consultant has to do multiple things. They can’t only get around with finance knowledge. They need to understand business, administration, marketing, analysis, presentation, customer service, and many more. So they’re a jack of all trades and mostly a master of none.

This section will be divided into two parts. First, we will talk about the possible certifications/degree you can take up to create an amazing career in finance. Then, we will talk about how to get there.

• Investment Banking
• Corporate Finance
• Equity Research
• Private Equity
• Risk Management
• Quantitative Analysis
• Project Finance
• Technical analysis

How To Get Into a Finance Role?

The first step is to decide what you want to specialize in. Is it something that you want to do at least for the next 5-10 years? If yes, then choose whatever speaks to you. But if you feel that specializations are not for you, you can read on. In the next section, we will talk about careers in management consulting. To thrive in a management consulting career, all you need to have is a generalist mindset. So if you think being a specialist speaks to you, choose any of the above certifications and get going.

Getting it is easy. The hard part is to choose something that you can continue doing for the next 5-10 years. To understand whether you would like to specialize or not, you can 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 career offers me? Am I excited about that lifestyle? If the answer is yes, pick that specialization, and you would be happier.

While finance careers are mainly built on certification, management consulting needs a different route. Here’s what you should do to thrive in management consulting.

First of all, let’s talk about the skills required to do great in a management consulting career.

Skills Required for Management Consulting

• Effective communication & interpersonal skills: To be a great management consultant, you need to know how to express yourself so that the clients can understand where you’re coming from. Clarity is the key. While communication can be developed, interpersonal skills need to be honed only by dealing with more people. You can’t just get great at interpersonal skills until you become well-versed in your social life.
• Understand trends: Your job is to see the past, be in the present, and predict the future so that the client can be positive about their business. And while getting there, you need to understand the business trends and how to make sense in your prediction.
• Analyzing a vast amount of data: How would you know where the company is coming from? You need historical data to answer this question. Moreover, you need to know how to analyze the data to change their future. Even if analyses are not always considered a specific skill, you need to know how to analyze the data so that you can communicate the trend via statistical models, charts, or presentations.
• Future orientation: As a management consultant, your job is to improve their future. So if you’re not focused on offering them better results in the future, you would not be hired again. Why would you get hired if you can't sell them the possibility of the future or their most-cherished goal? Your job is to put the results on the table even before working with them. Be sound. Know a lot. Show past results to your present clients. And they’ll trust you.

Let’s see how you can get there.

How to Get Into A Consulting Role?

You’ve heard the expression – "When I do, I learn"? Yes, it would help if you did consult to be good at consulting. How would you start? You can start by joining a –

Big Consulting Firm:

You can join a big consulting firm like McKinsey & Company, Boston Consulting Group, Bain & Company, Accenture, etc., and can learn the art of the trade. Joining a big company is beneficial for you for these reasons –

• You will be a small fish in a big pond. So there are no limits to your learning. You can learn everything about everything. And then can apply the same in your domain of work.
• You will get a much better salary compared to a small firm.
• You will add value to your brand. Because later when a recruiter looks at your profile, you will have the edge over others.
• You will also learn about how these big firms do business with clients and learn from experience.

Small Consulting Firm:

Yes, you can join a small firm and be the king of your kingdom. Of course, you will be in a small pond. Thus, your chances of growth would be more. How? It would help if you took more responsibility and would run the firm mostly as an entrepreneur. Yes, the compensation may be less, but experience in a small firm is great if you want to start something independently.

Start Your Consulting Firm:

Starting your consulting firm is lucrative. Of course, it’s risky and not easy. You may lose sleep night after night, but it’s worth every sleepless night. Owning your firm will give you the autonomy to choose your clients, expand at your own pace, choose your schedule, and make your profits (yes, as much as you want). No. It’s not easy to start a consulting firm on your own. But if you have a few years of experience in big firms and small firms, that will be enough.

The only difference between these careers that may bother you is the compensation. You would earn a little less while starting your management consulting career than your finance counterpart. But if you stick to your laurel, you will do well, and eventually, you may earn much more than a finance professional.

A word of caution here – as a management consulting professional, you need to ensure your growth as there’s no or limited scope for any professional certification. Many professionals do that. However, you can do a finance certification and choose a career in management consulting. Think about all the options, and then decide what makes you tick at the end of the day.