Credit: Petro Onysko Photography
The high-intensity nature of investment banking, especially on Wall Street, is marked by demanding schedules and a fast-paced environment that has led to an increase in early career fatigue among young banking professionals.
This growing phenomenon has prompted many young analysts to reassess their long-term career trajectories, with some opting to pursue advanced degrees like MBAs or explore roles in industries that offer a different balance of professional challenges and personal time.
Investment banking executive and EF Hutton co-founder Joseph Rallo shares his insights for aspiring investment bankers wanting to dip their toes into the high-intensity profession, even in the post-pandemic era of remote work.
- Extreme Working Hours
A career in investment banking, in addition to the allure of high salaries and prestige, offers a unique training ground for young professionals to develop an extraordinary toolkit of analytical, interpersonal, and strategic skills, transforming them into a problem-solver who can deconstruct complex financial challenges with precision and creativity.
Yet, from grueling 100-hour+ workweeks to extreme stress levels, young professionals are increasingly prioritizing their mental and physical well-being over the financial rewards, seeking alternative career options like an MBA with many young bank analysts exiting the industry within a few years reporting chronic stress and fatigue, coupled with an inability to maintain a healthy work-life balance.
Rallo, who launched EF Hutton back in May 2020 during the COVID-19 pandemic, told TalkMarkets that at the onset of his career as a first-year analyst in a new city, not knowing anyone, he dove headfirst into the demanding lifestyle of an investment banker.
“The path was grueling—120-hour work weeks, missed weddings, holidays with the family, and countless personal sacrifices. Yet, it was also immensely rewarding,” the EF Hutton co-founder recalled. “I ate breakfast, lunch and dinner at my desk almost everyday. At one point in my first few months, I worked a 29 day in-office stretch with no days off, Rallo continued.
For first-year analysts, Rallo says they may find themselves working weekends and missing important personal events, which may not always be the easiest thing to do and a big factor to consider when choosing a career in investment banking.
- High Expectations and the “Banker Burnout” Crisis
The constant stress and sleep deprivation associated with finance analysts working long hours can certainly impact mental health, with many analysts often reporting feelings of anxiety and being overwhelmed, prompting them to explore new job opportunities.
According to the American Bankers Association, an alarming 85% of new analysts leave investment banking within their first two years due to burnout. The pressure to meet tight deadlines and high expectations contributes significantly to this phenomenon.
Even post-pandemic, today’s emerging fintech innovations, including AI, haven’t quite hit the mark in more effectively addressing the underlying causes of stress and overwork on Wall Street, even with promises of improved firm culture and cultural shifts.
Rallo, a husband and father, says that in taking personal time, he’s at that point in his life (and career) where he is able to spend time with his wife and kids away from the phone and other distractions. However, he also acknowledges that the ability to take personal time can be very different for a junior banking analyst versus a senior banker with a family.
- Competitive Application Process
From a Wall Street perspective, the competitive application process for first-year investment banking positions is indeed incredibly challenging and intense.
The recruitment and application process is highly selective, with over 100,000 candidates competing for just a few thousand spots worldwide in a single year. This competitive process, while designed to select top talent, can indeed create significant pressure and potential disillusionment early in one's career on Wall Street – especially for new hires who may find the reality of the job not matching their expectations.
Unlike other industry roles, the recruitment process for a career in investment banking starts much earlier – sometimes prior to beginning an internship which may not allow for as much flexibility in self-discovery and career exploration.
The overall recruitment process, according to Rallo, can be grueling with several rounds that require a strong demonstration of both technical skills and cultural fit – from initial phone screens and technical/behavioral interviews to panel interviews. Having this type of “rushed” timeline can be overwhelming and may prematurely lead to a student/candidate committing to a career path before they’re ready.
- Limited Career Advancement Opportunities
While investment banking offers high salaries, many professionals feel there is a lack of clear pathways for career advancement.
According to the 2023 Crowe Bank Compensation and Benefits Survey, 44% of respondents cited lack of career development opportunities as a reason for seeking employment elsewhere – meaning that almost half of banking employees have one foot in, one foot out.
With banks preferring to fill full-time positions with previous summer interns, the competition for remaining slots is fierce.
- Remote Work May Not Be An Option
Millennials and younger generations increasingly value flexibility in their work environments, especially post-pandemic. With many job applicants sharing their preference for remote work options, many analysts feel constrained by traditional office settings.
A recent KPMG survey revealed that out of the 1,300+ CEOs (400 from the U.S.), 86% of CEOs plan to reward employees who regularly come into the office with favorable assignments, salary raises, or promotions. That same survey also found that nearly 80% of CEOs believe that hybrid employees will return to full-time office work by 2027.
Rallo believes that post-pandemic, today’s younger generations are becoming more “complacent” in their increased desire to work-from-home, comparing the position to other roles across various industries that may offer more flexibility for remote work. He says it’s “critical” for young bankers to be in the office, adding that “it’s the only way to really learn from your peers, develop those key banking skills and have an opportunity for growth in this industry.”
The EF Hutton co-founder shares a similar view alongside other industry leading executives including Jamie Dimon, CEO and Chairman of JPMorgan Chase, who has been a prominent critic of remote work and its hindrance of effective leadership and team management.
Rallo advises first-year analysts to “show up early and stay late – be the first one in and the last one to leave.”
- Stepping Stone Towards an MBA or Alternative Career Paths
Many analysts view investment banking as a stepping stone to other careers, such as private equity or hedge funds. This perception can lead them to leave after gaining valuable experience and connections.
But for the EF Hutton co-founder, Rallo says his journey from a first-year analyst to broker-dealer owner was not just about “personal ambition”; it was about defying the odds and appreciating the high rewards of perseverance – something Rallo was no stranger to during his D1 athletic and collegiate tenure at the University of Notre Dame.
“This commitment enabled me early on to discover why, for some, the rewards of a long-term banking career far outweigh the allure of an MBA or alternative career paths,” Rallo emphasized.
- Inadequate Support Systems
The demanding nature of investment banking often leaves little room for mentorship or support from senior colleagues. Without adequate guidance, junior bankers may feel lost and unsupported in their roles.
“Senior bankers truly value analysts who are engaged and hardworking. They are drawn to those who are willing to go the extra mile and put in the necessary effort,” says Rallo. This means asking plenty of questions, demonstrating curiosity and showing a genuine desire to learn.
For young bankers, Rallo says it’s essential to “focus on understanding the work rather than just completing tasks to clock out at the end of the day.”
