Difference Between Management Consulting vs Investment Banking

Management Consulting is primarily concerned with an organization’s strategy, structure, management, and operations. Management Consulting keeps on identifying the changes that can be done in an organization and recommend change as well as help with additional resources to implement solutions. Investment Banking is a financial intermediary which performs different services. Underwriting, acting as an intermediary between a securities issuer and the investing public, facilitating mergers and other corporate reorganizations, and acting as a broker and/or financial adviser for institutional clients are some of the large and complex financial transactions in which the Investment banks specialize.

What is Management Consulting?

Management consulting is an independent professional advisory service. They assist managers & organizations to achieve organizational goals & objectives by solving issues, creating value, maximizing growth & improving the business performance of clients.

What is Investment banking?

Investment Banking is a financial mediator that provides different services. Underwriting, acting as an intermediary between a securities issuer and the investing public, facilitating mergers and other corporate reorganizations, and acting as a broker and/or financial adviser for institutional clients are some of the large and complex financial transactions in which the Investment banks specialize

Key differences between Management Consulting vs Investment Banking

Both Management Consulting vs Investment Banking are popular choices in the market; let us discuss some of the major Difference Between Management Consulting vs Investment Banking:

Typical work of a Management Consultant

Management consultants are often involved in different and complex day to day activities. Projects they are involved in may differ according to the type of consultancy, firm, and the demand of the clients.

New graduate recruits spend most of their time at the client’s site. Management Consulting get involved in the task like:-

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Data collection and conducting research on the same to understand the organization
interviewing management team, other stakeholders and client’s employees
running focus groups and facilitating workshops;
Preparing business presentations/proposals.

Senior consultants involve in more experienced tasks like

Identifying different issues and forming a hypothesis and giving a solution to solve that issue.
Presenting findings and recommendation to clients and help them to implement the finding by giving them proper assistance
Managing projects and programs;
Liaising with the client to keep them informed of progress and to make relevant decisions.

Typical work of an Investment Banker

Investment bankers advise their clients on a high level of an issue like managing the issuance of bonds, recommending and executing strategies for taking over and merging with other companies and handling selling a company’s stock to the public. For all this work a strong background in finance, economics and a lot of financial analysis is required.
Investment bankers serve as strategists for their clients; they help them to develop financial plans and to implement them. For all these things investment bankers need to have personal and strategic skills.
They also help in the shaping of the American and world economies, managing mergers of multibillion-dollar corporations and handling the privatization of government assets around the world.

Investment bankers core activities would involve:-

Spending time in office to develop strategies for the clients
Preparing financial analyses and Financial Modeling
Working with the sales forces of their banks in selling the bonds and stocks which are created by the investment-banking department’s activities.
Pitch different ideas to different clients or they need to examine the facilities of companies being purchased by their clients.

Learn more about Investment Banking Roles here

Note: Become an Investment Advisor
Learn the skills required to be an Investment Advisor. Adapt to the role of market research and recommend suitable investments. Help people define and achieve investment goals.

Similarities between management consulting vs investment banking

Critical-mindedness:

This is the primary requirement for both the job. In order to come up with any recommendation they need to understand and evaluate the situation from all angles and without this, they will not be able to their job.

Communication:

A good communication skill is required by both the clients as it is very important for them to pitch their complicated ideas clearly and concisely to the clients.

Confidence:

Confidence is a must in a person who is working in either job as until they will believe in their capabilities they will not be called an expert. Confidence helps a person to boost their performance at work.

Determination:

In order to reach their goals as an investment banker or a management consultant should patiently gather information, brainstorm different ideas, and prepare reports.

Sociability:

Both Management Consulting vs Investment Banking needs to socialize with different clients in order to come up with a solution. Investment banker needs to conduct interview and group discussions with their client employees. A management consultant is required to meet different professionals like accountants, lawyers, lenders, etc.