Finally moving into a senior position for an investment banking firm is a sign that success has finally arrived. However, success of this kind does not mean that your daily experience on the job is going to become a walk in the park. Reaching the head of an organization can lead to considerable amounts of stress. According to the Chief Investment Officer and Co-Founder of the hedge fund Liongate, many people cannot handle the pressure that comes with this kind of position. Randall Dillard also has experience as the Head of Investment Banking at Nomura. His comments set the tone at the LSE Alternative Investment Conference. According to Dillard, people graduating to the position of managing director at investment banking firms rarely last more than 18 months. A major part of the pressure is the levels of revenue that these directors are expected to generate. The Managing Director of the City Psychology Group, Dr Michael Sinclair had this to say on the matter: “People try and try to climb the career ladder, but when they make it to the senior ranks, it can be overwhelming,”
These types of promotions come through a much more democratic process than most. Generally, people put in the time and this advance happens as a matter of due course. The former Managing Director for Bank of America Merrill Lynch, Ziad Awad, claims that only a select few actually persist in this position. He currently heads the boutique firm of Awad Advisory. Managing Directors oversee teams that rely on them for long-term prosperity and success. The benefits of the position may be considerable, however, the demands are just as serious. These individuals must exhibit expertise in client relations, creating new business, have the ability to get banks on the side of clients.
The stress and other pressures can also begin to take a toll on one’s health, according to a report released by the University of California. Only 20 percent of those achieving this position actually go on to prove themselves as being successful once they have conquered the many factors that make the job so difficult initially. Like many other high-pressure jobs, the risk for burning out is considerable. The manager of City Psychology Group claims that once people reach the top of the career ladder that they have worked so hard to climb, they often feel immediately overwhelmed with the new found responsibility. On top of pressure day in and day out, Managing Directors start from scratch with each new year as well. Anxiety rarely finds relief with lasting accomplishment within this profession.
Chris Roebuck, the former Head of Global Talent at UBS and current professor of Transformational Leadership at Cass School of Business, believes that the most pressure exists at the position of Senior Managing Director. This position translates into being a primary, strategic director for an entire organization. This position also reports directly to the board. This primary position of leadership maximizes the possible amount of stress that can be present in an investment banking firm. The position still revolves around bringing in substantial amounts of money on a regular basis, however, this particular title places one under the eyes of many more executives. This additional oversight requires a person to make decisions that are much more strategic and collaborative in nature.
When a person does succeed in this position, the financial rewards can be exceedingly good. People holding these positions earn an average of $1.7 million on a regular basis. This figure comes from studies based on the Options Group, an executive search firm. Although, a large number of Managing Directors earn substantially more than this dollar amount. In other words, the hours that you invest in the office can really pay off big. The security that money of this kind can buy you later in life is more than enough motivation for people interested in achieving at this level.