Are you torn between starting your career at a bulge bracket firm or a boutique investment bank? Many finance students and graduates struggle with this decision, especially after receiving job offers from both types of firms. However, you can make a personal decision with more confidence if you understand the differences between these banks.
Generally, bulge brackets and boutique firms differ in size, work culture, services, global presence, deal flow, resources, reputation, and organization structure. All these factors can affect the desirability of each type of firm, the exit opportunities, and employee satisfaction. Keep reading this bulge bracket vs boutique investment banking firms comparison guide to decide for yourself.
Bulge bracket firms are the largest and most prestigious investment banks in the world. They have great reputations and a good global presence, with offices in every major financial hub. These banks also share other characteristics that place them in that category.
One of the traits is a strong balance sheet. Bulge bracket firms have massive capital that allow them to underwrite huge deals, provide financing, and take on significant risk. So, besides providing advisory services, they're able to finance M&A transactions, large IPOs, and complex financial instruments.
Another trait is full-service capabilities. Bulge bracket firms are a one-stop shop as they offer a complete suite of investment banking services, from M&A advisory and capital markets to restructuring and risk management. Besides investment banking, these banks also offer services in other business areas like wealth management, asset management, and commercial banking.
The bulge bracket firms are JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, Barclays, UBS, and Deutsche Bank. You'll typically see them in high-profile deals involving large corporations, institutional investors, and governments.
👉 Check out our article about bulge bracket firms in investment banking to find out more.
Boutique firms in IB are smaller, specialized firms that focus on specific areas of investment banking. Unlike the large, full-service bulge bracket banks, boutiques tend to concentrate or specialize in a particular industry, product group, or geographic regions. For instance, they may not offer services like sales and trading or asset management, which are common in larger banks.
They also often don't have the large balance sheets typical in bulge brackets to provide underwriting and financing services. Instead, boutique firms focus on advisory services and ensure they are the best at their niche. But the boutique investment banks are not equal. They vary in size, focus, capabilities, and prestige. The category that people tend to compare with bulge brackets are the elite boutiques (EB).
👉 For a more detailed overview, read our article about elite boutique firms in investment banking.
At both bulge bracket and elite boutiques, you'll be placed into an industry or product group, although the structure and flexibility can vary. This will partly affect the projects you will work on.
At the large investment banking firms, the groups are highly specialized and structured. As such, your tasks will focus on specific functions, such as equity capital markets (ECM) or M&A within particular industries and rotations are hard. On the other hand, boutiques tend to have less rigid groups especially when deal flow in certain areas isn't great. This may allow you to work across multiple industries or deal types.
Something else that affects the tasks someone works on in the investment banking industry is role or hierarchy. In bulge bracket firms, the hierarchy is quite rigid and the role determines the responsibilities. Junior bankers often focus on creating financial models, conducting market research, drafting pitch books, and performing due diligence, while senior bankers focus on managing client relationships and deal negotiations.
In contrast, bankers at boutique firms tend to have a broader range of responsibilities because the teams are smaller and less segmented. This means junior bankers may take on more significant tasks, such as direct client interaction, greater involvement in deal strategy, and end-to-end project management, in addition to financial modeling and preparing presentation materials.
Bulge bracket firms generally offer higher base salaries and larger bonuses, especially at the more senior levels. That's because of their larger deal sizes, greater resources, and investment banking revenue generation.
However, compensation at elite boutiques can be very competitive, particularly for top performers. While base salaries might be slightly lower, bonuses can be substantial, sometimes even exceeding bulge bracket payouts. Some elite boutiques actually offer higher total compensation than bulge brackets.
Mid-market or smaller boutiques usually offer lower compensation compared to both bulge brackets and elite boutiques. So, the biggest pay gap is usually between bulge brackets and smaller boutiques, while elite boutiques often bridge the gap, offering competitive packages for top talent.
👉 Curious about how much you can actually make as an investment banker? Check out our article on Investment Banking Salaries!
Let's look at the pros and cons of working at a bulge bracket firm.
| Pros | Cons |
| Having a prestigious name on your resume can open doors to future opportunities. | Can be more hierarchical and bureaucratic, with less individual impact. |
| They generally offer competitive salaries. | Can lead to a narrow focus and limited exposure to other areas of finance. |
| Getting exposure to the biggest and most complex transactions can be invaluable. | Demanding work hours and intense competition. |
| Accessing extensive resources, including research, technology, and a large network not available elsewhere. | Limited direct client interaction, especially at junior levels. |
| Getting formalized training programs and development opportunities to prepare for a successful career in IB. | Intense pressure to perform and meet expectations. |
Here are the pros and cons of working at an elite boutique investment bank:
| Pros | Cons |
| More responsibility and ownership of tasks, even at junior levels. | Base salaries and bonuses may be lower, especially at smaller boutiques. |
| Direct and frequent interaction with clients. | Fewer resources compared to bulge brackets. |
| Opportunity to work on a wider range of deals and tasks. | May not be involved in the largest, most complex deals or deal flow might not be great. |
| More collaborative, entrepreneurial, and less hierarchical environment. | May not have the same brand recognition as bulge brackets. |
| Training may be less formalized and more on-the-job. |
Breaking into investment banking is a highly competitive process. To stand out from the other qualified candidates, you must focus on thorough interview preparation. Your goal should be to receive offers from top-tier firms, both boutique and bulge bracket, and have the luxury of choosing which firm to work with.
Here are our expert investment banking interview preparation tips that can help you achieve that goal.
Self-Study
Begin by dedicating time to self-study, covering key areas such as:
The beauty of the things you'll cover during self-study is that the knowledge you gain will be applicable to interviews with multiple investment banking firms.
Mock Interviews
In addition to self-study, incorporate mock interviews into your preparation. These practice sessions simulate real interviews, with someone playing the role of the interviewer, asking both technical and behavioral questions. They provide valuable feedback on your responses, body language, and overall presentation.
To get the most out of mock interviews, practice with peers, trained professionals, or experienced investment bankers who can offer constructive feedback. This will help you refine your communication skills, body language, and tone, while also getting comfortable with the interview format, timing, and pressure.
👉 Check out our Meeting Board and find like-minded peers to practice with!
Coaching
Investment in coaching can be a huge differentiator in the competitive investment banking field. An interview coach brings expertise and a unique perspective, having gone through the interview process themselves and helped numerous candidates succeed. They can help you:
When selecting a coach, look for individuals with actual investment banking experience and a track record of placing candidates at top firms. With the right guidance, you'll be well-equipped to ace your interviews and land your dream job in investment banking.
👉 On our Coach Directory, you can find experts that will help you ace your recruiting process!
Bulge bracket banks are the largest and most prestigious investment banks while boutiques are smaller more specialized firms. Being smaller doesn't mean they aren't desirable. Instead, some even pay higher total compensation than some bulge brackets.
The biggest differences between bulge brackets and boutiques is that BBs have large balance sheets, are present in all major financial hubs, and are often full-service. On the other hand, boutiques often specialize in certain industry groups or sectors and don't have the financial capacity to underwrite deals. To get job offers from the top firms in these categories, prepare through self study, mock interviews, and coaching.
