We get at least five queries a month from readers regarding this either-or situation. In celebration of all of you, we’ve compiled our five critical distinctions between the two most prevalent forms of consulting, as well as why you should engage in strategy consulting if you have the option.
First, a primer on strategy consulting for newcomers to the site gaining an insider’s perspective on a business’s strategy and operations demands you to rapidly become an expert on day-to-day operations in light of the overarching corporate goal. That’s a rather large ship to navigate, and with the CEO as your ultimate boss, more influence – and the advantages that come with it, such as a more significant income – are included.
Financial advice experts advise businesses on spending cash, managing debt, and raising capital for particular internal projects, acquisitions, and other critical development initiatives. Because of the leadership’s predetermined course of action, how might the company maneuver its assets (or acquire cash) to effect change?
One caveat – we are discussing financial advice consultants who work for huge organizations here, not individual financial counselors. Please do not mistake these two – they are not comparable in the viewpoint of an MBB business!
Additionally, we are not discussing consultants such as Oliver Wyman, who have a strategy consulting practice focused on the financial services sector or a strategy consulting firm’s financial services practice – those groups are much more akin to approach consulting than financial advisory consulting, and thus will not be discussed here (perhaps in an upcoming article).
Apart from definition, other elements distinguish strategy consulting from financial advising consulting. As a field member, the distinctions will affect who you run with, the kind of job you do daily, and even where you may pursue a future career. To begin, both strategy and finance are critical to the health of any business, and we are not arguing that process is more essential than finance or vice versa.
Rather than that, we’re revealing the “actual world of consulting” to assist you in cutting through businesses’ marketing pitches and gaining a better understanding of the day-to-day differences and long-term consequences of your work in both consulting disciplines. The top five factors contributed to the divide between strategy consulting and financial advice consulting (and why MC believes strategy consulting is the best option).
Strategy consulting exposes you to various business issues across multiple sectors
Financial advising professionals specialize in a particular sector. Finance dynamics and legal/compliance issues within each industry will be highly specialized, which means you will likely serve a limited number of customers and develop expertise in a single area over your stay. By contrast, strategy consulting allows for cross-industry collaboration.
Within months, a strategy consultant may go from identifying cost-cutting opportunities in a shipping company to developing strategies for advertising a new product in the technology business. Strategy and operations are ideal if you like to be on your toes, have a diverse work environment, and have professional ADD. Financial advice consulting will include a broader range of clients than working for a single firm but is more focused than strategy consulting.
Strategy consulting positions you to work directly for the CEO of a multinational organization
Typically, financial advising consultants work for a company’s chief financial officer. You may be allocated exciting jobs such as mergers and acquisitions or be assigned debt restructuring – you may find these duties engaging first. Still, they will rapidly become repetitive and excessively detail-oriented.
Generally, strategy consultants report to the company’s CEO, and you are responsible for the company’s most critical and comprehensive challenges. The engagements on which you’ll work are more likely to be brief (3-6 months), high-impact (one of the CEO’s top three priorities), and timely, which means you’ll have a direct effect on the company’s future.
Intellectual curiosity takes precedence over experience in strategy consulting
A significant advantage of strategy and operations consulting is the range of projects available, and organizations like BCG pride themselves on their unique approach for each client. The active learner’s intellectual curiosity will be piqued, and their need for new challenges will be satisfied since they will constantly be doing something new (at least for the first 2 years).
The objective of the financial advice game is to become as knowledgeable as possible in a single area. All of your suggestions have legal and regulatory ramifications. While you may rapidly establish a reputation as an expert in a particular area of finance for, say, airline businesses, your function is limited and may soon become tedious.
Because financial advice companies charge for experience and often have a considerably larger headcount, the expert model works better than the needed flexibility of a minor strategy consulting business. Strategy consulting organizations provide fashioned training after that offered at the world’s best business schools, such as HBS and Stanford.
Both strategies consulting and financial advisory consulting will put you on the fast track to the C-suite. Still, your paths will diverge; strategy consulting will lead to the CEO, while financial advisory consulting will lead to the CFO.
You are in pre-CEO training when you work in strategy consulting. You will be confronted with analytical issues regarding profitability and competitiveness and questions concerning team leadership and leadership growth. You’ll encounter situations where you’ll require experience as a CEO and solve the company’s most fundamental and urgent challenges.
As a financial advising consultant, you are training to become a chief financial officer. As CFO, you’ll be dealing with more analytical and skill-based issues. You’ll be creating the “how” to the CEO’s “what.” Again, there is a more focused approach and a higher bar for becoming an expert in a specific topic.
Exit possibilities in strategy consulting are unmatched
Generally, in strategy consulting, you will work across numerous sectors and many businesses within each area. This prepares you for a more considerable breadth of strategy and operations work and exposes you to a diverse range of potential employers. The reputation associated with MBB also helps; businesses vie for the tiny number of “proven” and trained strategists who leave these firms each year.
Due to the close-knit network that strategy companies provide, you are also branded for life – even if you left the company five years ago to pursue entrepreneurship, you would still benefit from the cheerful MBB glow when you return to corporate life (referencing first-hand observation of my peers here).
Financial advising positions will prepare you for another financial advice post, albeit one inside a different business. What is the primary issue? Once within the organization, your career advancement may stagnate as you develop an increasing level of expertise in a particular area or company.
Entering an industry job leaves little room for career exploration; therefore, if you’re in financial advising consulting, attempt to remain as long as feasible in the external consulting function. If we have not yet persuaded you of the distinctions and you are still unsure if financial advice consulting is the correct career decision for you, please understand that financial advisory consulting is the ideal career choice for a large number of individuals!
