Working in an agency give you breadth: you will be working on a variety of projects and probably employing an equally wide variety of tools. Assuming you work on a number of projects, you will be exposed to quite a few clients, all very different, which will stand you in good stead for the future. And you’ll learn to do awesome documentation.
Life client-side is completely different. Its all about patience, taking a long term view and, most critically, stakeholder management. This side of the fence, the quality of outputs is less important.
As to which is better, I don’t think there is a clear cut answer. The longer you stay on one side, the harder it is to switch over to the other. Too much time agency-side, can make you impatient and superficial, ready to leap before looking too hard. But is can also keep your creativity - and your confidence - levels high. Too much time client-side can make you less of a blue-sky thinker, as your familiarity with the system makes you second guess what could be possible. But your diplomacy skills will be second-to-none.
So, which way to go? The answer, as always, is that “it depends” - on you, on what you’ve done before, on what you feel happiest with, where you want to go in the future. Me, I can’t decide. Which is why I do a bit of one... then a bit of the other... Best of both worlds!