Wall Street Prep

Investment Banking Career Paths

The career of an investment banker progresses along a fairly standard path

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Investment Banker Positions

The career of an investment banker progresses along a fairly standard path. Investment banking positions from junior to senior:

  • Analyst (grunt)
  • Associate (glorified grunt)
  • VP (account manager)
  • Director (senior account manager, rainmaker in training)
  • Managing Director (rainmaker)

Some banks call certain investment banker positions different names or have added levels of hierarchy. For example, sometimes banks separate Senior Vice President from Vice President. Other times, Director is split up into Director and Executive Director (more senior). However, regardless of the names, the general job functions of each relative position tend to be consistent bank to bank.

If you are an undergraduate, you are applying to banks with the aim of landing an investment banking analyst position. Assuming you do well, have an interest in staying, and there is a need, some banks offer direct promotions from analyst to associate instead of requiring that you go back and get your MBA (typically called “A to A”). If you are an MBA student, you are applying to banks with the aim of landing an investment banking associate position and aspire to work up the ranks to Managing Director one day.

The Investment Banking Analyst

Investment banking analysts are typically men and women directly out of undergraduate institutions who join an investment bank for a two-year program.

Analysts are the lowest in the hierarchy chain and therefore do the majority of the work. The work includes three primary tasks: presentations, analysis, and administrative.

After two years of working for the investment bank, top performing analysts are often offered the chance to stay for a third year, and the most successful analysts can be promoted after three years to investment banking associate. Analysts are the lowest in the hierarchy chain and therefore do the majority of the work. The work includes three primary tasks:  presentations, analysis, and administrative.

Investment banking analysts spend a lot of time putting together PowerPoint presentations called pitch books (click  here to see an example of a pitch book). These pitch books  get printed in color and are bound with professional looking covers (usually in-house at the bulge brackets) for meetings with clients and prospective clients. The process is very formatting intensive, attention to detail is critical, and many analysts find this part of the job to be the most mundane and frustrating.

The second task of an analyst is analytical work. Pretty much anything done in Excel is considered “analytical work.”  Examples include entering historic company data from public documents, financial statement modeling, valuation, credit analysis, etc.  Interview questions often focus on this part of the job and Wall Street Prep’s training programs are focused on demystifying the analytical work that analysts are expected to perform.

The third main task is administrative work. Such a task involves scheduling, setting up conference calls and meetings, making travel arrangements and keeping an up-to-date working group list of deal team members. Lastly, if you are the sole analyst on the deal and it is sell-side (you’re advising a client on selling its business), you may have control of the virtual data room and will need to keep it organized so all parties have access to the information.  It is an interesting experience in that there are several data room providers and many times they will try to win business by offering free sports tickets, etc. It gives you a chance to feel how your clients feel as you try to win their business.

The Investment Banking Associate

Investment banking associates are usually recruited directly out of MBA programs or analysts that have been promoted.  Typically, bankers will be at the associate level for three and a half years before they are promoted to Vice President. Associates are also categorized into class years (i.e. First Year, Second Year and Third Year or say, Class of ‘05, ‘06 and ‘07). The number of years it takes for Associates to get promoted actually depends on the bank. Sometimes it could be more than three and a half years if there is not a need for another Vice President.

At that point, an associate should evaluate whether it makes sense to stay at the bank or try to move elsewhere to receive a promotion.

The investment banking associate’s role is similar to the analyst’s role, with the additional responsibility of serving as a liason between junior and senior bankers, and in some instances, to work directly with clients.

How Analysts and Associates Work Together

Analysts and associates work very closely together.  Associates check the work of analysts and assign them tasks.  Checks could be in-depth where the Associate literally looks through models and checks inputs with filings or it could be much more high level where the Associate looks at an output and determines whether the numbers make sense.

The Senior Bankers (VPs and MDs)

Senior bankers primarily source deals and maintain relationships. Senior bankers have a wide variety of past backgrounds ranging from investment banking to corporate executive management.

Aside from relationships, senior bankers often understand their industry landscape at a very detailed level and can anticipate deals in the sector. As economic environments shift, they anticipate when companies will need to raise capital or when strategic discussions (M&A, LBO) are necessary. By anticipating such needs, Managing Directors can start crafting appropriate pitches early-on to clients with the aim of turning these pitches into live deals.

More Resources

http://www.wallstreetprep.com/blog/ma-analyst-day-in-the-life/

Comments

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Thylambal
Thylambal

Morning Sir,

I have completed my MBA in Investment Banking (Distance) from ICFAI university. I have no working experience. Is it possible to build my career in investment banking.

Haseeb Chowdhry
Haseeb Chowdhry

Thylambal,

Hope all is well! I think you can definitely build a career in IBD. What specific questions do you have about the process? It definitely requires a solid amount of networking with people in the field, and you also have to have a very good idea of the opportunities in the local market you are targeting. Let me know if you need additional specific points of clarification – thanks!

– Haseeb

Ganesh
Ganesh

Hi Sir
I am graduated from Accounting and finance course..in current year only.n I also doing a (Investment banking course from institute).it is possible to build my career in Investment banking

Haseeb Chowdhry
Haseeb Chowdhry

Ganesh – definitely – get to networking! Good luck!

rajendra
rajendra

hi sir,
I have completed b.com and pursuing distance MBA finance from ICFAI university I m deaf with both side. I cannot communicate well. I have no experience. after my MBA am I eligible for investment bank associate jobs because I can’t oral communicate . plz reply me soon…..

Haseeb Chowdhry
Haseeb Chowdhry

Rajendra,

You definitely have opportunities as companies understand the need for diversity and will accomodate individuals from diverse backgrounds – I would say you definitely have a chance – good luck!

Teja
Teja

I have academics in 65 + I want to get into investment banking. With lower scores how can I make it happen? Does a good gpa in B school compensate low academic scores for I banking? What are the other ways I can improve my profile?

Haseeb Chowdhry
Haseeb Chowdhry

Teja,

I’m sorry – are you planning on going back to school for an MBA? I’m not sure I fully understand the question. In general, yes, strong academics is key, but there are ways to get your foot in the door after an MBA. And yes, you need to do well in your MBA program as well. Thanks.

Best,
Haseeb

Teja
Teja

Yes I would likely to go for mba. If I get good grades in mba do I have chance to get into i banking?

Haseeb Chowdhry
Haseeb Chowdhry

Definitely – that is a solid route!

Teja
Teja

What about Indian investment banks? Even they require good academic scores?

Haseeb Chowdhry
Haseeb Chowdhry

Teja,

I’m not an expert within the Indian market, so I cannot comment on this – apologies.

Best,
Haseeb

Srikanth
Srikanth

Hi,
I am pursuing my pgdm in the field of finance from Hyderabad. I want to become a vice president in an investment bank. So what additional courses should I do, like CFA, to get that position and can you tell me about the career path. Your suggestion will be really helpful. Thank you.

Haseeb Chowdhry
Haseeb Chowdhry

Shrikanth,

What is the PGDM designation? Normally, to become a VP at an investment bank, you need to have been an Associate, which is typically the rank you get hired at after an MBA. As an associate, it might take between 3-5 years to get promoted up to Vice President. Hope this helps – thanks.

– Haseeb

Ranjan
Ranjan

Dear Haseeb Greetings ! This post was quite insightful and I found it useful for my research. I’m eagerly interested to learn finance and build a career in the financial services industry. I currently live in India and hold a bachelor’s degree in commerce. I also have an experience of one year in Business development. In order to further my education, I’m planning to apply for a relevant masters degree to Business schools in the United states or Canada THIS YEAR. My questions 1. Is it possible for someone who has an undergraduate degree in business but no work experience… Read more »

Haseeb Chowdhry
Haseeb Chowdhry

Ranjan, 1) Yes – if you are going for an MBA and specializing in Finance and/or Accounting 2) It would be helpful to obtain transferable work experience in finance/accounting roles (Corporate Strategy, FP&A), or at a financial services firm 3) Yes – but, you need to probably get into a top 20 MBA program to be competitive for the top finance jobs (banking, trading, equity research) after an MBA; an alternative degree to look into is the Masters’ of Finance 4) Yes – but along with the degree came a lot of networking, hustle, drive, and resilience 🙂 Hope these… Read more »

Ranjan
Ranjan

Hi Haseeb,

Thanks for the reply !!

Indeed these answers help make a lot more sense in addressing the questions I had in mind.

Thanks
Ranjan

Mihir rajyaguru
Mihir rajyaguru

Hi,
Currently I am working with a private bank in india into retail branch banking with 11years of experience. Currently I am handling branch of 8 resources.
I want to further build my career as an investment banker.
Kindly suggest.

Haseeb Chowdhry
Haseeb Chowdhry

Mihir,

The best ways to get into investment banking are to get an MBA or pursue graduate studies, particularly if you have had extensive experience in one field. Happy to provide additional feedback if necessary – thanks.

Best,
Haseeb

ROHINI
ROHINI

HI,
Please suggest me i have done MBA in marketing and i want to start my career in investment banking so is it possible for me to start through doing a certification course in investment banking for 2 month.

Haseeb Chowdhry
Haseeb Chowdhry

Rohini,

Good question – where are you trying to enter the investment banking profession? The US, Canada, or Europe? Would love to provide more targeted advice – thanks.

Haseeb

A.rakesh singh
A.rakesh singh

Hi., Can you please advise me how to start my career in investment banking as mine age is 29 and I had 3 year experience in MNC company (genpact).As a investment banker in kyc process.please help me off. Thanks

Haseeb Chowdhry
Haseeb Chowdhry

Rakesh,

Do you have an MBA? That is typically a solid way into entering an IBD program, but it depends on the market. I cannot comment on international markets, but for the US, Canada and Europe, the typical process is either to obtain an MBA or Master’s in Finance, and then to join the recruiting cycle. Hope this helps!

Best,
Haseeb

sumit soni
sumit soni

Dear sir/mam,
I am a qualified Chartered Accountant from India. I want to build my career in Investment banking. I want to know whether by pursuing Executive MBA ( i.e PGXPM) down the line after five/six years will help me to boost my designation to the top hierarchy or not. Moreover is it advisable to pursue Executive MBA if someone is willing to build career in Investment banking?

Haseeb Chowdhry
Haseeb Chowdhry

Sumit,

An executive MBA is rare for a banker, but it may be possible at higher levels (i.e. Director level)…typically bankers do full time MBAs and join as Associates. Hope I answered your question – thanks!