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The mistakes made by new associates in investment banks

It's a long road

It's a long road

Analysts in investment banks across the City and Wall Street are no longer bottom of the career ladder. Investment banks have just promoted their third-year analysts to associates – or even quicker in the case of banks with new accelerated training programmes – and for juniors who have been battling the demands of a 70+-hour working week, a whole new challenge awaits.

Before analysts become fully-fledged associates, they must spend a transitional period as ‘associate 0’. If this seems like a gentle way of ingratiating yourself into the role, it’s actually a test. “You’re not automatically treated like an associate. At this point, you get a flavour of what’s to come and must prove that you’re capable of running things with little or no supervision,” says Danyaal Shah, a VP working an at investment bank in Canary Wharf.

Now that analysts have moved up, more is expected of them. This is how to survive, according to investment bankers who have been through it.

1. New associates expect the change to be immediate 

For the first time in three years, analysts are no longer bottom of the rigid investment bank hierarchy. The work required to get here is substantial and the learning curve is incredibly steep. To think that a new title suddenly means you drop all responsibility from your previous role is a misnomer, says Mark Franczyk, who worked in equity capital markets at J.P. Morgan for ten years before leaving to become a pastry chef and blogger.

“Don’t expect that everything will change overnight. It won’t. A new associate will still have to do a lot of ‘analyst work’, perhaps for many months. If you act as if such tasks are below you, you will fail. No matter what level you achieve, your primary role is always getting things done,” he says.

2. New associates forget that the buck stops with them

Analysts are forgiven for mistakes, because associates are supposed to pick up on them before an MD ever gets to lay eyes on their work. Maybe an analyst who coasted through their training programme will have been shown the door anyway, but if you haven’t learned the necessary lessons, becoming an associate is the time when you will be found out.

“The biggest change to adjust to is that you’re suddenly very accountable,” says Shah. “By the time you make associate you should be an expert in your particular business area or sector. No mistakes should pass through you. MDs will forgive analysts, but they’re unlikely to forgive associates very easily.”

“As an analyst, you are focused on analytics – the never ending churning of data. Often times you have no sense of where that analysis is going. Even when you want to, it can be hard to have a view of the bigger picture,” adds Franczyk.

3. They spend too much time firefighting and not enough planning

As analyst you are given a steady stream of work by your associate that needs to be done in a timely and accurate manner. As an associate, not only must you understand what can and should be delegated, you must make time to plan for additional responsibilities. Suddenly, the number of meetings – both internal and external – you’re expected to attend will increase.

“At first it can be overwhelming,” says Shah. “If you’re the sort of person who doesn’t pay attention in meetings, or fails to follow up or understand the key action points, you’ll struggle. What’s more, when you’re out with clients, you need to have answers for whatever might come up. The onus is unlikely to be entirely on you, but you represent an investment bank and clients expect anyone working on the project to be an expert on what they’re trying to achieve.”

The key, says Shah is being able to delegate enough work to be able to plan sufficiently.

4. They get lost in the moment and stop learning and understanding

Talk to any analyst for five minutes, and you’ll inevitably hear the term ‘steep learning curve’. The first three years on the job can be brutal, but you simply can’t stop progressing once you hit associate, says Shah.

“The silver lining of being an associate, despite the increased responsibility, is that you’ll be able to delegate some of the more medial or repetitive tasks,” says Shah. “The key with moving to associate is being able to solve the problems on your own and really understanding them.”

“You’re still years away from running the show, but your primary focus is no longer ‘what are we doing?’ but rather ‘why are we doing it?,” says Franczyk. “A good analyst can succeed by producing a perfectly functioning model. An associate needs to be able to understand, and have a view, on what the output shows.”

5. They think like an associate, instead of a VP

By the time you’re in your final year as an analyst, you “already be working at associate level,” according to the head of HR at one US bulge bracket investment bank. When you make it to associate, your focus should be on what it takes to make to VP.

“The big deal about making associate is that you are now officially on the seniority escalator and need to start behaving as if you want to do the next level,” says Kevin Rodgers, the former global head of FX at Deutsche Bank, who is now an author and market commentator.

“The biggest slip up is that employees kind of expect the promotion as a matter of course simply for having lived long enough. It doesn’t work like that,” he says. “To be an associate means that you are aiming to be a VP and sort of acting that way. Similarly, a VP promotion means you a starting to act a bit like a director – and so on. So just sitting back and doing what you are told is the easiest way to be overlooked.”

Contact: pclarke@efinancialcareers.com

Photo: Getty Images

Comments (17)

  1. I work in M&A and have been promoted to Associate level after my two years and can say I didn’t find the Analyst level job at all difficult or interesting.

    So if I had left it would have been due to the dull work. I stuck with it though as hoped for a light at the end of the tunnel and sincerely hope the associate position offers more responsibility.

    I have been in the Associate position for a few months and have seen little difference. I was as the article mentions working at this level towards the end of my analyst position so have not seen a great change yet. The only positive I can see at the moment is that I am getting paid well compared to other jobs I could be doing but if the work does not pick up fast I will either have to look at another industry which I fear will not be much better.

    I am at a well known Investment Bank which any candidate interested in banking would have heard of. The job is interesting at times but I would sell it as more time consuming then difficult but well paid.

  2. Working as an analyst in an investment bank is a fairly brainless task. I think your sources in HR and recruiting have exaggerated the difficulty. If you can tolerate the long hours, unchallenging work, and the high number of unpleasant, unbalanced colleagues you will have to work with – you will make it through to the Associate promotion. Most people who fail at this hurdle do so because they realise they don’t want it as much as they thought, not because they lack the ability.

    It’s worth doing because it will open the door to far more interesting jobs outside of the bulge-bracket.

  3. I work at a German Investment Bank and I got promoted to an Associate level.I’ll tell it’s quite hard and difficult.I’m already thinking of changing industries as I cannot take the long hours.

    www.reallottowin.com Reply
  4. I think it depends entirely on the area you work in, I work in Sales & Trading as a 1st year analyst, which is tough but no where near as harsh as Investment banking. To be in Sales & Trading isn’t difficult it just takes the right person, ie. switched on and a fast learner.

    To be in investment banking you have to have much more stamina, I have friends on analyst programs in IB and they literally don’t have a life outside work. So for those who wish to follow this path, think about it very carefully.

  5. Well it all depends on with whom you work, even in a same team few can be fun working with and rest sucks. The work in my rational belief is simple but very lengthy, which sometimes takes the toll. The best part about working in an I-bank is the payroll. But mind, not every one is damn lucky to get the gold. You have to have decent potential with politics in blood to RISE. Survival is easy.

  6. I work as an Analyst at a ‘big 4’ accountancy firm doing corporate finance. Much like the IB jobs detailed above, the work is often dull and unrewarding. To survive the task you must be able to tolerate the boring work, the numerous frustrated investment bankers and the politics and bureaucracy that accompanies a firm where the good are held down and the weak are rewarded with continued employment. The more intelligent individuals quickly realise they have been conned and look for a career away from finance.

  7. I cannot emphasize enough how important it is to network within your own organisation, build contacts outside it and be visible. If you have a chance, you are well advised to attend all social events and try to find a connection with more senior colleagues. Whilst hard work is important, appearances and impressions are more important than anything else. You also definitely need to build positive chemistry with at least one senior high-flier and will need to be liked and noticed by many people.

  8. Try Try Try

  9. Big4Analyst I agree. But what else can we do which pays on par with banking. very few other professions offer work which is more rewarding at least in banking I am getting paid well compared to other industries.

  10. People who work in I-banking are simply losing their youth – the lost years won’t come back so enjoy life while you can. Money is not everything.

  11. At the end of the day, all investment bankers share the same gene – greed. They lack any sense of enjoyment of life and by the time they relalise this, it’s too late and money (and other boring, rich bankers) are their only comfort.

    Bankers don’t really add any value (if they did, the comments above would echo more job satisfaction). They may be necessary to underwite the deal (a task for which the deal size fee base ensure they get paid well) but they really just go through the motions from one deal to the next.

  12. I am an ex-Associate in IBK. The consultant above is not entirely wrong but I don’t think that consultants add much value either until they get to VP or MD level.

  13. I-Banking is for brainless corporate tools. Smart kids become traders.

    The major problem with trading is that the income is much more performance-dependent, and thus, most wannabe traders will fail. However, “star” traders get such fat compensations that it would make IB lose their little hours of sleep. IB is boring, the hours are very long, but at least all i-bankers make money.

  14. Can anyone advise of the various packages offered A-to-A’s? particularly keen on additional vacation time (some firms offer up to 6 weeks) in Europe. any official bits would be very much appreciated.

  15. YES! Smart kids become traders! Or maybe Sales?

  16. “People who work in I-banking are simply losing their youth – the lost years won’t come back so enjoy life while you can. Money is not everything.”

    Totally agree. I worked my nuts off to get a job in trading. Then I was told my standard working hours would be 7am to 8pm (oh and no-one takes their holidays). If you include traveling, this only leaves time for sleep. By the time I’d have left with my bundles of money, I would have lost most of my youth (not to mention the extra stress related aging)

  17. Been at Goldman. In my opninion what it takes to get to an associate, hard work and know the right people.
    Also as someone stated be nice to colleagues, even though most of them are very unpleasent.
    You basically have got to be nice to people, yet not appear like you not a dog.
    You also have to be prepared to work hard and long hours. 60 per week. and also tolerate abuse from fellow workers.

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