If you're an analyst or associate in an investment bank, you're on the very lowest rungs of the ladder. You have many years and many thousands of hours to go before you can expect hit the really high earning ranks in investment banking. But don't assume that the role of an analyst and the role of an associate is the same.
We spoke to a selection of former and current investment banking associates. This is what they said about the transition between the lowest and second lowest job titles in investment banks.
In theory, moving from analyst to associate is a matter of time. You do your three years as an analyst and then you transition automatically to associate.
Firstly, the process has been messed up by the intervention of banks like Goldman Sachs, Citi and UBS, which have begun offering accelerated analyst programs. Here, you spend two years as an analyst before becoming an associate ahead of time. This may sound like a good idea, but recruiters complain that analysts in IBD who have been promoted early often have weak modelling skills and aren't properly prepared for future career progression.
Secondly, there's definitely some sifting that takes place before the associate promotions are made. "I saw people who were rolled off the analyst program before the associate promotions happened," says one ex-Goldman Sachs equity researcher. "They were the ones who couldn't demonstrate that they'd be able to work independently without supervision."
Some banks seem more likely to promote analysts to associates than others. "70% to 80% of us got promoted," says the Goldman researcher. "Most people do automatically get promoted from analyst to associate," says Rahul Parekh, a former executive director in the equity derivatives trading business at Goldman Sachs who now runs EatFirst, a healthy food delivery company. "If promotion doesn't occur it's usually due to poor performance," he adds.
Another associate, at an international bank in London, says promotion isn't as assured where she works. "Promotion is dependent on your rating as an analyst, and the process here is competitive. Only 3rd year analysts with above average (ie =>3) ratings get promoted."
Now that you're no longer an analyst, you might think you'll be doing totally different work. You won't - or at least, not at first.
"The roles don't automatically change," says Parekh. "People usually take more responsibilities naturally over time as they become more experienced and prove themselves capable."
An associate in DCM at a European bank points out that associates are still fairly junior, and that to begin with at least, you'll be doing much the same as an analyst: "Analyst three and associate one are pretty similar. It's only by the time you get to associate two or three that there's a change."
As you become more senior as an associate, your job will change, however.
How it changes will depend partly upon where you work.
As a trader, Parekh says he was given, "bigger and more important books to trade over time as my skills developed." Managers' expectation of his performance also increased over time, says Parekh - although he says this was more a function of tenure than job title.
In M&A, Mark Hatz, a former Goldman Sachs and Perella Weinberg banker who helps people prepare for banking interviews, says associates are required to take responsibility for the standard of the presentation materials they put together with their analysts. "The associate uses the analyst as his right man. The analyst works on the models and the presentations and the associate is responsible for the ultimate quality of the documents. He has to check the quality of his work and in some cases he will work alongside the analyst to help him out."
Being an associate is complex, says Hatz - you'll often be working on four or five projects at once, although sometimes you can work on as many as seven.
In equity research, the former Goldman researcher, says being an associate is all about showing that you can produce good work autonomously: "They want you to generate ideas and do the research legwork yourself. If you can't do that, you won't last."
The upside of being an associate is that you should work less. In his experience, Hatz says associates go home several hours before analysts do.
If you want to succeed as an associate, particularly in IBD, you'll need to be prepared to take responsibility, to be comfortable with complexity and to be good with people.
"Senior bankers will always ask associates about the documents," says Hatz. "They won't ask analysts." Associates need to take full responsibility for the quality of the analysts' production.
"There's a lot more variety in the projects you're working on," says another associate in IBD. "You'll need to be on top of them all, checking the analysts' models and outputs and messaging about the preparation of pitch books."
She says the worst associates are those who become arrogant and take their analysts for granted. Hatz agrees. Analysts work crazy hours and it's part of the associate's role to keep their spirits up. "You need to train them and make them feel supported and that they are not slaves."