Investment Banking Career Path (2024)

Investment Banker Positions: Junior to Senior Progression

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.

Learn More →Investment Banking Primer

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:

Building Presentations
Financial and Valuation Analysis
Administrative Tasks

Investment banking analysts spend a lot of time putting together PowerPoint presentations called pitch books. 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 formattingintensive, 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.

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.

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 liaison 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.

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 (, 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.

Step-by-Step Online Course

Everything You Need To Master Financial Modeling

Enroll in The Premium Package: Learn Financial Statement Modeling, DCF, M&A, LBO and Comps. The same training program used at top investment banks.

Enroll Today

Investment Banking Primer
Investment Banking Analyst Salary Guide
Front Office vs. Back Office
Investment Banking FAQ

Comments

60 Comments

most voted

newestoldest

Inline Feedbacks

View all comments

hajar

February 1, 2021 1:44 pm

I’m a finance student and I want to know more about investement banking jobs and which job as a starter I can focus on after my graduation? and can I learn stg that could help me later like a software or a skill besides my studies because I have some…Read more »

rajendra

June 22, 2018 8:01 am

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

July 26, 2018 9:31 pm

Reply torajendra

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!

Jake

July 27, 2020 12:05 pm

I’m 22 and recently graduated from an in-state university with a Finance & Business Econ dbl major. We’re in the midst of a pandemic and I don’t have IB/PE experience (late bloomer that never had an IB/PE internship).. I’m hoping to get in the door but all I’ve really done…Read more »

Jeff Schmidt

July 27, 2020 3:02 pm

Reply toJake

Jake:

The best way is to network like crazy… find some alumni from your school that went into banking and see if they can help.

Best,
Jeff

rajnish

August 15, 2019 10:26 am

for Past 13 years I have tried to run my own business. I am getting some international patent for my inventions. I find that running a business is very difficult and it takes you down the road of extreame frustation until it becomes success. I might get some success. But…Read more »

Jeff Schmidt

August 15, 2019 10:38 am

Reply torajnish

Rajnish:

It will definitely be difficult without an MBA from a top school. See if you can find a network given your background and where you are from and reach out to them for advice and/or recommendations.

Best,
Jeff

rajnish

August 15, 2019 12:09 pm

Reply toJeff Schmidt

Which MBA to go for a normal one or an EMBA. And what B-school to target

Jeff Schmidt

August 15, 2019 8:11 pm

Reply torajnish

Rajnish:

Honestly you would need to target a top 20 B-school and I would avoid EMBAs. You can still get an investment banking job outside of the top 20 but it just makes it a little harder, especially considering your background and age.

I wish you luck!
Jeff

Ismail Elkhatib

May 31, 2019 5:32 am

I’m a 19 year old, dreaming of becoming a investment banker I’m in college trying to finish with a BBA; Concentration in finance. Any tips you could give me to help me figure some stuff out in the future?

Jeff Schmidt

June 2, 2019 12:55 am

Reply toIsmail Elkhatib

Ismail: – Get awesome grades – Read vociferously about the markets – Understand GAAP/IFRS/Acctual Accounting concepts, Financial Statement Analysis, how to interpret footnotes and how to do M&A and/or understand M&A tax accounting – Really understand how to apply Finance topics to analyzing businesses. NPV or IRR the everything you…Read more »

Ismail

June 2, 2019 2:16 am

Reply toJeff Schmidt

Thank you so much. I really appreciate the help

Jeff Schmidt

June 2, 2019 8:31 am

Reply toIsmail

Ismail:

Great! Glad to hear it.

Cheers,
Jeff