How does the investment banking hierarchy work?
Specifically, how do bankers climb from entry-level position to the corner office?
Everyone getting into the industry should expect a totem-pole style of hierarchy. That’s right — straight up, first one stepping on the second one, second on the third and so on.
In terms of how to climb up the totem pole, there is no choice – it’s either up or out.
You do all the grunt work, boring administrative chores, and everything that no body wants to do. You have 3 core duties:
1. Routine Work (when you have no active deals or have down time)
2. Administrative Work (when you have active deals)
3. Financial Modeling
(Yes, I have done all these.)
As you can see, financial modeling is a tiny part of your analyst’s life. Expect your life full of deadlines and last-minute calls doing administrative and all sorts of grunt work. But you are rewarded by the unrivaled exposure and networking opportunities that can be priceless to your future career, whatever it may be.
a.k.a Glorified Analyst, you are one step above the analyst but everyone else is breathing over your shoulder.”
The Associate’s primary job is to make sure the analyst finishes the task properly and on time. This would mean:
What a grand title, but in the World of Investment Banking it refers to a middle management role.”
After 3-4 years an Associate will be promoted to the VP position. As an “officer”, VPs are expected to gradually bring in new deals and clients, which means that the banker has to transform himself from a technical person to a sales person.
This is a vastly different skill set and many “star” junior bankers struggle to in their new role because their strength (usually technical skills) no longer applies to the new job.
Another major role of Vice President is to lead the execution, under the guidance of senior bankers. You thought the MD runs all the deals? He/she prefers to spend the time brewing up other deals and getting more businesses.
SVP is, literally, a more “senior” VP and spends half the time executing deals and the rest bringing in businesses.
In Goldman Sachs, SVPs are known as Principals. For most investment banks in Europe and Asia, SVPs are called Executive Directors.
Top of the world… in the office.”
MDs run the house: they are the revenue generator and have all the say in the bank. Of course, there are still distinction between junior MDs and those sitting in the corner office — the true rain makers.
MDs do have tough revenue targets and hopefully by the time you are in this position you have a large network of clients who can give you business in different stage of the investment cycles.
Are All MDs Nasty People?
Not really, but many are either pretty anal or have some kind of split personality — Who wouldn’t be if one instance you are the king in the office, and in another instance you are begging for business from the client (who earns much less than you by the way).
Did I hear a Yes?