Careers in Financial Markets
Each financial services firm has its own culture and personality. Some value the latest in cutting edge state of the art strategies while others take pride in their tradition. Some celebrate the art of the deal, while others praise diligence and integrity. Financial firms come in all shapes and sizes from global giants like Citigroup and Bank of America with tens of thousands of employees to smaller boutique firms of less than a hundred. Despite their differences, most share a common approach to organization and job titles.
The first rung on the ladder is the analyst. In corporate finance, they're basically number-crunchers who study a firms financial reports and put together pitch books. In research, they help cover companies and sectors. In sales, analysts call clients on non-crucial matters. Analysts assigned to the trading floor can't trade until they've passed their regulatory exams. Even once they have, they're heavily constrained until they prove they're not going to press the wrong button and lose millions. Most banks keep analysts in place for three years before promoting them.
Associates are either analysts who've made the grade or business school students who've joined the bank after earning their MBA. Typically, associates manage and allocate work to their own teams of analysts. Here again, they usually hold their position for three years.
Vice presidents manage the day-to-day affairs of associates and analysts, and usually have more frequent contact with clients. Those working in sales, trading or research often have their own book of customers, more flexible risk parameters when trading or their own list of companies to research. Because sales people and traders operate on their own, exceptionally talented trading-desk VPs can make more money than their firm's managing directors. VPs stay in place for longer than the typical three years. Some jump to another bank to advance. Those who don't advance at one bank often jump to another where they can join at the next higher rank of Director or Executive Director.
Director or Executive Director
Directors and executive directors are the right hands of investment banking's leaders, the managing directors. In corporate finance, executive directors help MDs handle relationships with client companies. In sales and trading, they call bigger and more important clients and place ever larger trades.
Managing Directors are the upper echelons of the investment banking hierarchy. These are the rainmakers who bring in business and the big deals. Only a few of those who start as analysts ever make it to this level because banks typically promote only 6 to 8 percent of its directors to managing director each year. At the end of the day, individual performance, revenue generation and client service are keys to moving up in the investment banking world. How long does it take? It's not unreasonable for a hungry and highly effective new analyst to become a managing director in his or her 30's.