by Brian DeChesare Comments (116)

From Analyst to Associate and Beyond: How to Get Promoted In Investment Banking

From Analyst to Associate and Beyond: How to Get Promoted In Investment Banking

So, what happens if you’ve lost your mind and suddenly don’t want to move into PE, go to a hedge fund, or become a venture capitalist?

You continue on in banking, and move from Analyst to Associate – and beyond.

If you’re in the US, you might be wondering why you’d ever want to do this – but in other parts of the world exit opportunities are less hyped and many bankers actually remain bankers.

Plus, if you don’t get any buy-side offers you’ll have to stick around in banking anyway – so here’s how to get promoted and how to avoid turning into Patrick Bateman in the process.

Why Would You Want to Get Promoted?

The usual arguments for moving to the buy-side are strong:

  • Improved hours (maybe)
  • (Potential for) Better pay
  • More responsibilities
  • More interesting work

Of course, there are downsides to the buy-side as well and it’s not right for everyone.

If you’re a really social / “salesy” person who likes a fast-paced environment, staying in banking might be a better fit.

Plus, once you get to a certain level the “Show me the money!” arguments make less sense because any MD will make far more money than he has time to spend – even if he quits and moves to Buenos Aires.

How Common Is It?

The often-cited statistic is that 10% of investment banking analysts move on to become associates.

But that’s misleading because it doesn’t indicate a 10% “admission rate” – the majority of analysts don’t want to be promoted.

The top analysts usually leave for the top PE firms and hedge funds, and everyone else is too burned out after 2 years of investment banking hours to want to stay in banking.

But banks that desperately need to hire would much prefer a seasoned analyst to a freshly minted MBA – knowing how everything works saves months of time and piles of money.

So the option is there if you want it – but most analysts don’t, which is why you hear that it’s very difficult to advance.

What’s the Difference, Anyway?

The roles are not that much different since they’re both classified as junior bankers, but:

  • Associates manage analysts and communicate directly more often with senior bankers.
  • Associates get more client exposure and speak to management teams on more than just technical details of models, as analysts would.
  • Banks assume that associates want to stay in banking for the long-term, whereas they know that many analysts will be gone after 2-3 years.
  • When something goes wrong, the VP will blame the associate before the analyst since the associate was responsible for his work.

Hours may be slightly better for the associate, and base salaries and bonuses are both higher – good news if you have $150K or so of business school debt outstanding.

How Do You Do It?

First, you need to become a 3rd year analyst – that’s the standard in the US, UK, and pretty much all other countries.

The 3rd year offer comes via mutual consent – senior bankers approach you midway through your second year and sit down to discuss whether or not you want to stay on.

In 99% of cases they already know whether or not they want you to stay – that’s what happens when you spend 80-100 hours per week with the same group of people over 1-2 years.

So it’s more a question of what you want to do in relation to your performance.

In addition to all the usual qualities an analyst must have – attention to detail, not screwing up models, multi-tasking, and so on – you need a couple extra qualities to get a 3rd year offer:

  1. Leadership – Do you mentor 1st year analysts and summer interns? Can you manage those below you without causing an insurrection?
  2. Profit – Are you saving or earning more for the bank than you’re costing? Just like in PE, no one will keep you around if you have a negative ROI. This is finance, not non-profit land.
  3. Senior Banker Fans – Will senior bankers in your group go to bat for you when it’s time to make a decision? If not, you need those types of relationships to get a 3rd year offer.

There’s no quick-fix solution to achieving any of this, so you need to be thinking about these points from day 1 and actively working on them as you move from your 1st year into your 2nd.


To be more specific, here are a few examples of behavior that won’t get you promoted and behavior that will get you promoted:

  • Non-Promotion: You give a 1st year analyst a set of public comps to complete and check his numbers before giving it to the associate or VP.
  • Promotion: You give the analyst a set of public comps, but in addition to checking his work you think of another company that would be good to include because it boosts the valuation significantly. You run the idea past the associate or VP and point out that it may help with winning the deal.
  • Non-Promotion: You look through a 1st year analyst’s operating model for a client and find that all the numbers are correct before giving it to your associate.
  • Promotion: You look at the analyst’s operating model and find cost-saving opportunities for the client, which you can pitch to PE firms as an easy to boost their returns if they acquire the company. You also teach the younger analyst how to create scenarios in his model to support this.

Neither of these examples is a big deal by itself – it’s more about going above and beyond what you’re asked to do consistently, over 1-2 years, than discovering the magic bullet promotion solution.

…And Then From There

Once you’ve become a 3rd year analyst, you then need to get an associate offer.

You need to demonstrate the same criteria as what’s listed above, only more of it – rather than just informally helping out new analysts, you need to give analysts instructions and see pitch books and models through to completion.

At this level, more senior buy-in is required – your group head needs to like you, and the senior bankers need to say, “We like this guy/girl, he/she has run a bunch of deals and acted like an associate for us, and is ready for the role.”

This is a lot of self-selection here – if you want to continue in banking, chances are you’ll step up and start contributing more.

And if you don’t, you’ll probably be going home early every day or waiting to bounce when your new job starts anyway.

Boutiques vs. Bulge Brackets

Some argue that it’s easier to get promoted at boutiques because they need the manpower and because there’s more competition at bulge brackets…

…which can be true, but it’s definitely not a rule.

The key difference between small and large banks holds true here as well: it’s more random at boutiques.

You might be at a boutique where the loss of 1 key associate means they need someone ASAP; or you might be at a bank where turnover is low and hardly anyone moves up.

At bulge brackets, by contrast, the process is more standardized and you’ll most likely catch neither a lucky break nor an unlucky break.

Other Groups

On the sales & trading side, there’s not quite as much confusion over analyst to associate promotions because that’s where most associates are coming from anyway – MBA hires with no S&T experience are rare.

Most traders move up the ranks because they’ve made a lot of money, not because they went to a top business school – so the profit part of the equation above is even more important if you want a promotion there.

Analysts and associates exist at other institutions like hedge funds, private equity firms, and so on, but sometimes there are limitations on how much you can advance.

For example, if you’re hired as a Private Equity Analyst right out of undergraduate, there might be no option to advance to the Associate level – the firm might expect you to go to business school or move elsewhere after 2 years.

Is an MBA Required?

Nope, and the degree won’t necessarily help you.

Finance, unlike most other industries, is driven more by results than internal politics.

No one’s going to say, “This guy got an MBA from HBS – therefore he should be promoted to VP over this other guy who doesn’t have an MBA.”

Instead, they’ll say, “This guy has really good reviews and worked on a bunch of high-profile deals – clients love him, and he’s starting to develop relationships of his own. Let’s promote him.”

Some bankers argue that even if you don’t need an MBA, you should go back to school anyway to gain a broader perspective and network.

There is some merit to that argument, but most bankers who go back for the degree use it as a 2-year vacation.

You will learn a lot and meet a lot of people – and that may make you a better associate.

But it’s a stretch to say that an MBA is required to advance.

But Will They Pay For It?


When times are frothy some banks may cover the expense if you agree to return in 2 years, but that is rare.

There’s no actual difference in pay or responsibilities if you get an MBA vs. if you just advance naturally – there’s far more of a difference between the associates with no banking experience and former bankers.

In sales & trading, you may be at a disadvantage with an MBA – direct promotes are usually given a portion of the trading book, but you won’t have that if you’re graduating and moving to a new firm.

What About Exit Opportunities If You Make the Analyst to Associate Move?

Don’t hold your breath.

It’s easier if you’ve been an investment banking analyst, but there’s still a strong bias against hiring associates because they’re perceived as “career bankers.”

So don’t use an associate offer as your backup plan unless you’re 100% set on banking – otherwise you will be pigeonholed.

If you do realize you want to move to the buy-side, do it quickly – it’s much easier to move over as a newly promoted associate than as a 3-year veteran.

OK, But Do You At Least Get Some Nice Perks?

Usually you’ll get a signing bonus comparable to what new associates would get – around $40K – plus a few weeks to a month off and the option to attend “training.”

If you’ve been an analyst for 3 years, “training” has no value for you so it’s really just a long vacation.

Those are the main perks – plus, of course, you won’t be treated like a newbie who knows nothing about banking.

So, Should You Do It?

Choosing to become an associate is more of a career choice than moving to the buy-side or going to corporate development at a Fortune 500 company – in those roles you have more mobility and you can hop around to different positions.

But at the associate level, you’re expected to stay in banking for the long-haul – so if you’re not 100% committed, do not use it as a backup plan.

Staying in investment banking for the long-term can be a good career, but you will be more limited if you make the leap.

And After You Get Promoted…

You’ll get more responsibility, you’ll have to formally manage analysts, and you’ll need to start thinking more like a VP.

You won’t be expected to pull in clients yet, but you do need to start building relationships and making yourself known as more than just another nameless analyst.

The hours may be a little better, but you won’t see a big improvement until you’re more senior – and even at the MD level, ruined weekends and being on-call 24/7 are still expected.

And yes, pay improves as well, but you still won’t be making $1 million+ until you’re a more senior VP or MD – which is not easy to do.

If you do well and prove that you can execute deals with little supervision, you might just get promoted to VP.

The VP’s Dilemma

But lots of promising bankers stall out at the VP level because you have to balance 2 huge, often conflicting tasks:

  1. Executing deals and making sure all the presentations, books, and meetings go as planned.
  2. Bringing in clients and developing relationships.

If you devote too much time to #1, #2 suffers – and vice versa.

Because of this dual responsibility, your hours may not even improve much – you’re busy with potential clients during the day and you’re occupied with deals at night.

And while MDs are also under a lot of pressure to bring in clients, that’s all they do: they don’t need to juggle sourcing with execution.

The VP to MD transition is the toughest one in banking, and that applies on the buy-side as well – going from due diligence, model-crunching mode to sourcing investments is a delicate balancing act.

If you’re a star, you might move from VP to MD or Senior VP in only 2-3 years; more often it’s around 4-5, and if it takes longer than that you’ll probably be making a trip to the conference room in the near future.

Is It Really This Hard?

Did you really expect to make millions of dollars per year without putting in a lot of effort?

Of course it’s tough – if you’re looking for something easier, though, I hear Best Buy is hiring.

M&I - Brian

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

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    Joe Joseph

    Hey,for being an analyst which undergraduate degree is most preferred by IB companies?

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