What do analysts, associates, VPs, and MDs actually do in investment banks?
It’s easy to be impressed with big or grandiose titles.
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American Psycho is a great example of this title inflation. Patrick Bateman slides his card across the table – Vice President. “Jheez,” you mutter to yourself. “Must be a bigshot”. You might have noticed by the end of the scene that all of the cards have the exact same title.
That’s because Vice Presidents (VPs) are a dime a dozen in an investment bank. Goldman Sachs has roughly 10,000 of them by our count, out of a total headcount of around 44,000 at the bank. It has a similar number of analysts and associates, too.
Why so many VPs, then? There are a variety of reasons that are hard to pin down. For one, investment banking is a very transient industry for most individuals – people come and go quite quickly, and part of a bank’s incentivization scheme is (slightly exaggerated) seniority.
It’s also at VP level that bankers begin to meet clients more regularly, and their opinions actually start to matter. And because clients prefer talking to people that have at a bare minimum the semblance of seniority and authority, banks give VPs a title worthy of some respect.
Regardless, VPs are not the top of any bank’s pyramid. Below them are analysts and associates; above them are a variety of titles such as senior vice president, director, executive director, and the highest “regular” title in the banking world – the highly coveted “Managing Director” (MD) title.
What do they all do? Let’s find out.
Analysts
What is an investment banking analyst?
Analysts are at the bottom of the investment banking ladder. Colloquially known as “monkeys”, analysts fulfill a variety of functions depending on what exact department of a bank they are in.
In the investment banking division (M&A and capital markets), analysts have a number of responsibilities. They research companies involved in a deal and build financial models to value them. They then put together pitchbooks – PowerPoint presentations for their bosses (the MDs) to present to their clients.
"Junior bankers are experts on financial modelling," said ex-Goldman banker-turned-academic Alexandra Michel. They are also experts in Excel, VBA, and in PowerPoint, to build the presentations that banks use to communicate their ideas to clients. "The more junior you are in M&A, the more time you will spend working on Excel models and PowerPoint Presentations," another ex-Goldman analyst said.
A current analyst at a European bank said that, quite simply, analysts usually just do whatever it is they’re told to do. "The analyst is the person who does all the administration work necessary in the deal process. As the most junior person, you might work on research, you might create the materials for the pitch-book which presents banks' ideas to clients, and you might work on the financial models - but what you do will be quite basic."
Some analysts complain that their work is very boring and repetitive. “As an analyst, you spend 75% of your time on PowerPoint, making presentations,” one said.
Former JPMorgan associate Maninder Sachdeva said that, when he was an analyst, in the course of one day he worked on "maybe 10 different Excel files and maybe four or five different presentations" for clients. Analysts are notorious for getting "Please Fix" requests - after putting the presentations together, they'll often be asked to make corrections by the bankers above them in the hierarchy. These requests can come through at all hours of the day – or night.
During a dearth of deals as occurred in 2023, analysts spend a lot of time on these 'pitches,' but not much actual time working on the process ('executing') the deals that result. Even in busy times, though, analysts are more focused on pitching than execution.
How long will I be an analyst for?
Historically, you were an analyst for three years. The standard is two years now.
How much do investment banking analysts earn?
A decent chunk of change. A report from Pearse Partners found that investment banking analysts in London earned between £60k and £110k in salary, depending on seniority and the bank in question, with most around the £70k to £80k mark. There was an additional 50% or so in bonuses up for grabs, bringing total compensation to anywhere from £100k to £135k ($127k to $171k, respectively).
In America, pay was between $105k and $150k in salary for Wall Street analysts, with another 20% to 75% available as a bonus on top of that, implying a total compensation range up to $263k.
How many hours do you work as an investment banking analyst?
A lot. Morgan Stanley analyst Florian Koelliker studied junior bankers for his 2021 dissertation and found that both analysts and associates typically work between 80 and 90 hours a week. One analyst told Koelliker that leaving at 2am is "ok" and that leaving at 4am is "late."
If that seems like a lot to you, it is. And it used to be worse. A scandalous presentation was leaked by some disgruntled Goldman Sachs juniors who complained about working 120-hour weeks. Yes, you read that right.
Why so many hours? Because an analyst’s job is to fix things. A presentation or model sent to a senior banker is expected to be fixed – beginning immediately, no matter what the time of day is. That can mean in the morning at 9am, or in the morning at 3am.
"In the day it's quite hard to focus on one task at a time, because you'll have all these inbounds of random requests and tasks, so you never really get to focus on long project work," Mani said. "But in the evenings, when most of your clients and seniors are no longer at their desks, it's kind of nice to be able to work on things at your own speed and own time."
Associates
What is an investment banking associate?
An associate is a step above an analyst, but not much of one. An associate has either graduated from a bank’s analyst program or has joined the bank directly as an MBA graduate, although MBA associates generally have a poor reputation in the teams they’ve joined.
Associates don’t do anything vastly more important than analysts, other than managing them. "As an associate, you're still working on the PowerPoint slides," one M&A analyst said. "You also work more on the [financial] models."
An associate's role is partly to "guide the analyst in preparing the presentation and doing the research," the analyst said. The analyst does the work and the associate checks it. "The associate is still an important part of the process. If you have a 50-page presentation, the analyst will usually do 30-40 pages and the associate will check them and do the rest."
Associates are still expected to do analyst-type work, one former associate said, although she says that "analysts are technically the ‘producers’ of all the work and the associates are the ‘checkers’ of it."
How long will I be an associate for?
Around three years, if you don’t quit or get culled from the herd.
How much do investment banking associates earn?
A lot more than analysts. In London, associates can earn between £100k and £145k depending on seniority and bank, with an average of around £110k to £130k. Bonuses vary but can be around 50% to 100% of salary, taking total compensation anywhere up to £250k ($318k) or so.
In America, however, associates can earn even more than that. Selby Jennings, the recruitment consultant, found that Wall Street associates can earn between $175k and $250k in salary, with bonuses of around 50% to 100% of salary. That takes total compensation anywhere up to $500k, hypothetically.
How many hours do you work as an investment banking associate?
The orthodoxy was always that associates still worked a lot, although less than analysts.
Things changed significantly, however, with the death of Leo Lukenas. Lukenas was a 35-year old MBA graduate and special forces veteran who worked at Bank of America, as part of the Financial Institutions Group (FIG).
The FIG team of an investment bank is known to work particularly long hours, and Lukenas, an associated, is alleged to have worked 120 hours a week before his death, which Bank of America denied. Lukenas was announced to have died of natural causes by the New York Office of the Chief Medical Examiner.
One analyst told us that “you'll often see the associates going home at 11pm instead of midnight. But that kind of depends upon the person and how good the analyst is. If you're a lazy associate with a good analyst, you can leave early. If you're an ambitious associate with a bad analyst, you'll still be working at 2am."
Vice Presidents (VPs)
What is an investment banking vice president (VP)?
VP is the point at which your career in banking starts to get interesting. At this point, you’ll get to meet clients as someone more than just an expensive briefcase transporter. Your opinion will matter.
You’ll also have more responsibility over the analysts and associates below you that are utilizing all the relevant Microsoft Office-derived products. "Being a VP requires more ‘ownership’ in the team - and well-established client relationships," one associate at an international bank said.
"VPs lead the layout of the presentations," said a Goldman banker. "They're responsible for making sure the pitch documents are put together and they will also have an active daily role in executing any deals that go ahead."
A VP’s domain is the day-to-day processes of a deal. "The VPs guide the analysts and associates," the M&A analyst said. “They're the ones saying which materials need to be created. However, they're also the ones who speak on the calls to the clients. They help keep the clients up to date with how things are progressing."
How long will I be a vice president (VP) for?
This is a question without an obvious answer. In theory, another three years, but the ranks above VP are very competitive to get into, and there’s more and new competition every year for those precious few opportunities. Some people reach VP and stay there indefinitely, never quite being as good as each incoming cohort of bankers who peg them to limited director and managing director roles.
How much do investment banking vice presidents (VPs) earn?
London salaries for VPs start at £140k and go all the way up to £200k, depending on seniority and the specific bank you’re working at. With bonuses ranging between around 70% and 100% of salary on top of that, generally speaking, a London-based VP can expect to earn up to £370k ($470k).
On Wall Street, VPs can earn between $250k and $300k in salary, with an additional bonus of between 30% to 150% of that. The implication, therefore, is that a US VP can earn all the way up to $750k.
How many hours do you work as an investment banking vice president (VP)?
Koelliker’s research found that VPs work between 60 and 80 hours each week. "The associate is running the process for the VP, so the VP gets to leave earlier," the analyst said. This doesn't mean they leave early, however. "Our VP goes home around 10pm," he added.
Directors and Managing Directors (MDs)
What is an investment banking director/managing director (MD)?
Your job as a director or MD (especially MD) is to bring in business. There’s a lot of travelling, but it’s not as glamorous as you think – especially with perks being stripped back at many banks. "As a director, you'll speak a lot with the clients," one analyst said. "Your role is to act as the interface between the client and the rest of the team."
MDs are at the top of the investment banking totem pole. "They talk to the clients, meet the clients, bring in the revenues and build the business for the bank," the analyst said. "They're the connectors, the relationship builders, they're out there, finding out what's going on with their clients in their industry."
How long will I be a director/managing director (MD)?
Not every bank has a director title, but if yours does, you’ll hypothetically be one for two years before you join the ranks of the MDs. In reality, for the same reasons as the VPs, you may very well never make MD. Anecdotally, being a director is also the riskiest position to have in a bank: you cost a lot of money and haven’t got a client book to balance it out.
If you’re an MD, you’ll stay there until you get kicked out or choose to retire. There’s a lot of pressure to justify your high pay package, and there’s still a significant degree of oversight from the bank – UBS, for instance, has a 300-meeting-a-year target for all of its MDs.
There are also ranks above MD. Goldman Sachs has its partners. Some boutique banks have senior managing directors (SMDs). There are also various leadership roles, such as sector heads or geographical heads.
How much money do investment banking directors/managing directors (MDs) make?
It’s hard to pin down exact numbers here outside of salaries. MDs earn around $500k. Directors earn $300k to $350k on Wall Street. Bonuses, however, vary wildly. They’re very much tied to how much revenue a banker can generate for their employer – the most performant bankers are known as “rainmakers” for bringing in clients and their spending.
MDs are compensated by a portion of the business they bring in as a bonus. This can easily reach millions of dollars, pounds, or euros.
How many hours do you work as an investment banking director/managing director (MD)?
Directors work a little less than VPs, Koelliker found. He noted that directors work between 45 and 70 hours a week and have much more control over their time. Finally, a glimpse of work-life balance, right? Just wait until you reach MD.
MDs are both constantly – and never really – working. "Sometimes we don't see the MDs in the office much," said an analyst. "Their jobs are a bit more freestyle and flexible. They might be out of the office for a week, meeting clients. They might have lunch with a client, and then a coffee, and then a meal with another client. They might go and meet a COO who's also a personal friend." A bank is happy to let its MDs take time to build client relationships. Goldman Sachs estimates that it takes seven years for a client relationship to generate fees for the firm.
Although banks are hierarchical, they can also be fairly egalitarian. If you perform well, you can progress through the hierarchy (at least to VP level) fairly quickly. In IBD, Michel said, most people actually do get promoted up to the next level. This makes banks less competitive places than people expect. Power differentials are minimized, and everyone (according to Michel) works for a common purpose. Unfortunately, she also concludes that this can lead to overwork and burnout.
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