33. Hierarchy

33. Hierarchy

Investment banks have the ultimate hierarchical structure where employees know the rungs of the ladder they have to climb. If you join as an analyst you can expect 3 years in that role, another 3 years as an associate, a few years as a Vice President (or the equivalent depending on the bank), then another rung before reaching the ultimate sanctuary of Managing Director-hood. This seems like a nice, simple set of steps, but in order to succeed in this game of investment banking you must survive the gauntlet of down markets and layoffs. Oh yeah, and you also must be sure to be halfway-decent at what you do because there’s no room for someone who sucks (unless he or she is an associate)

For analysts, the hierarchy in banking provides some pros and cons. The advantages from this structure include the ability to know the path your life can take if you work hard, and know your potential earnings. The analyst can see that all the crap work he does has a light at the end of the tunnel, even if that light will cause him to look 60 by the time he’s 40 and never have a nice family life. But what’s important is that green light the analyst can see (incase you’re a bit slow, the light is green because green is the color of MONEY). The other positive that comes from the investment banking hierarchy is that it means less pressure on the analyst. Boss, there’s a mistake in the presentation? Oh, I guess the associate should have checked that closer. While every analyst should check his work and take pride in his ability to not need an associate, in those rare slipups, it is nice to be able to shuffle some of that blame off to your richer, older, and “wiser” associate.

The main negative of the investment banking hierarchy is the layers of bosses. Instead of just one boss that I respect and view as knowledgeable, I also have a middle manager (AKA associate) that I don’t always respect and think of as less knowledgeable than myself (associate). As an investment banking analyst I have so many bosses. There are the managing directors and others who have been in banking for many years and can drop knowledge on me at any moment. They also draw up the presentations and know what they want to say in the meetings with clients. Beneath these veterans are the rookies in the game who seem to think they are veterans. First-year associates with no investment banking experience want to show analysts that they are older and wiser (false), while showing the higher ups that they can one day join the upper echelon of the firm. The problem is, I now have to act like the associate is my boss, and so if I am on a call with the associate and a higher up, I have to dumb myself down so that I do not throw my associate “under the bus.” I have been on a call where the higher up got tired of the associate not picking up a simple concept and called me out asking if I understand and can just do it, and I said “yes” because he is my boss in the overall scheme of things. The problem with this is that I work more directly with the associate daily, so he will now take pride in screwing me over and giving me even more useless work all so he can concentrate on reading and being able to appear smarter than me next time. Stupid system.

Overall, I’d say the system is a mess thanks to first-year associates trying to impress at all moments and wield their power, when in reality they do not know the concepts or computer tricks and would be lost without analysts. Overpaid and under worked I say. Pay me the same amount as them and I’d at least earn it.