Some technical expressions in financial career
AnalystThe lowest position of all, and what graduates become when they join. In investment banking speak, "analyst" is simply another way of saying ‘trainee.’
What analysts do varies from division to division. In corporate finance, analysts are hardworking number crunchers who put together “pitchbooks” (company and sector research that helps banks win bids), and analyse a company’s financials. In sales, analysts telephone relatively unimportant clients on non-crucial matters. On the trading floor, analysts can’t trade until they’ve passed their regulatory exams and, even then, are heavily constrained until they’ve proven they’re not going to press the wrong button and lose a small fortune.
At most banks you’ll be an analyst for three years. The bank then decides whether or not to renew your contract, and you, in theory at least, can also decide whether to stay on.
Associate
“Associates” are basically analysts who have made the grade, or business school students who joined after studying a Masters in Business Administration (MBA). Associates typically have a team of analysts in their charge, to whom they allocate work.
So what does it take to make the move from analyst to associate? "We would expect an analyst being considered for promotion to go beyond the use of analytical skills, “ explains Calum Forrest, head of recruitment at Goldman Sachs. The bank expects a lot from candidates for associate positions:
* real leadership potential: as an associate you may be expected to manage a small team (although an associate would also receive management support from a VP);
* increasingly sophisticated judgment, specifically the ability to develop a sometimes contrary point of view, and to articulate it persuasively;
* an understanding of client motivation and the commercial backdrop to their work.
* Expect to be an associate for another three years, before moving up to the next rung – VP.
VP/Director
At this level, life starts to become exciting. The title of Vice President (VP) sounds grand, but don’t be deceived: VPs are plentiful at any large investment bank.
As a VP in corporate finance, you’ll manage the day-to-day affairs of the associates and analysts beneath you, and you’re more likely to have frequent contact with clients. If you work in sales, trading or research, you should have your own book of customers, more relaxed trading risk parameters, or your own list of companies to research.
You’ll typically be a VP for three years, but you could be here for much longer, as VP can become a bit of a sticking point. “For the first five years, it is very much year-on-year progression if you perform well,” says John Harker, head HR at Citigroup, “Once you make it to VP, however, further progression is not guaranteed. It depends upon a much greater number of variables than at analyst and associate level. These include working effectively with your peers and supporting the bank’s values.”
VPs who fail to progress at one bank tend to move to another one, where they can join at the next rank up – director or executive directors.
Once you reach Executive Director or Director level the top rungs of the ladder are within your grasp. Executive directors or directors (the titles are used interchangeably) are the right-hand men or women of the real potentates of the investment banking world – the managing directors. In corporate finance, executive directors help managing directors cope with the daily whims of client companies. In sales and trading they have bigger and more important clients to call, or even larger trades to place.
MD+
You’ve made it! Managing directors (MDs) are the upper echelons of the banking hierarchy.
They typically make the most money, have the biggest offices, and command the most respect. MDs are the people who deal directly with clients and originate (bring in) business.
As with any pyramid structure, very few people who started out as analysts will make it this far. At one large US bank, only 6-8% of directors are promoted to managing director each year. At Goldman Sachs, there are little more than 1,000 managing directors for 20,000 employees.
To make MD, Richard Davies, executive director of HR at Morgan Stanley says: “It’s about individual performance, revenue generated, and client service. If you progress smoothly, you can become an MD by the time you’re in your early 30s.”
Exception to the rule
Although this hierarchical structure exists across most divisions in banks, it’s less noticeable in the sales and trading division. Sales people and traders work on their own to make money, so if you’re an exceptionally talented VP on the trading desk, there is every chance you could earn more than an MD…
source: http://students.efinancialcareers.co.uk
posted by Mohammad Reza Farzanegan @ 08:20
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