Let’s remember the typical hierarchy or “ladder”, which in almost all investment banks or Private Equity (PE) firms is the same. From least to greatest responsibility:

  1. Analyst,
  2. Associate,
  3. Associate Director or Vice President, VP,
  4. Senior Vice President, SVP, or Director, and
  5. CEO, CD, or Executive Director, or Managing Director, MD.

Associates are typically people with professional experience, whether they are coming out of MBA or Master Financial programs, or financial analysts who have passed 2-3 years in investment firms and who have risen. Typically, Associates will mature and serve for 3-5 years before being promoted to VP Vice President. Associates are also classified into class years (that is, freshman, sophomore, and junior).

First and foremost, the role of the Associate is to check the work of the Financial Analyst. In reality, however, this control sometimes takes the following form:

  • Analyst: “I’m ending the valuation”
  • Associate: “Okay?”
  • Analyst: “I think so”
  • Associate: “Well, check again and come back when you’re sure everything is correct”

In addition to supervising the Analyst’s work, the Associate often assists in writing the text of the pitches, as well as doing much of the financial modeling work in Excel.

In ongoing transactions, the Associate, while performing a management role with the analyst, is likely to have constant interaction with the client and the opposing investment bank (ie, “buy-side” or buyer or Sell-side or seller), which gives you opportunities to expand your network of contacts and a lot of visibility outside the bank or firm where you are.

Facts: Associates often work very hard in these 3-5 years leading up to promotion to Associate Director or VP within the firm. Another option is to find a similar or better position in another bank or Private Equity or Venture Capital or, even, in a company in other sectors, preferably in the sectors in which transactions have been worked (sometimes, it is the client company itself with the that the one that offers this career change has been worked on).