Why has the quality of IB analysts declined?

Corporate America sucks ass. You got that right. So much meaningless bullshit and busy work that amounts to nothing. Self congratulatory attitudes and posturing all over the place with “hustle culture”. I don’t blame gen z’ers at all for not giving a fuck - I don’t either. Realistically, none of this shit matters, and only a tiny percentage of people will ever reap any legitimate reward for their hard work.

I think the more surprising reality would be if the quality of analysts didn't go down. It's been discussed to death but there's a million reasons why the perceived quality might be on a downward trend, and very few reasons to counterract the trend.

1. Proliferation of information via places like WSO has made the exit opportunity process much smoother/better informed. In general this proliferation of information outside of one's immediate bank bubble has diminished any sense of immediacy/authenticity in the overarching threat behind getting one's work done quickly & well. Can you even imagine how small a banker's world must have seemed in the 2000's when you spend literally all day in the office, with little connectivity? Junior bankers just don't buy into the whole fear-based structure that has long ran a bank's hierarchy to the same degree these days.

2. Banks have increased the number of junior bankers quite a bit as the corp-fin side of investment banking has grown. It's not difficult to see how this may have had an effect on junior banker quality, coupled with increasingly well-paying jobs in tech, quant, consulting, etc.

3. The overall culture of finance has changed rapidly since 08. Finance used to thrive on a mystical allure of secrets behind the scene, and the junior bankers were the SWAT team low on the hierarchy that took great pride in being allowed to participate in this world that "commoners" only knew as Wall Street. Well, now most of these banks have grown massively, gone public, have little fun (especially of a risque nature), don't pay 3x better than non-finance opportunities, and have done away with the culture of secretiveness they long tried to give off. Junior bankers have responded in turn by easing up a bit culturally - being a hardo is an insult now, not something to take pride in. They don't feel proud of the opportunity and eager to prove themselves, they feel like chumps as their stoner college friends work 30 hours (virtually) in tech making just as much if not more money.

4. As alluded to above, models and bottles have gone away. Youth culture as a whole is way more into investing these days and frugality is sexy. This makes having a nest egg and a general sense of financial security far more common, again, doing away with the power of the implicit threat of perform at a high high level or be fired.

The list goes on. And the recurring theme through these is that it really isn't junior bankers' faults. It's simply a natural and obvious conclusion to a lot of trends.

As well, honestly, the quality of associates has probably gone down by just as much if not way more lmao. It used to be considered an honor to go A2A at a bank, and a lot of the time that was accompanied with an MBA. Now you have people that worked low-level corporate jobs, did nothing in b-school for 2 years, and now complain about the quality of analysts...

Counterpoint: there’s a lot of shit VPs and shit ASOs out there that lead to shit deliverables.

This is actually why I wanted to pursue a double major in MIS and Finance because I sensed this issue when I first started college and how the IB space is no longer what it was in the early 2000's or what have you. Amazing points OP, I don't necessarily "hate" the current state of IB but its definitely not as glamorous as some may think it is haha, cheers.

Minor factor (of many others) and somewhat just conjecture - but people’s brains and ability to focus have degraded to unprecedented levels by smartphones and social media imo. It’s only been a decade or so now since smartphones have become ubiquitous and I think they (+social media apps) have only gotten more and more addictive over that time. I think the impact is more pronounced on young people (now today’s analysts) who have had smartphones since middle school and I think there’s something to be said for that. Additionally, I think Wfh during covid allowed people to goof off on their phones significantly more. This combined with greater apathy by how weird/fake/pessimistic the world seems after the last 2 years are two potential causes I see that are resulting in lazier, less diligent analysts.

Agree with what's been said above. 

As someone at one of these BBs that just paid out laughable bonuses, can clearly see that analysts have blatantly just stopped caring.

Good amount of my class is just doing enough not to get fired at this point...why the hell would we average 90 hours for another 52 weeks just for another 19k post-tax bonus??

We all know the reason😏

About to wrap up my BB IB summer internship and I can confidently say I will not be going back and I'd rather risk finding something else than work 70-90 hours week in and week out. I used to be a person with 5-10 year plans and always worried about what's next. Was able to take some time out and reflect and I really don't see myself doing PE, which is the top reason why people wanna do this job in the first place. After seeing how this industry truly operates, I would rather take my talents somewhere else thats not in this industry and have more flexibility. Some of my peers at different banks are thinking the same thing as well. 

Back as a freshman I admired this job a lot and thought all the smartest and brightest kids are doing this. Oh how wrong I was lmaoo.

I would actually say the top 25% of analysts are better than they ever have been. Some real stars in this group, and people more informed and capable than I’ve seen in the past.

i don’t think this is generational. I just think banks have overhired for the boom and there’s a lot of mediocrity in the bottom 50% (which is worse than ever) and people who really didn’t want to do this. 

there’s also a lot of Associates, VPs, D (and I dare say MDs) who don’t have the substance and we’re cruising along because of the boom.

In my view non MD headcount will be down 30-40% and analyst classes will be halved or more in 18 months and much of the mediocrity will be gone.

I think these problems are less prevalent at non-public banks. By virtue of being publicly owned, comp is under much greater scrutiny at the BBs/public boutiques and it’s much easier to rationalize paying people less or paying them in stock, which objectively just sucks. Also they all have to pretend to be woke and virtue signal out the ass while actually not giving a shit about employees.

Not for nothing, shitting on the generation that comes after you is classic human nature. 

It's like being in a fraternity. Every year the new pledge class is the biggest group of pussies yet. 

Every new Analyst class is the laziest / most entitled group of Analysts yet

New, popular, young musical acts the kids are listening to are dog shit compared to the music our generation used to listen to

The politics and values of the new generation are degenerative 

The shit the kids wear these days is stupid, offensive and tasteless...

So on so forth

I miss the days when this forum would instead shit on MBA IB associates for being the oxygen thieves that they are

I swear these threads are part of a MBA associate conspiracy to deflect hate to interns and analysts

HR.

I think WFH during the pandemic has had a big impact on the last couple classes. During the thick of Covid, our interns were remote and weren't able to really do any real work due to MNPI concerns (Noone to supervise them). Then offer rates were essentially 100% because there was no real work to really judge them on. So weak interns weren't culled as they typically were in the past.

Then when they came back for full time, we were still WFH which made it much harder to train them effectively (not their fault). Due to it being much more difficult to train them, alot of associates/vps opted to just do the work themselves, leading to a bit of animosity towards the new analysts. Now that we are back in the office, i think analyst work product has improved significantly (at least on my team). 

Less money, less prestige, less bitches that’s why.

WFH definitely the biggest culprit in the short run.  It is difficult to be motivated and to learn while remote, and managers also need to get back in the office to create the in-person culture these firms want.  In the longer term, I think a lot of these tech / influencer / entrepreneur gigs are going to be very challenged in a world of nonzero interest rates.  Stock comp is going to be less valuable after this year.  Hiring in tech and creation of new tech will slow.  For the young entrepreneurs, funding your dorm-room startup will be much more difficult than anytime in recent history.  Ad revenue is tanking which harms both tech and influencers.  The talent will shift back to finance within a few years.

1-4 are a cause of 5. Pls fix

With the low bonuses, total IBD compensation is not even at parity with tech compensation (not even factoring in stock) at the junior levels. So what rational person would take 1.5-2X the hours with lower pay? We can talk all day about how finance has a higher ceiling, but even that starts to fade when factoring the extremely high COL compared to remote tech job working in some random beach town. 
It’s not an exaggeration to say that front office roles need to at least double or even triple their base salaries if they want the cream of the crop to start coming in again. People can use every excuse under the sun, but at the end of the day this is purely a compensation issue. Smart people will gravitate toward what provides the highest pay.

Generally speaking wage suppression has only been getting worse in Corporate America and it’s no longer like the good old days where employers paid pensions and promoted those who were loyal to the firm. Corporatism came in and saw everyone as a cog in a machine. If you do that and don’t adequately reward talent, expect smart people to create their own firms or go to the startups that do.

I think covid is a huuuge reason, for various reasons including:

- College became an absolute joke during covid - virtual school simply does not work for most. I'd imagine the ability to simply cheat on everything would have a profound impact on one's motivation to study/work hard (i mean why would you waste your time studying if you can just like look everything up online lol) and I think some of this translated to interns and new analysts' work lives. You just don't really ever feel that sense of urgency I think (which in my experience, I felt like a lot of interns no longer had when comparing myself + my friends' interning experiences to interns I've had) 

- WFH is fine / can be effective when you know what you're doing, but starting out or interning remote is a literal disaster. Sure facetime culture is stupid/unnecessary but there is value to being in the office around your peers, especially when you're trying to figure out simply what's going on and communicate with others.

- Probably most important and big picture, but I think covid simply changed people's worldviews and outlooks on life (in a multitude of different ways). For instance, I'd say covid led to a seemingly mass exodus from banking in general in like ~2021 (probably bc people re-evaluated their priorities / thought life is too short to spend my time up all night working on slides that no one will even look at, no matter how much you pay me). Then this mass exodus led to a crazy ib job market (where a lot of new hires seemed to be from non target backgrounds/school), and honestly in my experience, a lot of these off cycle hires just sucked (which isn't surprising bc wfh/remote working doesn't work when you're starting out, like I've alluded to before). But overall I think covid caused people to re-shift their priorities and either re consider ib as a career or just approach it differently. 

- also edited to add something else i thought of that isn't necessarily new to banking but there's just a huge misalignment between incentives between senior and junior bankers. MDs are trying to win deals and directors/vps/maybe some associates but less so are hustling to try to make MD (so form relationships, win deals too, etc). as an analyst, like yeah deal toys and deal experience is cool but at what cost? there'd be bake offs where i was like uhhh i know my senior banker needs to win this deal, but i don't want my workload to get even worse and i don't really truly care about this soooo... glad we lost lol 

Its gotta be directly related to WFH - not just the analysts. 

So many juniors WFH that analyst development has really slowed due to the lack of facetime from both them and their mentors. I blame leadership. Its like having a workout trainer training you from Skype...smh i cant learn how to bust out squats like this 

UVA. Guy even did a “fall analyst” internship with a solid boutique. But was always too busy with “other deals” to do anything on our deal. Recognize he’s an anomaly and most UVA undergrads are probably solid

I'm not surprised. Why would any Ivy league grad do investment banking when they can work 45 hours a week at a tech startup and get paid 200k out of school? Yes, that 200k are high-percentile roles, but I-banking itself is a high-percentile role - smart, motivated people can and will obtain those jobs.

Good for them. Kids these days are smarter than slaving away at a meaningless bullshit job, at a meaningless bullshit firm, in a meaningless bullshit industry, to earn pennies while they make some sleazy old white guy rich.

Probably because the best talent from top schools are going straight into PE/HF/MBB/Tech/etc...

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Quality has dropped bc they are hiring Ivy/Oxbridge grads who major in fucking history or better yet medieval languages (yes someone landed GS by taking medieval languages at Cambridge).

Most new hires are kids who do arts degrees and don’t understand how basic accounting concepts work or what a fucking interest rate is.

If banks hired the top finance students from non/semi-targets this probably wouldn’t be a problem.