What banker careers really look like: schools and promotion rates

bankerella's picture
Rank: Neanderthal | 2,151

Hi guys. Answering your questions on career path to start with; also giving some initial generalities about what undergrad schools I'm seeing. The full cut of undergrad/b-school and exit opps data is on the way. Reminder: this is longitudinal career data from a sample set of several hundred bankers in bulge bracket IBD at all levels.

First, just eyeballing it, here are the surprises in terms of undergrad schools:

Yale and Princeton each place more analysts than Harvard. And where the fuck is Stanford? I see almost no Stanford undergrads. Maybe they don't know that IBD exists... or maybe bulge brackets are a turnoff when they've got so much VC around the corner.

Near the head of the pack are Penn/Wharton (no surprise), NYU (small surprise) and Georgetown (slightly odd, but not a huge surprise)

Michigan, Northwestern, Columbia, Dartmouth killing it, no surprises.

Canada also killing it. Yes, I lumped all Canadian schools together specifically in the hopes of being as offensive and US-centric as possible. If you don't like it, go gather your own data and crunch it Canadian-style, eh?

Slight surprise: Vanderbilt, Illinois, Texas, Boston College, UCLA represented more strongly than I would have thought.

Also, random state schools are all very small by themselves, but added together they make up more than 20% of the sample.

And now some data on longitudinal career paths based on where you start:

Career path of an associate starting in BB IBD:

~75% make it to VP in BB.
That 75% breaks down as follows: ~60% make it to VP at the same firm; the remaining ~15% exit to another BB before making VP
That 75% also breaks down as follows: roughly 65% stay IBD, roughly 10% jump to some sort of asset management or similar at the same general comp/prestige level. That 10% is split pretty evenly between same firm and different firm.
Roughly a third of those who make it to VP in BB churn out before director.

~25% make it to VP at a smaller firm or in a role not at the same level of comp/prestige.
Roughly half of these churn out before director.

My takeaway: 75% of IBD associates make it, and the remainder go somewhere else and try to reinvent themselves.

Career path of a VP in BB IBD:

~60% make it to director in BB IBD; nearly all of these do so at the same firm.
That 60% breaks down as follows: a little more than 50% make it to MD while the remaining 10% churn out before MD.

~10% make it to director level at either a smaller IB firm or in some other role, like asset management and consulting. Data's not perfect on how many of them make it to MD because there are too many blanks, but just eyeballing it, it looks like half to me.

~30% don't make it to director level anywhere. Qualitative note: this is by far the most depressing chunk of the whole data set. These poor bastards are too old to relaunch their careers and too young to have made their fuck-you money yet. The stories are not pretty. Percent that open muffin and/or cupcake shops: 0% (in this sample)

My takeaway: 60% of IBD VPs make it. As for the rest, the floor's the limit.

Career path of a director in BB:

~70% make it to MD in BB IBD. Roughly half of these exit the firm and roughly half stay at the same firm.
~10% make it to the MD level in some new function or role. Roughly half of these exit the firm and roughly half stay at the same firm.
~20% churn out (or somehow stay in one place for quite a few years) without making it to MD.

My takeaway: 70% of IBD directors make it. Those who don't still do pretty well.

Career path of an MD in BB:

Looks like roughly a 7.7% churnout rate per year
Average age of those who churn: 48 (WTF? This does not match my experience.)
Average age of those who stay: 45

My takeaway: Stop believing this game ends at 65, regardless of how many 60-year-old MDs you know. You see them because they're still here; you don't see the ones that didn't make the cut. You, personally, are lucky if you make it to 50.

Fun facts:

Total exits in 2008 were 3x the total exits in 2006, and 5x the total exits in 2010.

Those who exited to roles I'd call equal tended to do so either before the financial crisis, or in 2010 and later. Fewer moved from BB to BB in 2007, 2008, and 2009.

Those who churned out tended to do so before or during the crisis. Churnout rates are much lower from 2010 onwards. In some cases, they're even lower than pre-crisis churnout rates.

What the fuck is a churnout?
When someone doesn't make the cut in banking, it's not an instantaneous process. They take a succession of roles (often at progressively smaller or worse firms, or in less "intense" functions) without seeing much (if any) career progression. This process can take years, and in some cases can be reversed. And of course, it's possible that these people actually planned to do this: that their career plan all along was to start in BB IBD and then gradually go to smaller places with less dealflow while never getting any promotions, even though they could have started at the smaller places if that had been their goal. I'm not judging. All I'm saying is, I had to call this kind of exit something, and churnout sounded better than flameout.

Does the VP set include or exclude the associates that made it to VP?
It excludes them. This is longitudinal, so those that entered the data set at VP are treated as a different population from those that entered the data set at associate.

I have a question about how you collected/crunched the data. Feel free to shoot me questions about methodology, but understand that there are some details I can't give. The methodology isn't perfectly random, but you'll have to take my word that it's strong enough to support the conclusions I'm drawing.

To my knowledge this is the first time a data set of this size and quality has ever been put out there, and I'm doing it for two reasons:

First, to give back a little.

Second, and more importantly, to replace the usual WSO conjecture with real data, hopefully saving working professionals some time so we can get back to talking about ass and titties.

Comments (37)

Aug 27, 2012

Yeah , I can attest that IB is not looked upon as favorably at Stanford. I think most of "those kids" who get finance internships freshman year , and then try to weasel their way up the ranks - the kind of people that look awesome on paper and then are almost insufferable to speak to - tend to stay away from California and congregate at Wharton , Princeton and Harvard (I think in that order).
As far as VC goes , I've hardly ever heard of anyone getting into Sequioa or Kleiner Perkins right out of undergrad. I think the main reason for depressed IB hiring is 1) All the Startups that are recruiting in the area and 2) All the quant trading places that also recruit there (at least for Stanford CS).

That being said , its always possible to crash a GSB recruiting event.

Aug 27, 2012
<span class=keyword_link><a href=/company/goldman-sachs rel=nofollow><abbr title=Goldman Sachs&#10;>GS</abbr></a></span>:

Yeah , I can attest that IB is not looked upon as favorably at Stanford. I think most of "those kids" who get finance internships freshman year , and then try to weasel their way up the ranks - the kind of people that look awesome on paper and then are almost insufferable to speak to - tend to stay away from California and congregate at Wharton , Princeton and Harvard (I think in that order).
As far as VC goes , I've hardly ever heard of anyone getting into Sequioa or Kleiner Perkins right out of undergrad. I think the main reason for depressed IB hiring is 1) All the Startups that are recruiting in the area and 2) All the quant trading places that also recruit there (at least for Stanford CS).

That being said , its always possible to crash a GSB recruiting event.

That story may make sense on the surface, but upon closer inspection the truth becomes clear: Stanford kids clearly don't possess the vast intellectual capacity required to spread comps, format documents, and make inconsequential language changes at the last minute.

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Aug 27, 2012
DontMakeMeShortYou:
<span class=keyword_link><a href=/company/goldman-sachs rel=nofollow><abbr title=Goldman Sachs&#10;>GS</abbr></a></span>:

Yeah , I can attest that IB is not looked upon as favorably at Stanford. I think most of "those kids" who get finance internships freshman year , and then try to weasel their way up the ranks - the kind of people that look awesome on paper and then are almost insufferable to speak to - tend to stay away from California and congregate at Wharton , Princeton and Harvard (I think in that order).
As far as VC goes , I've hardly ever heard of anyone getting into Sequioa or Kleiner Perkins right out of undergrad. I think the main reason for depressed IB hiring is 1) All the Startups that are recruiting in the area and 2) All the quant trading places that also recruit there (at least for Stanford CS).

That being said , its always possible to crash a GSB recruiting event.

That story may make sense on the surface, but upon closer inspection the truth becomes clear: Stanford kids clearly don't possess the vast intellectual capacity required to spread comps, format documents, and make inconsequential language changes at the last minute.

and they get spoiled from all that sunlight and arent used to spending 80+ hrs a week in a dark hole

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Aug 27, 2012

OK maybe Im reading this wrong but am i correct to say that 75% of associates make VP and 60% of VPs make MD so therefore 45% of associates end up as MDs? That sounds way way too high to me....so much so that i must be reading it wrong. I have less experience with bankers but for every associate I see come into sales and trading i'd say less then 10% end up as MDs. I must have missed something.

Aug 27, 2012
Bondarb:

OK maybe Im reading this wrong but am i correct to say that 75% of associates make VP and 60% of VPs make MD so therefore 45% of associates end up as MDs? That sounds way way too high to me....so much so that i must be reading it wrong. I have less experience with bankers but for every associate I see come into sales and trading i'd say less then 10% end up as MDs. I must have missed something.

Yep. Did you read this:

Bankerella:

Does the VP set include or exclude the associates that made it to VP?
It excludes them. This is longitudinal, so those that entered the data set at VP are treated as a different population from those that entered the data set at associate.

1: Remember that there's a good bit of flux in mid-career as people start having to eat what they kill. VP is both a common entry point and exit point.
2: They are two completely separate longitudinal populations, with different dates of birth, entry, and so forth.
3: I mention above that 75% of the associate population making it to VP includes those who go to some sort of Asset Management or similar at a similar level of compensation and prestige.

There's no data on how many associates make MD for a very good reason: going from associate to MD requires 10-15 years of promotions, and all of those who entered the data set at associate did so within the past decade. So they generally haven't had enough time to get there yet.

Aug 27, 2012

Cool - thanks for the post

Aug 27, 2012

Damn. Looks like a lot of extra work, THANKS!

Aug 27, 2012
bankerella:

saving working professionals some time so we can get back to talking about ass and titties.

Ok, thanks. Let's get back to it.

Aug 27, 2012

Why would anyone at Stanford try to get into Finance? I obviously don't go to Stanford (definitely wish I did), but aren't they supposed to starting the next big thing in tech or working for Google/Facebook. Can't imagine them doing something lowly like Finance.

And Bankrella, you are awesome! I hated your posts before, but now I respect you a lot. We all can learn a lot from you, and any guy would be lucky to have a woman as smart and sassy as you.

Aug 27, 2012
JamesHetfield:

Why would anyone at Stanford try to get into Finance? I obviously don't go to Stanford (definitely wish I did), but aren't they supposed to starting the next big thing in tech or working for Google/Facebook. Can't imagine them doing something lowly like Finance.

And Bankrella, you are awesome! I hated your posts before, but now I respect you a lot. We all can learn a lot from you, and any guy would be lucky to have a woman as smart and sassy as you.

I agree on Stanford. Finance just doesn't seem to be a focus at the undergrad level.

As for the rest: thanks. But if I were you, I'd brush up on the ol' suck-up skills a little. Gotta slide it in all terse and man-like without overselling; the harder you sell it, the harder it is to buy.

Aug 27, 2012

Where's Cornell?

Aug 27, 2012

sycophant 101: don't use intensifiers...they're very ineffective

Aug 27, 2012

Is that data collected from an aggregate of the BBs or just the the ones employed in NYC. Also about Stanford, those kids have no reason to do Ibanking when they can work for Google. Facebook for 80k+ a year with free everything (food, gym, beer, etc) and work 40-50 hours a week. $$/hr at those tech companies be like 2-3x higher than banking right now and those giant tech companies also carry some "prestige" on the resumes.

Aug 27, 2012
ladubs111:

Is that data collected from an aggregate of the BBs or just the the ones employed in NYC. Also about Stanford, those kids have no reason to do Ibanking when they can work for Google. Facebook for 80k+ a year with free everything (food, gym, beer, etc) and work 40-50 hours a week. $$/hr at those tech companies be like 2-3x higher than banking right now and those giant tech companies also carry some "prestige" on the resumes.

On Stanford: I agree. On the data: long story short, there is some data in the set for pockets of bankers employed in groups and firms outside the general NYC area. I've actually tried to exclude this data where it is identifiable because the sampling bias sucks balls and the resulting data does a crappy job of describing how life actually works.

This data set does an okay job of describing if/how/when bankers transition from NYC to other places and how they do afterwards, and I'm hoping to get around to that. But it doesn't do a good job of describing banker careers that don't pass through NYC.

The pockets themselves might make interesting case studies for people from or in certain regions, but specifics about these pockets (such as their location and size) make them pretty identifiable. So far, I haven't figured out how to communicate that data to you guys in a way I'd be comfortable with. So that's a no-go for now.

Aug 27, 2012

Where's Duke, MIT, Cornell and Brown ? I always thought Duke was a top target for BB IBD.

Aug 27, 2012

Where Berkeley at? Also, I've heard that Stanford kids tend to not take the FT offers from my friends who are there.

Aug 27, 2012

Who goes into IBD at the VP level? What sort of background would that person have? I don't understand this one.

Aug 27, 2012
bortz911:

Who goes into IBD at the VP level? What sort of background would that person have? I don't understand this one.

Those in the data set come mostly from industry/strategy type roles or PE-type gigs. I've also personally seen them come from big law (M&A lawyers) as well.

My general sense is that you make the switch on the strength of your connections and ability to pull clients, and they park you at VP for a little while to see if you pan out. (That's just a personal observation, not from the data.)

Aug 27, 2012

Good work bankerella. Thanks.

Aug 27, 2012

Interesting and great work. Do you have any more info on divisions not strictly IBD? I think the best next step would be to compare this to S&T and see how pronounced the differences between attrition rates and types of graduate degrees (MBA vs MFE) needed.

Aug 27, 2012
solb22:

Interesting and great work. Do you have any more info on divisions not strictly IBD? I think the best next step would be to compare this to S&T and see how pronounced the differences between attrition rates and types of graduate degrees (MBA vs MFE) needed.

Sorry, dude, I don't have anywhere near enough detail on S&T. However, if someone happens to have a data set for S&T and wants to crack this question open, I'll be happy to work with them to make sure the methodologies are sufficiently similar to bear comparison.

Aug 27, 2012

Hey Bankerella, i was wondering if you could describe the how Cornellians and students from UW Madison performed in the dataset.

Thanks!

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Aug 27, 2012

Way too much bold going on

Aug 27, 2012

Is this data for NY only

Aug 28, 2012

SB for increasing my degree's preftige. Totes gunna drop this at the bar tonight. Ass and titties ho!

Aug 28, 2012

Why dont you just list the pure numbers from each school, that way ppl asking about individual schools have all their questions answered at once.

Also, are the wharton rumors about not needing an mba true?

Aug 28, 2012
monyet:

Why dont you just list the pure numbers from each school, that way ppl asking about individual schools have all their questions answered at once.

This

Aug 28, 2012

Georgetown placing so well does not surprise.me in the least, it's where all the prep school kids with connections on the street end up.

Aug 28, 2012

double

Aug 28, 2012
Aug 28, 2012

Some real life data from my analyst class at a top tier BB investment bank (this was 12 years ago). We just had a reunion in NY:

app. 10% are at BB / top boutique firms in NY or London (all at the director level with some up for MD promotion this year; one early promote to MD) in investment banking. Of these, only two are with the same firm that we started with.

app. 10% are at second tier firms

app. 5% are at third tier firms / hung up a shingle and work for themselves

app. 5% are at bulge bracket private equity

app. 5% at shitty MM private equity

app. 5% are at Tier A hedge funds

app. 20% are at second tier hedge funds / asset management firms

app. 10% are in their home countries, running family businesses, investing money, etc,

app. 5% went corporate

the rest have done something completely different (school teacher, policeman, Washington

Aug 28, 2012

Can we get a picture of Bankerella so we can put a face with the pretentious posts. (This is one of the few that was "less than" prententious).

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Aug 28, 2012

Solid post. I agree with some of the rebuttals but overall, this 'study' gives a good perspective of the NYC reality. (especially to foreigners). Thank you!

finance is the science of goal architecture.

Aug 28, 2012
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Aug 29, 2012

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