Juniorization of the industry
Hey everyone,
I've noticed an interesting trend in the industry over the past five years: a significant 'juniorization' of the ranks, especially at bulge bracket banks. Through discussions with clients and colleagues, it's clear that cost pressures may be leading banks to reduce senior hires and fill positions with junior staff instead.
Traditionally, VP and above levels were the main covering analysts, with occasional exceptions for small to mid-cap names. However, I've observed that many associates are now acting as covering analysts. While more experience doesn't necessarily make for a better covering analyst, the expectation is to follow industries and companies closely over time, which is a comparative advantage. It's intriguing to see such a shift towards junior team members in these roles.
For context, our corporate title structure is typically:
- MD
- Director
- VP/Associate Director
- Associate
- Analyst
I'm curious, has anyone else on this forum noticed a similar trend?
Not really… can you give some examples
For obvious reasons, I cannot name individuals. But if you pulled up analyst coverage (ANR) on Bloomberg you can cross reference the covering analyst's name with their LinkedIn profile. For reference, I am the consumer sector covering both US/Europe stocks and I have noticed a substantial portion of junior employees covering in my sector.
I’m in biotech and it doesn’t hold up in my sector.
Do you think that maybe they just haven't updated their linkedin profiles? Not the norm but there are people I know whose linkedins are years out of date and so might not reflect a promotion to VP/covering analyst.
Maybe not the case if you're seeing many instances of this, but could explain some.
I don’t check LinkedIn. I’m on the Buyside now. I know who’s covering what. Also if juniors get a few names under coverage (3-5) they aren’t quality names
Can assure you this is not happening. Also even if a Sr Assoc or VP has lead coverage, it’s on 2-3 names instead of 12-15 names a senior would be
ER is absolutely juniorizing and asking teams to do more with less. In one of the less sexy sectors of TMT that I'm familiar with, there were three II-ranked analysts exiting to IR/PE CFO in the last year and all were replaced with their most senior associate. When I joined, the sector had ~10 lead analysts who were 20 year veterans; 2 are left and the other 8 have all moved on. It's not the sexiest sector, but it's middle of the pack, not the basement.
Coverage expectations have drifted up from 6-8 to 10 names per head in the 6 years I've been around.
Trading, sales and specialist sales are juniorizing too. You see it across the board.
On coverage expectations, are you talking about names per associate on a team of 3 working for an analyst? Even 10 names sounds super low for an analyst to be covering.
yes exactly, 10 names per associate, not per entire team
When I was at bulge bank a few years ago, they were making a push for juniors to cover small cap names as a way to broaden coverage and cover more names with similar resources. Had I stayed, would've gotten my own coverage soon. Also gives them a chance to see if they have senior analyst talent or not. Helps with retention of juniors as well. It's hard to be a junior in this seat knowing that after you've been there a few years, you basically are capped on upside until your boss retires or leaves. Giving them small coverage with opportunity to grow it slowly helps solve that. Have seen some people take senior role when he leaves for this reason.
But isn't part of this natural? Business is under pressure and so if a few of these 20-30 yr. vets retire or move to other pastures, someone has to replace them. Only so many people with that much experience in the industry. Only so many juniors that have the "IT" soft skills to be a good senior analyst on sell-side, why not give them a shot.
But is this how the juniorization is actually happening? I agree that this business model makes a ton of sense. But is this actually what the juniorification of the business is? Or are there other, larger, issues at play? Like could this be true but more of the juniors covering names are covering mid-cap companies and above?
I am not an ER/HF/etc person so I have literally zero insight into who is covering what. Which is why I am asking
I’m at a regional MM bank and there’s virtually no junior coverage, almost every sr covering analyst has been covering the space for 15-20+ years and many (not all) associates are not realistically given a shot at coverage until they are 6-7 years in as an associate, and then it’s only a couple names to begin. Most of the current long tenured senior analysts ironically were given coverage 2-3 years into their careers back in the day.
how is pay at your shop? Probably less pressure to push coverage down at MMs where typically the pay is lower, but that's broad strokes and may not be true where you are
Well below market at the associate level, but HQ in Tampa so it’s partially COL related.
Interviewed at a BB recently and pay was ~40% higher (but NYC/Miami based)
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