Can someone explain the Investment Banking hierarchy?
I get that it goes like this
Analyst
Associate
VP
SVP (or executive director)
Managing Director
However, what is after Managing Director? Is there a managing director for each 'division'?
This image is supposed to be of Goldman Sachs new structure. Does that mean there is one MD for Debt Writing, one for Equity Writing, one for ICBC, one for Management Fees, etc etc. And that all those MD's report to the heads of their 'division'? So does that mean that the head MD of equity writing, financial advisory, underwriting, and debt writing all report to the MD of the entire Investment Banking division?
Also how is it structured for regional areas? For example Goldman Sachs has offices throughout the country and the world.
Id really like to know how it all comes together, from the analyst in SF to the analyst in NYC and who they report to depending on where they are in the bank.
You generally have analysts, associates, VPs, and MDs. Some banks will have a level between VP and MD. Some call it "director", some call it "SVP", some call it something else.
IBs are broken up into industry and products groups. Industry groups specifically cover industries, such as, industrials, oil and gas, TMT, etc., while product groups cover products, such as leveraged finance, M&A, private placements, etc. The interaction between industry and product groups varies by bank (e.g. GS has no M&A group, while MS does).
As an analyst, you will be placed in one group. You answer to your associate, VP, and MD (obviously there are more than just one of each). Associates answer to the VP, VPs answers to MDs, etc. Each group will have one or two MDs as the group head/co-head. All other MDs in this group answer to this/these head/co-heads. The heads/co-heads of the groups usually answer to the head of IB or co-head of IB. After that, it depends on how the bank has their hierarchy laid out.
How regional offices are laid out is firm-dependent. Some regional offices do not execution (i.e. all they do is pitch), some operate independently of the other offices, and some operate somewhere in between. Regional offices can be large (e.g. BB offices in Chicago) or small (e.g. some MM offices outside of NY/Chicago/SF/LA). Some regional offices may exist purely because the MD in that office does not want to leave that city, and he/she brings in enough fees to warrant the office.
Hope that helps
Yes that helps a lot. Okay so regarding the picture I displayed... Underneath Financial Advisory and Underwriting there exists the different industries and the heads of those industries report to the head/ two co-heads of the group like 'Financial Advisory' or Underwriting? And in turn the MD (or two MD's) of Financial Advisory or Underwriting report to the MD of the entire IBD.
The head of the IBD would then report to the CEO?
At GS, the Global co-Heads of the industry groups will report to the Co-Heads of IBD (John Waldron, Richard Gnodde, David Solomon). There is no global head of Financial Advisory or Underwriting. The Co-heads of IBD (who are all on GS' wider Management Committee) effectively "report" to the CEO Blankfein.
Some banks will also have: - Regional industry heads (e.g. Head of TMT Asia-Pacific) who report to the Global Indusry Head (e.g. global head of TMT) - Regional product heads (e.g. Head of M&A, Americas) who report to the global product head (e.g. Head of Global M&A) or the global IBD head - Industry product heads (e.g. head of TMT M&A, head of Natural Resources Leveraged Finance) - Regional IBD heads (e.g. Head of Investment Banking, EMEA) who report to the Global head of IBD - Country IBD heads (e.g. Head of Investment Banking, Mexico), who may report to the Regional IBD Head (e.g. head of IBD, Americas) or the Global head of IBD
Honestly, half of these titles are designed to stroke MD egos. A "global" head of a "group" can sometimes oversee like 5 people
while on the topic of hierarchy..... what is the hierarchy of jobs within finance as far as pay/ prestige etc
IB...S&T...Asset Management...Ops etc
Some debate about this and how they might be sub-tiered, but it goes something like this:
Tier 1: Private equity, hedge funds, venture capital Tier 2: Investment banking Tier 3: Equity research, Sales & Trading Tier 4: Asset Management, Private wealth management (more tier 4b) Tier 5: Financial advising, accounting, etc.
Some might say IB is more tier 1b, asset management more tier 3b (i.e., not quite up to ER or S&T, but more prestigious than PWM), venture capital closer to 1b, etc.
Thanks...and where does operations fall on that tier system? Below 5?
Wait in what universe is AM below sell-side equity research or banking?? I think you should probably talk to some more people... At least at the mba level, banking and ER jobs are materially easier to get than buy-side roles a decent firms. Large funds will hire 1-3 people a year, nationally, across the top five or six programs. How many IB associates to the BBs take? 20? 50?
I don't know, maybe at the undergrad level these things are different, although it would surprise me...
some firms have a pool of bonus allocated to senior MDs. They are essential the equivalent of GS partners but just do not have a clear title distinction
just as I was bitching about too many threads about tech, a preftige ranking appears. thank you WSO, you never disappoint.
OP, fuck prestige conversations. do whatever interests you. yes, this may mean getting a job in some "lower tier" job first, but it's worth it. most of the kids that talk about "tiers" of finance aren't even in the workforce yet and have some ill-conceived notion that happy hours with bankers are just a bunch of guys in ties pulling out their dicks and business cards (a la american psycho), pretending they're holier than thou. that is a small segment of people in finance, but for the most part no one gives a fuck.
while we're on the subject, can someone define prestige? I realize that within IB, PE, etc., there are firms that are harder to break into, so if that's your definition of "prestige," as in "I made it into GS, therefore I'm better than you," then just say it like this and be done with it: "I'm a dick."
as long as I've been in the industry (not terribly long but longer than most of the virgin army), I've never heard this term outside WSO, so as far as I can tell, prestige is defined as:
an aspect of one's job measuring the time between mentioning his employer, and a FBE. E.g. "I work at Goldman Sboing" versus "I'm an intern and Northwestern Mutual ..."
an aspect of a job whose power is its ability to shut up tiger parents at the dinner table
/rant
See this is why you can never satisfy the world when it comes to rankings. Out of undergraduate, based on pay, difficulty to get into (based on general applicant quality), and exit opps/job opportunities moving forward, what I wrote is pretty accurate, although obvious exceptions apply (which I already alluded to). Depends on individual preference, job responsibilities, job title, company/firm, etc. Common sense very much applies in such cases.
Of course, somebody along the way is going to read it, will be working in a profession that is ranked on a lower tier (like an investment advisor), will be offended by it accordingly, and throw around the MS accordingly to "take revenge" on that particular poster for indirectly insulting what he happens to do in life.
It's like saying Goldman Sachs and Morgan Stanley are the top two bulge brackets and a guy at UBS getting pissed and down voting it. Or a guy on ESPN looking at a power rankings article, and raising a shit fit because he thinks his team isn't ranked high enough. Or Harvard, Yale, Princeton being ranked the top three schools in the U.S. and pissing off all the people from Stanford, MIT, top liberal arts college, etc. It never fails.
Sorry, I meant to shit on the prestige conversation, not get your undies in a bundle, let me go back to my tier 6 prole job and thank my lucky stars that patrick let me in with you higher tiers folks. Please forgive me!
very simple: there are the BSD's who run the show and there is everyone else.
I agree with this...a dude who is the head honcho of some support division at a large firm and has 1000 people under him is more baller than some 24-year old at a 50mn hedge fund sitting in a dusty cubicle punching numbers into excel files
Clearly not- did you not see the detailed breakdown given above? That dude may be high up on tier 5 but can't compete with lower level tier 1, especially if the excel file is a sweet model that he is going to screw up and give to those above him to fix.
It's hilarious to me that you think non-PMs in AM aren't clearing more than $150-200, but ok.
If you have the time, give me a rundown of the AM hierarchy and what you think each position/title makes on average, and what kind of exit opps they set themselves up for.
Hahahaha.... it's amazing how this post about org. structure somehow got sidetracked by some kids with no jobs ripping on people with jobs. WSO never disappoints!
SF_G you should probably try and avoid making yourself out to be an arrogant fool before you get your offer bud!
Hate to bump this. But thought it might be better than asking a new question.
Can someone tell me where 'Partners' are in the IB hierarchy? Goldman has a bunch of Partners and they are the only firm I hear mostly associated with the title of partners. What are partners? Are they essentially MD's of different industries and or product groups?
I have read that before IB were allowed to go public the Partners of the bank were the owners but now that IB like Goldman are public, what does the title of partner mean?
great info here
Goldman has a two-tiered MD structure: - Managing Director (MD), followed by - Partner Managing Director (PMD)
PMDs are an exclusive group of MDs at Goldman (across all divisions) who are basically GS' top rainmakers, franchise heads, and relationship managers. Partner classes are voted in every 2 years and it is a highly coveted title on the street (some would say it's arguablely one of the highest titles you can obtain on Wall Street). PMDs also share in a special partner bonus pool (many of these people can easily hit mid 7-figure annual salaries...some even 8, or 9 figures).
Think Jessica Pearson and Harvey Specter.
IBD Hierarchy (Originally Posted: 06/14/2012)
IBD analyst programs last for 2-3 years, but how long does it typically take to become VP, MD, etc.? 4 years as Associate, 4 years as VP?
http://www.wallstreetoasis.com/forums/youngest-md
Analyst 2-3 years Associate 3-4 years VP 3-4 years Director 3-4 years MD
-posted by hs student
There's more variability at the senior levels (VP and above), as it depends on how much revenue they bring in and headcount. For the lower levels, it's pretty structured (three year analyst program, four year associate program).
Hierarchy in Banking, Finance; One individual is MORE IMPORTANT than another. (Originally Posted: 04/10/2015)
So there is hierarchy in finance. Revenue-generating guys are "more important" than guys in IT and the incentive is structured accordingly.
Recently there was an incident where a graduate who was hired to perform certain tasks talked back to a senior member arguing that "he has the right not to be treated this way." Now this is a political correctness with a double edged-sword and you really want to refrain from using this expression "I have THE RIGHT!" unless you are desperate, really desperate.
ASK YOURSELF, "What else do I have apart from "my rights"?" Do you really want to use your last card so casually?
The thing is you can either do this voluntarily or you will learn this in the hardest way possible. Everyone should treat each other with reasonable nice-ness and respect (again don't overdo this), but the harsh reality is that some people are hired to do certain job descriptions and as long as they are done, thats fine. "He" or "she" doesn't have to do it. "They" can do it. Even a portfolio manager's position at some fund is easily replaceable.
However, there are jobs that are attached to a specific individual, movers and shakers. Even a client relationship manager, there are bad ones. Bad ones should go before we lose any of our existing clients. Buy-side clients can tell you stories of "bad relationship management." Good ones don't use "no," if a client asks something, even if thats something that's not a standard request, they will do their best "not to say no."
At an organization, everyone has a role to play. An organization needs money, needs clients. An organization exhaustively identifies their revenue sources and any risks associated with each revenue source. Those who are involved in revenue-generating are naturally more important than workmen and work-women who execute a set of job descriptions.
You probably know what has happened to the graduate.
I have previously resisting working on some tasks citing "it's not my job". Boy am I grateful to realize my mistake and keep the job!
I would def say "yes" to any tasks that comes my way. But I do get to have a say regarding the timelines and usually it's a win-win.
Lol wow just in time. Imagine if a summer analyst told a MD that he has a "right" not to pick up lunch/coffee/dry cleaning for the whole desk.....
I have no problem picking up food for people, It's a paid break and normally they would buy me lunch. No complaints here.
this is near and dear to my heart. revenue generation is what keeps analysts employed, and something that WSO forgets all too often.
I will disagree on one thing, that people who are client facing are yes men. it may be different in banking, but elsewhere in the world, the way you get to a scalable, repeatable process is not by having gaggles of one-offs in your clientele.
I think there is a degree of truth in this for all industries but it is on a sliding scale. If you are selling financial advice to dentists with $5mm then yes it is 100% a sales business and being a Yes-man leads to revenue. If you are an investment banker, money ultimately comes from the MDs who have the relationships to bring in business. There are some execution issues but at the end of the day it comes down to having guys like Blair Effron or Simon Robey who have a huge rolodex and are trusted/respected.
At the opposite end of the spectrum there are hedge funds that have locked up capital, lots of internal capital, and could raise money without any effort or sales people. Analysts at places like these keep their jobs on performance and get rich on incentive fees.
You're right. PM's are easily replaceable and losing one won't hurt the business. Ask PIMCO.
You can't be a total yes man in any business because you just won't be able to deliver on some of those promises. If that's valuation or getting perks for clients, investors, or whomever gets you paid. If you say yes to a valuation of $200 and there's no way it should crack $150 you're going to blow the deal up at the end, the client probably won't return and you'll hurt your rep (for example, look what happened to FB with a $100B valuation-they got it but it really blew up in MS's face). If a client asks for 50 yard line seats to the first game of the season you can swing that, but you can't promise to get them seats in the owners box at next year's Super Bowl.
The first part of the OP about revenue generating positions being more important is true, although someone needs to execute. Bringing in the deals/dollars is tougher and people who do are more handsomely rewarded. But that doesn't mean those guys need to be douche bags to everyone else.
OP raises some great points, but I would argue that the graduate is perhaps a lot happier and better off today, which is really the only thing that matters. At the very least he didn't seem too happy at that firm. Taking another perspective, this is only a cautionary take for someone where this was the ideal place for them to work. Otherwise it's a win-win.
I completely agree there are times that it's best to suck it up and deal with it. Especially those times when you really want to say something. On the other hand, it is a horrible idea to stay in a job that's making you unhappy- especially for something as easily fixable as a culture that doesn't treat people with respect. Especially as a recent college graduate. Don't quit in an ungracious way, don't quit in a way that hurts the business, and don't quit without a new job lined up... but still quit.
Unemployment is 5.5% right now and dropping. The job market is booming. If you're not happy with your job, this is a great time to find a better one. Nobody is indispensable, but high turnover is a great way to kill a business and hurt managers' careers. And with the tech sector booming, I honestly have no idea why a developer in IT for instance would choose to stay at a bank unless he was earning well into six figures (as in a figure starting with more than 1) or at least treated very very nicely.
People don't have to treat you with respect. You also don't have to stay an employee. This is also part of the reason I advocate living in Hoboken and driving a rusty Honda- aside from whether your girlfriend has a fake tan it gives you choices. And sometimes it's worth a 10-20% discount on pay to work with nice people- especially for people who work in our industry and can give up 8-15% of their disposable income without a big deal.
Just leave nicely, leave with another job, leave graciously, leave with no hard feelings, and leave with a smile.
In the long run things do tend to balance out. People who treat others with respect tend to succeed, and people who can suck it up and act like adults on the one day in ten (not every day) people don't treat them with respect tend to succeed too. It takes a long time but karma tends to work out in the long run. And in the meantime it's ok to switch jobs.
Business lesson of the day: If you don't bring value to the business why are you still here?
Hierarchy (Originally Posted: 04/26/2008)
I am astounded by the hierarchical nature of IB's. I completely understand that there should be a mutual respect in the workplace and seniors deserve it inparticular because of their knowledge and deal experience etc etc, but why do you need to pussyfoot around MD's and treat them as if they were superhuman even though they have been working alongside you for ages? It reminds me alot of being back at my strict high school...If your MD or VP is in your team, why not just treat them as they were your team mate?
Dude, hierarchies are a good thing.
When you're a resident at a teaching hospital, the attending surgeon isn't your teammate. He's the guy whom you take shit from gladly. Why? cuz he's been balls to the wall to get to where he is. He's bad ass.
I personally wouldn't want my boss to be my teammate. I want a rainmaker who'll be tough as nails and put me through the ringer. Business is hella tough bro, to be good you have learn toughness . . . for that hierarchies are the right platform IMO.
http://www.paulgraham.com/boss.html
That's the way it is. MDs suck up to clients. Within the group, they want to be the big bad banker and it's your turn to massage his ego and suck up to him.
Finance Division at a BB (Comp, Hierarchy, Hours) (Originally Posted: 05/01/2015)
sssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssss
This is very vague question.
To answer your question, you can be in as early as 7am to as late as 12am depending on the group.
Hours are definitely better, pay less to front office bankers obv, but still be better than eqv in other sectors. if you want a well paid job but are not prepared to sell your soul, go for it.
I accepted an offer at HSBC for their two year rotational program within finance. Starting was 65k with overtime. Do any of you know how the comp structure is as you advance and how many years it takes to move up?
The Banking Hierarchy? (Originally Posted: 03/08/2010)
I always wondered this but in the analyst banking world of two year programs, which are considered to be the most prestigious - meaning firm / product line.
Goldman Sachs - M&A? - apprently doesn't exist - so GS [insert line] Morgan Stanley - Leveraged Finance?
My guide to banking prestige is pretty much the "damn ... banker" book and my friends in banking - but even they don't come to a unanimous decision. Most of them just say "GS is on top regardless" but I was always told that ECM was considered lower.
I'm sure there's definitely some ambiguity but are there some that are slam dunk - top 10 on Wall street period with the best exit ops?
Just for the record - i'm not interested in banking, but its something I'd like to be informed.
this is gonna end well...
I thought you were in IT consulting.
And are you for reals?
I am - but this is something that the book left incomplete and I'm actually quite curious about. I'd like to at least be educated about different fields even if I don't pursue it.
Does anyone under the age of 22 realize that stupid book was a joke?
Why rank? Just make bank.
It's amazing, i thought banking would be way more hierarchical than consulting where everyone is always comparing MBB and the others.
Book is a satire, not a real life account. Do some searching. Probably every question you want has been answered on this board at one time or another.
that book was written by a consultant making fun of bankers
I know - but everyone I speak with says there's a lot of truth to it. Do you not agree?
GS - M&A? Really now? I hope you're joking.
Kenneth, GS does not have an M&A group.
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