Honestly, What are you going to do when AI kills this career forever?
I am an ASO 1, and given the fast developments in the past year and how quickly AI is getting good at our jobs, it seems now obvious that our jobs have an expiration date, potentially much sooner that all of as anticipated.
My hope had always been that by the time AI became capable of fully replacing junior and mid-level bankers, I would have made it to ED or MD, where the focus is more relationship-driven, but now I realize it won't be the case.
Curious to know about the rest, but as for me I have always envisioned myself in a high-paying corporate white collar job (either finance, consulting or business more broadly). I never pictured myself doing plumbing or fixing cars. So when our demise finally comes, I think I will have to face a very profound existential crisis.
"When I was sixteen, I won a great victory. I felt in that moment I would live to be a hundred. Now I know I shall not see thirty"
Awesome username, awesome reference. Surprised that many people have seen that film.
KOH directors cut is GOATED
Are you me
Opening a vape shop
Forget about fixing Chinese EVs… not a real career path. Maybe data centre construction worker
I always liked the sea, so if I possible I will try to pivot to commercial and transport sailing.
what about buying a maritime insurance company
Do you really think what you do all day can be fully replaced?
We're all fucked in a couple years
Weird timeline when AI has already made people on my team redundant yet I go to the grocery store and there a bunch of people standing around doing nothing or at the checkout line that people still use
I think front office banking roles are actually some of the most insulated from AI disruption and junior bankers actually stand to benefit from this technology. Sure analyst/associate classes maybe get slightly smaller due to efficiencies AI tools provide, but this allows junior bankers to spend more time on supporting strategic activity vs. formatting presentations, models, and memos all day (we all know the poor performing analysts who get stuck making teasers, company profiles, and drafting memos; these folks will get phased out). The reality is you still need folks to wield these AI tools and you'll need people who understand how to provide differentiated advice because this will be a commoditized technology every bank has access to. Senior bankers focused on relationship development won't be spending the time to learn these tools and manage the technology to create their own deliverables and manage transaction processes so there will be a need for junior support teams to manage these processes unless somehow the technology evolves beyond what I can see is feasible.
Another important point: AI is still in it's infancy and I can already see "AI fatigue". Now that we've been exposed for a fair amount of time to these tools it's fairly easy to spot content that is too heavily relied upon LLMs. It's an immediate turn off when you can clearly tell no human thought or nuance went into an analysis.
I honestly feel like the analysts / associates now are the ones that are best positioned to benefit.
Old enough that we still know the “old ways” but young enough that we are forced to use the tools because we are still doing the grunt work. My VPs are only a few years older than me but since the nature of their job is just so different they aren’t using AI nearly as much as I am as an associate. So the analysts and associates now are the ones getting more reps using the tools because there’s more opportunities to do so in their day to day.
If AI lets one analyst do the work of three, banks aren’t keeping all three around to focus on strategy, they’re cutting two. And calling front office roles most insulated when the entire job output is docs, models, and pitchbooks? That’s literally what AI is best at. You also can’t say low performers making teasers will get phased out and then argue there’s still a need for junior support teams that’s the same people. I wouldn’t bet my career on things staying roughly the same.
I also wouldn’t change my career aspirations on the hyperbolic doomer statements saying there will be no need for junior bankers and talking about starting bakeries instead. Get good at AI, learn the tools, and keep doing all the normal developmental activities that eventually help you grow into a senior level banker. Analyst and Associate classes are still the main feeder to senior banker roles that are highly valued. Given churn of these classes it’s still a numbers game to see who sticks around. If you dramatically reduce these classes you’re screwing yourself long-term as an institution. These employees are relatively cheap so the trade off doesn’t make sense to slash numbers. I’d be more concerned about economic and regulatory factors that directly effect the demand for advisory and capital raising services.
LLMs can not reliably do any of those things to the same level of a well trained junior
Junior employees are inexpensive bro
holy cope
How about cutting analyst entirely from the pyramid
This seems like massive cope to me. Your entire argument rests on the assumption that AI isn’t going to get that much better. Yet, you even said yourself AI is still in its infancy. In reality, AI is a rapidly advancing technology that is already dramatically better than it was even a few months ago. Its financial modeling and PowerPoint creation capabilities have improved immensely and are only going to get better soon. I have direct knowledge of the financial modeling piece.
Moreover, even if just the bottom-bucket junior bankers get pushed out, that’s still a net reduction in headcount. Not to mention, the people who used to be middle bucket will now be bottom bucket once the bottom bucket gets fired. You say the juniors will begin focusing on higher-level, strategic work, but there obviously isn’t enough room for every junior banker to effectively become a mini-MD overnight. Also, if the costs are irrelevant, why don’t banks hire more junior bankers as it is? Why did MS just layoff 2,500 people across all divisions despite having a record year last year?
I wonder if you are one of those "poor performers" who doesn't know when to use "it's" versus "its"
So let me preface this by saying this could be as simple as me not being a proficient AI user but as someone at the VP level who I feel is pretty good at training analysts I do NOT feel AI is anywhere close to replacing an analyst.
Things I feel AI really helps: reading, synthesizing and writing text. Example: I can upload a credit agreement and it can walk me through terms, etc; or go through Ks or transcripts and pull out key items, albeit with fairly detailed prompting. It’s also good at producing a first draft of written text that I would still go back and clean up.
Things I don’t think AI is good at (caveat my bank blocks Claude and ChatGPT so I may feel differently if I for instance got the Claude excel plug in)
Excel based stuff is very challenging and I 100% still trust capital IQ over AI both for its ease of auditing data and that it’s integrated into excel. Related to where I think AI still falls short to humans: I would feel comfortable giving an analyst a couple of old decks, and update a model based on key things from these prior decks for this new transaction or pitch whereas I feel like by the time I prompted AI to do that it would be waaaay longer and I would still have concerns about data accuracy
Would love to hear other people’s views
also a VP and agreed with you, although our bank is quite limited in our AI toolkit currently.. would be interested to hear maybe a small firm / boutique bankers' POV who has access to better LLMs
Join a revolutionary Luddite group and torch data centers, probably
Won’t have to torch them we don’t have the capital or infrastructure to build them fast enough before model quality screeches to a halt anyway
Retire and focus all my time to become a pro Muay Thai/judo fighter. Live for honor and glory
you actually tried this? I trained in Thailand and the people doing this are no joke.
If I could retire without financial worries + no family obligations? Hell yeah I would
Any ex-PhD students will tell you that it’s probably the time to start a bakery or a bookshop when the time does come… they’ve all dreamed about it at some point. Failing that, livestock or farming is a good bet too, there’s a reason so many c-suite execs do this during their gardening leave periods between jobs
Exactly, PhDs are certainly famous for understanding how the real world functions outside of theory.
I believe there will be a growing gap between junior bankers who can wield AI technology effectively and those stuck doing things the old way
There are physical and cognitive limits that every banker is bound to - typing speed, mouse speed, information fatigue. Using AI can shortcut this massively and I see the banks picking up on Claude pro already gaining an advantage over the laggards
For the most part, we perform at the margins of fatigue and exhaustion - even a 5% benefit is a huge add.
Yes - competition means banks will close the technology gap. But all else being equal, similar to skill using excel shortcuts, your ability to leverage AI to get things done faster is going to be the next skill barrier.
Accordingly, i think clients are going to recognise this and grow increasingly demanding. So I don’t think net net there’s going to be a meaningful reduction in hours - clients will just sweat the bankers harder - and bankers that don’t pick up on the tools will get left behind
Hypothetical scenario - client asks you ahead of their IC to scrape 30 years of transaction comps based on public info in a niche subsegment of the agriculture sector… due in 2 days. Option A: no sleep for 48hrs. Option B: deploy agents to scrape the web and get it done in a day.
to be clear this is not a doomsday scenario about human replacement. But I find it hard to argue against the splitting of juniors into two classes - ones that can use AI to gain multiples of productivity and ones that can’t… and this is not unique to banking, rather the nature of knowledge work in general
good take
The one reservation I have with this take is that I don’t think ai tools are that hard to use. I am an early adopter of ai tools, I spent lots of time using them at work when they first got rolled out. I spend time outside work researching developments and working on personal projects. I see very little additional advantage when is comes to using ai over my co-workers who just started using the tools earlier this year when it became clear it was a requirement and not a choice to use the tools available
Fair point and let’s see how it plays out
Ultimately, excel is not that complex. VBA is not that complex. And yet there can be a lot of variation in individual’s abilities to wield and learn their tools effectively. You got some analysts good at modelling, others good at drafting pages.
I don’t see why the same can’t apply to AI especially as it gets more complex - sequencing agents, prompt personas etc - ultimately comes down to personal willingness to be efficient and good with your tools
No PE funds are gonna cut juniors entirely to save 2-3% of annual revenue (assuming 15 junior IPs for a 10bn fund —> 200m FRE for 350k * 15 = 5.25mm annual junior comp) and make VPs do extra work everyday prompting AI agents to give them the models and decks…
Similarly, no banking groups are gonna cut juniors entirely to save the fees they can get for like 3-5 mid size deals…
After all, if tomorrow (or even some random day like Feb 31st, 2031; yes ik Feb only has 28/29 days), all analysts and associates are fired, after 5 years who’s gonna be the junior VPs? the “senior” associates? The principals? Are you “AI doomsday” believers gonna say mid levels are all gonna get fired too? So we planning to make boomers and millennials talk to AI agents every day? And what about 20 years later when they all retire? Are we saying that the industry will be dead and OAI and Anthropic are gonna advise M&As and IPOs - oh I forgot, some of you are saying that capital markets will be dead and most ppl will be unemployed…then subsistence farming is the way to go
Every firm needs new/recent college grads to be sustainable…more or less
In all seriousness, yes I do think there will be less headcounts (10-50% cut, probability right-skewed) and the skills required to succeed at this job will shift towards AI-prompting and soft skills. But no, no firm is stupid enough to just fire a bunch of juniors after Anthropic releases something that can build LBOs in minutes and turn VP comments in seconds. They have a million other ways…not promoting juniors, slow down or pause lateral hiring, cut campus recruiting headcounts, overwork juniors….firing is the last resort and is one of the worst headcount management practices - you only see that when a company tries to cut costs immediately or someone is doing really bad (in which case they’d be fired without AI being a thing) not when they actually try to improve their efficiency (e.g. Amazon fired a bunch of ppl last year to save money for AI capex)
You don't know my managing partner. Dude would kill his own mother to save 2-3% of revenues in cost (guess who is the beneficiary of those residual economics)?
In my opinion people aren't focusing on how fragmented banking will become now that with AI you can pull data and create presentations/spreadsheets at your fingertips. There will be a lot more shops where you can get experience. Yes your current bank will hire 2/10 people, but those 8 people will go to other places and compete with you.
What was stopping people from pulling this data before?
This is more of a recent development, called AI... not sure if you've read this thread at all
I’m involved in driving the AI tool deployment at our banking, and the opportunity to get more productive is massive, but when I meet with our C-Suite on the topic, no one is talking about reducing headcount. Quite the opposite, we see AI as improving revenue levels and increasing our junior hiring as a result.
D.
Well my firm put AI efficiencies across back-office as well as improved investment decision making as a top 3 priority in its shareholder letter last week…
In the AI era, the senior bankers ( MDs ) and PE partners are gonna have the most fantastic job ever. They will get a huge slice of the AI pie -- think about all the AI data center M/A deals and all the AI-automations & productivity boost in PE portfolio companies -- these MD and Partner is gonna get triple income ! As for their own job -- playing golf with clients and yelling at portfolio company executive -- is gonna be safe from AI automation, because AI don't play golf and AI can't yell at people and that is why their job is gonna be the SAFEST and they are gonna be the most blessed people on earth.
HOWEVER -- the junior bankers and junior PE guys ( junior VP and below ) are gonna be the most screwed people on earth. Their job is the most-easy-to-be-replaced-by-AI, more so than lawyers, doctors, and janitors. This is because their sole existential purpose is being a 24/7 assistant to senior bankers -- unconditional obedient, process-oriented, soul-less, data-driven, responsive at 2am in night -- that is 100% AI's character personified !!!
And don't even talk about juniors filling up pipeline of retired senior partners -- that kind of inheritance are ONLY FOR NEPO kids ! Remember that the retired partners have sons and daughters who have been networking with Mega fund partner ( their Dad ) since the day they were born. And these senior partners ALSO have nieces and nephews and cousins and in-laws who are queueing in a line. How are you gonna compete with them if the only hiring metric is "who is best for inheriting the business", not "who has the most intelligence, process-driven, and data-oriented ?"
My prediction is that the percentage of Nepo kids in banking are gonna grow by 500% in future 5 years. In the past, only 15% of incoming class are nepo kids, because many nepo kids are bad at doing grunt work -- some of them are too arrogant to do a 2am slide fix; some of them can't get basic numbers right; some of them are just too dumb to get the work done. But after armed with the autonomous AI -- everyone, including the dumb nepo kids, can produce flawless number crunching, you can't tell the difference between a Stanford GPA 4.0 summa cum laude ( who probably used AI to cheat into GPA 4.0 ) vs a dumb nepo kid who can't spell the company name correctly -- they are both using the same AI model and producing the same flawless work.
So the nepo kids now have an absolute edge -- AI could replace a Stanford summa cum laude undergrad in near future, but AI can never in a million years replace the connection between daddy and son, and that is why the nepo kid will win over all entry-level spots in banking, and don't even dream that they'll leave a blank spot for the non-nepo outsiders , because even nepo kids are anxiously waiting in a long queue -- the available junior banking spots will not be enough for all Nepo kids to get.
For those who are already in banking: you must climb asap, sprinting with all your effort, work very hard to make it to the MD finishing line -- there's still few years of runway left (could even be 10 years if new laws and regulations are put in place to slow down AI ), after all, the AI training needs time. If you make it past the MD finishing line before the AI clock starts ticking, you will be the most blessed people on earth. You will be insanely wealthy, absolutely safe and the best thing ? you'll decide which nepo kid wins the junior spot while watching everyone fighting in a bloodbath. If you don't make it past finishing line --- then your paycheck will be used to buy your MD's yacht.
For those college students who have not entered banking yet: enter asap ! !! cut down you four-year college degree into 3-year, time is crucial, even one year ahead is higher chance of making it through finishing line. You may be able to make it to senior VP when associate cull comes; and then make it to MD when VP culls come.
For those kids who are still in high school -- if you are strongly-connected nepo kid, then go get banking ! It will be a cake walk for you. If you are not a nepo kid, don't even consider banking and Im not joking. Go being an athlete or a singer -- these are the only high paying jobs that are safe from AI. Especially singer -- AI cannot generate songs and melodies in proper way and this area is also very under-studied
You could say this is fear-provoking but to fear is better than to drown in sugarcoat
How did you even make it into the industry being this limited?
Seriously, when do you think this happens? AI is stupid, highly unprofitable, super expensive to scale with minimal improvements. It might be a helping hand for things like languages or quick insights, but where do you see it replace a human completely anytime soon?
The only people believing this and making these stories up are tech CEOs and AI doomers.
I suspect these posts could be ads
This whole nepo thing sounds stupid as fuck - you don’t think corp dev and PE teams could just pick up AI themselves? Why pay $10m for fees if you can do it yourself? Just to line the pockets of your golf buddy?
AI will make everything harder - ICs get more intense, auctions get more competitive, capital markets more efficient. It is more likely IB dies out entirely or fees get unrecognisably compressed if no one values the “advice” that banks provide
Because the things clients actually pay the fees for can’t be replaced by AI - relationships with buyers / targets
how much are you willing to pay for just a guy to connect you with another guy
This also really only describes 10% of MDs - most work extremely hard and have to deliver real value real content real execution… all of which AI can disintermediate in the real doomsday scenario
Can you imagine some nepo md showing up to a pitch with 100 pages of ai garbage hoping to win the pitch because he’s good at golf??
Perhaps our time would be better spent trying to figure out how we can maximize our leverage of AI to do our jobs better and more efficiently.
There will always be a need for professionals within this industry, just fewer of them. So, how can we make sure that we're one of the ones who survive?
This post is either an AD or OP is not actually in banking. The traditional/conservative culture coupled with OCD-level attention to detail + someone always need to sign off on materials will always require cogs in the wheel.
Ask yourself - with the boom of AI for the past few years, are you actually working less? Has the industry’s woking hours decreased at all? I don’t think so
100% AI advances will require more analysts not less.
It’s a negligible expense and AI isn’t going to carry my pitchbooks for me
MDs need somebody to yell at and to be the recipient of hurled staplers
Analysts are safe
I will become a prostitute.
Instead of fucking staffers, I'll just fuck clients.
Honestly better given more visibility to my pay.
Senior guy at a small local boutique. With AI we are already seeing the ability to replace 25% of the analysts, namely the bad ones. We had a bunch of workflows that would take us a long time to do that AI can easily do that is 90% accurate and in a fraction of the time. We have had low quality analysts which may be a byproduct of the pedigree of firm we are, so it really does not make sense to hire more.
My sense is that the bottom 50% of analysts are probably screwed, but the top 50% will be fine and sadly be required to deliver twice as much. The most successful analysts in the next generation compared to the past 10 years will be ones that are able to augment themselves with AI with these process automation tools such as custom GPTs or Claude Skills.
How cooked is it for SA 2027? As in people who will start FT in 2028
bump
You guys are fine. Lawyers will disappear first before IBs do, which still hasn’t happened despite all the doom mongering stuff. I would worry more about microeconomic headwinds + increased competition (which always has happened; I recruited during COVID crash and was not fun)
Lawyers are not going away and I think will be less vulnerable than most IB. Ultimately law (thinking corporate biglaw) has a human touch, licensure requirements (with 3 yr law school moat) and liability bearing judgement. IB people are producing bullshit nonsense in PowerPoint/Excel (which AI can do) until the VP level.
People are saying this about every job. Keep listening to the fearmongering and you will think there will be no jobs within a year...
Gonna become a podcast bro.
No reason for me to “cope”, I’m well beyond my analyst years in a revenue generating role. My argument was never about whether headcount gets reduced, although there could be some minor impact, the original argument of this thread is that “all” roles are going away, my argument is this simply isn’t true. MS layoffs equate to 3% of total headcount largely performance based so it’s a weak straw man to use that all junior banker roles will be disappearing.
I’m heavily involved in analyst program recruitment efforts and our class sizes are larger than years past. Many banks over hired during covid deal wave and some have been late to right size. Still a relationship driven business and you need a pipeline of junior folks, if your key differentiator is that you’re the savviest financial model monkey you were never gonna make it anyways.
No doubt AI will change this industry long-term my argument is that it’s still a great starting point for a career path and you shouldn’t be afraid to pursue front office analyst roles. If I could bet on it demand for financial services will only increase and we’ll see relatively stable headcount levels for junior roles for the foreseeable future.
Nepo comment is on point. I would work on trying to have more important parents or being born better. Important to focus on what matters
I think its only a matter of time when reg frameworks start catching up. M&A market will be crowded with the same templates and analysis where new ways of evaluating, selling, and investing in businesses will emerge. DD becomes very granular since you can cover a significant amount of ground during exclusivity, but ultimately the final bid decisions always become emotional/ego-driven which AI can't penetrate. Someone will always need some kind of mitigator to finalize (i.e. used car salesman).
On the buyside, AI-driven corp dev teams and PEs will get flooded with millions of the same CIM structures and models and just task their AI to filter "the best" CIMs and models. What happens to all the struggling businesses that can't get past that wall? And how do investors weed out savvy fraudsters trying to sell their businesses without stamp of "Bank XYZ backed by FINRA/SIPC"?
Now imagine you're an LP with capital to invest. Why would you even bother with PE firms if you can sort of run your own portfolio as easy as trading baseball cards and just get pinged performance dashboards?
Does the money then flood all back to AI companies running different tiers of subscriptions to a select few of very wealthy individuals willing to buy that product?
People that say AI will never replace humans are coping in my opinion.
Do you think fees will stay the same when the two acquiring parties realize they can sit down in the room in one day and come out with a full model and multiple both are happy with?
IB's revenue stems from being value accretive, and a lot of the value was grunt work and tactical modelling. AI essentially erodes all of this away.
Literally the grunt work and financial modeling are useless. Those are things we give away for free
Fair, what's actually useful though then?
"Dealmaking" ?
Del
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