Lateral offer with title demotion
I’m currently at a true no-name boutique as an Associate. I came in having never done an analyst stint (career switcher, poached from my old company to join this newly formed bank). I’ve been in banking for just over 1.5 years, have 3 closed deals. While my current shop gives a good experience, we definitely service some really shitty clients which I hate. Our success rate is probably 50%. I have just received an offer from a very well-respected MM firm in my area (in a LCOL Midwest city where I would like to stay). There aren’t a lot of options in my area and I’m looking to leave because I want to eventually move to PE and feel my experience isn’t being taken as “true IB” work at my current shop. In fact, I reached the final round with one LMM PE shop in my area that essentially told me as much (dinged me in the last round post-case study because they wanted someone with more “traditional” IB background). I networked to get involved with the As1 process of this MM firm, and had my super day last Wednesday. Today, an MD called me to tell me they want to give me an offer. The only issue is that I would be coming in as an An3, with potential to be promoted to As1 after a year. The MD said that I crushed the whole interview process but that they were looking for someone with 3 years of IB experience. Feels kind of shitty because they knew my experience from the start, put me through the whole associate process just to give me an analyst offer. Of course, the promotion is also not guaranteed. Comp isn’t phenomenal but not horrible either - I would be making roughly the same as I am now. I guess what I’m spinning my wheels about is whether or not this is a trash offer. On the one hand there’s no guarantee of receiving the promotion to As1, but on the other I’m concerned with my career progression if I were to stay at the firm I’m currently at. I’m also worried about what it will look like on my CV going from 1.5 years as an Associate to an Analyst at this new MM shop. Would really appreciate any thoughts on “going down a level” when lateraling and whether or not I’m putting too much weight on what my title will be at this new firm instead of if I’ll be getting quality reps. For what it’s worth, I’m in my late 20s and would be the oldest analyst at this shop (next closest is a year younger than me with the youngest being 4 years my junior).
Based on previous WSO threads, here are some key points to consider when evaluating a lateral offer with a title demotion:
Pros of Accepting the Offer:
Cons of Accepting the Offer:
Additional Considerations:
Conclusion:
Ultimately, the decision should align with your long-term career goals and the value you place on firm reputation and quality of experience over immediate title and compensation.
Sources: Would you take a step down in title & pay for dream job?, It’s Time to Leave My Firm (A1)... How Do I Lateral?, Took an Associate job at a tiny firm, how screwed am I?, No country for old I-bankers (starting a mid-career thread for finance professionals), Confessions of a former second year IB Analyst
It seems like you'll need to take some kind of hit if you're ever interested in lateralling later in your career and if you only have 1.5 years of IB experience, you aren't really going backwards. You may also be able to negotiate certain things like promotion in 6 months as opposed to a year to help improve the certainty. I'd ignore your age - we had a 1st year analyst join at 27 which translates to a 3rd year analyst at 29 and it's just dependent on when you joined banking. For your CV, you could just put Analyst as your prior role so it doesn't look like a step down. Joining a bigger brand will better allow you to move banks again if needed or switch outside to corp dev or some other role if you ever want to.
Thanks for the reply. Assuming I can’t negotiate for the promote in 6 months, do you have any suggestions for what I can push for to assure that (assuming I perform which I’m confident I will) I receive the AS1 promote at the end of next year?
Presumably you’re OK with comp, feel like a good cultural fit / like the team, etc., so I’ll say this: one year is nothing over the length of your career. If this is a transformational opportunity, go for it. I passed up similar opportunities when I was younger and can see now in retrospect how dumb it was.
FWIW I do think that’s fairly scummy to put you through an associate process and give you an analyst offer.
See if you can get it down to 6 months (I.e. promoted to asc in Aug 2025)
The time flies, and the reps you get help. I lost a year when I lateraled to a top bb, and had to repeat an asc year. Worth it in the broad scheme of the career
I like all the comments already shared. I would say go for it, moving upwind will help you and even you said you've only been in your seat 1.5 years. At any other shop you're still an analyst. In 10 years (hell 5 years) this minor backstep on title / timing won't matter and the opportunity of moving upstream with the new shop will afford you more opportunities later and be better for your long game. I actually turned down a larger MM firm for the exact same thing you are facing, which I was a 3rd year analyst, interviewed for associate but offered 3rd year analyst to move upstream with promotion in next promotion cycle. I passed, took associate at a smaller firm to stay close to home, but I always wonder what if I didn't do that. I'm happy with my decision as I would've never met my wife and I love my group today, but I do ponder from time-to-time... Maybe I'm just living vicariously through you, so take this with a grain of salt!
Thanks for the reply. For the larger MM that you didn’t join, did you have it in writing that you would be considered for promotion within the year? And if so, how did you go about getting certainty of that promotion before you ultimately decided to pass? My concern is I join this group, and then they find a reason to keep me as an analyst (say the firm misses revenue targets) and this one year setback becomes a 2 year setback.
OP, I was in a similar place few years back. As others mentioned, 1 year is nothing in the span of your career and actually means you have one more year going forward to accrue compensation, experience, political capital, and connections before the challenging senior VP years when you need to learn to generate business. This is not a bad thing, even though it can feel painful at first. Just focus on the fact that you aren’t “losing” experience: your immediate title upon joining is meaningless in the long run.
I also went from ASC -> ANL3 when upgrading shops. Wouldn’t have done it any other way. Gave me a free year to learn my new group’s way of doing things without having to worry about the higher bar for how associates need to operate. I am a more successful associate now because I had that first year of boots on the ground execution to learn the ropes in my new group. Top bucket associate now with a good reputation, not sure that would be the case if I started at associate.
Thanks for the perspective. When you went down to AN3 did you have any certainties in your offer letter that you would eventually get the AS1 promote? And if so, how did you accomplish that? As some have mentioned, my main concern is that I take a step back here, the firm finds a reason not to promote me (e.g. missing revenue targets) and then this 1 year setback becomes a 2 year setback.
No, I didn’t request anything is writing - would have changed that in hindsight. Don’t think anyone will guarantee you a promote in certain timeframe, but you should have them include (in writing) that you will be evaluated for promotion in the same performance process / timeline as all other ANL3.
This was almost a problem for me because I joined a week after mid-year reviews kicked off (so HR didn’t include me), but I just escalated to my SMD and told him I need to be considered for promote with everyone else.
Not in IB but I’ve gone through a similar situation. Some points to note from my experience:
Unless it is in writing that they’ll promote you after X months, you can fully expect them to renege on that if even the slightest reason for them to do so comes up. Whether that’s due to your performance, or the performance of the business, they will do it. You need to be prepared for the frustrations that will come with that situation should it occur.
Dependent on your responsibilities at your current level, be fully aware that you’ll be taking a step back in terms of seniority on a practical basis. You might get asked to do menial things that you haven’t done since becoming an associate, which will frustrate you.
People will also have their own preconceived notions of your capabilities and talents purely because of the title that you come in at. You might have done XYZ analysis a hundred times before at this stage as an associate, but your new VP may treat you like you’ve never even heard of it before, let alone led a team to conduct it. This, again, is frustrating and also unpleasant because you’ll realise that you need to quickly make everyone know of your capabilities and experience, otherwise your verbally-agreed promotion will be in doubt (to my first point). When it comes time to make the decision, all it takes is your new VP chiming in with “he’s done well but I’ve only seen him do XYZ once, need to see it a few more times before I’m comfortable he’s ready for the associate jump” despite you having done it 100 times before in your old role to completely derail your plan and put you in a bad spot.
Seriously consider these potential complications when choosing whether to take on this role. You’re gambling on your ability to play quite a political game that you might not be prepared for (and also that the company does well). That being said, I’m glad I took the chance. I moved to a much bigger brand name (and a decently improved salary), learned a lot from the new people I worked with and also learned a lot about how nothing is guaranteed unless it’s in writing. The aforementioned frustrations aren’t pleasant though.
If I were to do it again, I would push to have it guaranteed that after passing my probation I’d be moved up to the agreed title.
Thanks for the reply. This is exactly what my main concern is. I feel I won’t be able to achieve any certainty of promotion as they will just say “well if you aren’t performing then you can’t be promoted” (which, in all fairness, is reasonable). I’m not really concerned about my own performance since I control that and am aware of my capabilities. That being said, how would you suggest that I protect myself from this scenario? My thoughts are to ask them to write out specific, subjective criteria that I will be judged on and omit language that references their ability to not promote me if the business doesn’t perform. Any other suggestions you would make?
You should absolutely understand the promotion criteria before signing up and you should be checking in with whatever line manager equivalent you have to monitor your progress against said criteria. That, however, applies to anyone in any role.
For your specific situation, telling them to omit any language about business performance would be at best redundant, and at worst, come off weird. It’s pointless. Take it from me: if the business is doing bad and they don’t want to promote you, they will 100% not promote you and they won’t lose a minute of sleep over it.
The only thing you can do is have it written into your contract that you’ll be promoted after X period of time. Whether you can do that or not depends on how badly they want you. In the Covid boom economy with a worker shortage, it might have been possible. Now, it’s extremely unlikely.
You’re going to have to weigh up the benefits and risks here. Are you okay waiting 24 months for a promote? I’m not saying it’s going to happen but I am saying you need to be aware that it’s possible, and you need to be prepared for the frustration should it occur. Once again, having gone through this situation I am glad I took the risk even though I did end up feeling like I was spinning my wheels after a while.
I made a similar switch. Went from a ratings agency to a banking role at a less known bank in the US, to a top tier institution and in an industry I had no experience in. The roles and responsibilities given to me in this role are so much greater than in my previous shop. I get to look at so many different types of transactions, and literally have full autonomy on the first draft of legal documentation review, memos etc, on top of learning my new industry. We bank all of the top asset managers you can think of and basically have no risk limitations within reason.
The drawback here is this delayed my VP promotion process by at least 2-3 years, but what I'm getting in return is a transferable skillset from working at an institution that is a top tier player in my industry. People do MBAs to make lateral switches like mine and lose out on so much money doing so, and I was able to make the switch without that cost. I am getting calls left and right from recruiters, and I know a 2-3 year delay in VP won't mean a thing over the long run but what I'm learning today will give me extremely strong fundamentals for the rest of my career.
Here is how I would look at your situation, and you should answer these questions for yourself.
1) What will I gain from joining this group?
1a) Will I get exposure to transactions I won't get at my current shop?
1b) Can I become a stronger banker by working here?
1c) What is the street's perception of this institution?
1d) Where have people exited to from this place?
1e) What is the culture like in your group?
1f) How will this role improve my career within the next 5 years, and compare that to your current role.
2) What does progression look like at this firm from both a salary and title process?
2a) Is it top heavy? How much time does it take to get promoted?
2b) Have you spoken with previous employees at this institution?
3) What will I lose if I join this place?
4) What will I lose if I reject this offer?
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