Roadmap for IBD Coverage Associate to Career Banker
In IBD, I think most bankers would acknowledge that the Associate role is unique in that you are beginning to get out of the "junior banker" (Analyst / Associate) category and are starting to reach "Officer" or "Director" level (being able to sign documents, starting to get closer to revenue generating responsibility). While VP/AD's and above might not spend as much time in the office per se, the stress transitions from grinding out numbers to developing client relationships and generating revenue. This is some advice I've been given / learned that I think was helpful. Would like people's perspectives or comments on what they think is helpful or not.
Pick Your Projects
This advice might be more targeted to BB coverage teams. Different banks / teams have different models, but when you are a Junior Associate (Associate 0 or 1), I would recommend picking up a variety of execution types regardless of what industry you are in. You want to be equally be able to handle an M&A process (buyside and sellside), equity financing, high yield financing or any other potential product. As an Associate, you want to be able to "block and tackle" issues that come up during execution so that the senior bankers can focus on developing the relationships and generating revenue. It also gives you a strong foundation to be able to answer client questions in the future. As a future senior coverage banker / relationship manager, you want to be able to "deliver the firm" to your client so to speak. You should maintain good relationships with your product groups, but you should eventually be able to explain to your client at a mid-to-high level their product options, what is happening in the space etc. (You should be able to explain low-to-high, but when client facing you need to be succinct and summarize so "low" is usually inappropriate). Build a good foundational skill set so that as you become more senior (Associate 2 / 3) you can start to position yourself to focus more on coverage.
Pick Your Teams
Both directions: senior and junior. After You've been an Associate 0 or 1 and are creeping into 2 / 3 territory, you want to start thinking about what space you want to cover as a VP and start building up. You want to think about what space makes sense for you to play in and who are the senior guys you should work with (or vice versa). You should also keep an eye on Analyst 1 / 2, Summer Associates who you want to work with as you get closer to promo time. Analyst 1 / 2 is currently probably appropriate for your level, but they will probably be gone soon. Summer Associates will probably eventually become your FT Associates when you're VP. You need to make sure that they are (as you are) able to be given responsibility and can act as "safe hands" when putting together high quality analysis.
Mentoring
Following the previous point. There has been a focus on quality of life / experience lately, especially at the Analyst level. Increasingly, senior management teams across banks are making an effort focus more on Analyst issues. As a result, 360 feedback has become an increasingly important part of overall performance. What does this mean for the Senior Associate? What your Analysts say about you matters. Besides which, if you have strong Analysts that like working with you, it can make your life a lot easier than being assigned the bottom bucket Analysts because other Analysts are actively avoiding you. Also, you should make sure that the team below you has the skills to support you so that you can start making the transition upwards (slowly getting closer to revenue generating responsibilities). Find the right Analysts / Summer Associates who are worth investing in and then start investing in them.
Attending Client Meetings
All junior bankers want to attend meetings. However, very few take full advantage of the opportunity presented to them. Usually, you are in a room with the most senior management team at the company discussing topics critical to the company's future. Any employee of the company would probably love to get a few minutes of time with any individual person in the room. Listen carefully, take good notes, see how your senior banker addresses company questions, deals with internal/external politics, answers sensitive or controversial questions, discusses opportunities in the market or how to think about transactions. In the same way that we were doing stock pitches and reading the newspaper when we were in MBA school to learn how to pitch in an interview, now you need to start learning how to pitch for real by watching the pros (your bosses) first hand in a low risk environment to you (while you are an Associate with no revenue responsibility).
Attending Internal Meetings
Most banks offer a bank wide meeting where product teams and coverage groups review key highlights in the market (deals done by the firm, deals done by other firms, market commentary, commentary on the Fed etc.). Same as above, sitting here and looking at the firms senior leadership providing highlights gives you talking points you can potentially share as conversation fodder. It is the easiest way to look smart. Borrow knowledge or views from people that are in deep and pass the information flow to your client, an interested party who is simply too busy running their business to have the same depth of knowledge you have access to.
Develop Relationships Early in Low Risk Settings
You currently have no revenue pressure. Take out the client junior team for lunch, drinks or coffee. Get to know them. Get them comfortable with you calling or emailing them. Answer their questions as much as you can (and as appropriate - don't contradict your boss or expound on things you don't know). As per the various "Attending Meetings" portions above, if you struggle with this like I do, borrow some language and highlights from your senior RM / product experts.
This my take, but would be happy to get any feedback. As always, SB's for good comments / advice.
Mod Note (Andy): Best of 2016, this post ranks #26 for the past year
thanks for the post!
Thank you for posting this. Do you have any recommendations for analysts looking to stay on as an associate?
Actually, I do. As part of my trying to mentor strong Analysts, my recommendation / feedback for strong Analysts is for them to try to find appropriate mentorship opportunities. For strong Analysts, typical feedback is "X is a strong Analyst. Should look for more opportunities to work on a variety of different product types. X should also take more opportunities to mentor Summer / Junior Analysts and take a more Associate like role". As an Analyst, it sucks sometimes because you are the lowest man on the totem pole, so often mentoring summers / actively participating in the summer program is the most appropriate way to take a leadership role. If you have gotten to the point where you are a strong trusted Analyst, it helps to be more Associate-like.
There are also small thinks that help with coverage: example, monitoring your RM's universe. Quite a few times I would reach out to an RM and say something like: "Hey did you know Y's share price has run up lately to its 52 week high of $12? Last time it was close to $10, a seller sold down a position, maybe we should see if they are interested in selling down another block". Small things like this show the senior guys you are interested in helping to drive revenue.
Great, thanks for this.
This is outstanding advice for all monkeys, SBed.
Thanks for taking the time. On attending client/internal meetings, in addition to listening/observing attentively as you've detailed in your post, is there anything junior associates can do to add value or contribute to the meetings in any way? My previous understanding is that most of the value-add associates can do are done pre-meeting.
I think the easiest opportunity is to ask senior bankers to give you basic speaking roles. For example, walk the client through the football field. This stuff is pretty standard and low risk, but gives you an opportunity to at least say something in the meeting. Also, assuming you are intimate with the work, you can answer basic follow up questions (how did you think about ramping synergies, how does the leverage come down over time etc.)
I've had senior bankers say they wish more juniors would offer or ask to participate in meetings. Might not always be appropriate, but at the very least shows that you are interested in participating.
Thank you for the response, this is very helpful.
What did you find to be the most stressful part of being an Associate, and how did you cope with that?
As an Associate, the analytical buck stops with you. The analysts are often the hands, but sometimes you have to take the lead. So you are responsible for all the details. Checking work occupies most of your time. Yet, you still have to try to rise above that towards the senior end of your term as you want to look more VP-like.
Great post. DOnt really see more of this often
How easy is it for associates to move between industry groups, either at the same bank or via lateraling to a different bank? I assume it is relatively easy since associates are still doing a lot of analyst-type work, but figured I would ask.
I think it's relatively easy. I've seen people move between coverage groups or to / from product groups. To my first point, as an Associate (especially a Junior one) it's more about getting that execution skill. Industry knowledge is very helpful as you become more senior, but event the best bankers won't have the same intimate knowledge of the industry as our clients do.
Some groups (FIG, Nat. Resources) have very particular ways of looking at things. From what I'm told: EBITDA doesn't carry the same meaning in FIG and terminal values in Nat Res. are "different"... Doesn't make it impossible, but intellectually different.
Thank you for the post!
Just wondering - would any of the key points you mentioned in your post be different if we were talking about a product banker (ECM/DCM/LevFin) instead of a coverage banker?
I'm not a product banker, however, some of the product bankers I work with (Associates in title, but a VPs in attitude and performance in my opinion) have some great qualities which make them a pleasure to work with. They know their product inside and out.
They understand what products make sense in which context. Generally, they are the guys I want to bring to meetings because they are very additive to the conversation. They have great commentary on the buyside in terms of who has appetite for different products in difference spaces. They are well versed in what structures might work to make deals happen. They also attend those Internal meetings I mentioned earlier and often deliver the market commentary if the senior guys are out.
I call them to understand how much to model the gross spread for an equity offering, who would buy it, what rate a company could do a high yield financing for, to understand debt covenants or structuring quickly etc.
Great post! I wonder how much of this is applicable/important at an analyst level?
Lol I have never looked at an associate as anyone but a junior banker or have talked to a senior associate who wasn't jaded. Overall probably good advice, but getting to a 9am industry / whole bank conference call to learn some market Intel is the last thing I wanted to do if I was up till 4am the night before grinding out CIM comments.
Great post. SB'd.
I see that you're a VP and came in at the associate level. What were the biggest challenges you faced from a technical aspect, coming in at the associate level? How long did it take till you were up to speed/on par with A2As?
Thanks for this thread! It's exciting to see another aspiring career banker on this site. A question I had was that as an analyst, how do you stand out in terms of going beyond your role? I've asked for and been trusted with leadership roles within my firm and was given one speaking role at a meeting (hopefully more to come) recently regarding CIM financials. Basically trying to get more client exposure while killing it on the analytical stuff, anything else you'd add?
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