by Girl Banker®
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I'll give you the standard textbook answer and then I'll tell you a little about the variations that I have seen.
All newbie front-office investment bankers in both corporate finance and the capital markets start life off as analysts.
The table below sets out the different career stages in an investment bank; the terminology used in European banks is slightly different to that used in American banks. You may find further differentiation in specific banks, e.g. splitting the VP category into junior VP and senior VP, but broadly speaking the below applies.
'Analyst' is usually a three year stage, 'Associate' is normally a three to four year stage depending on progress and internal politics. 'Associate Director' in a European bank is normally two to three years. 'VP'/'Director' can be as short as two years, or indefinite! Some people never make it to MD. Your emotional quotient (people skills) and your ability to master corporate politics can be critical in making that jump from VP to MD.
Does anyone move up the chain faster than this?
If you are a star performer you can zoom right up to the top in no time. I know a really smart guy who joined the trading floor as a Ph.D. from the University of Chicago (you know, the same place where Milton Friedman went); he jumped from Associate to VP to MD to Partner in roughly two year stints.
He was super, super bright. He paid me the biggest compliment I have ever been given: he said, 'I think you're special,' and coming from such a bright spark, I still feel good when I think about it today :)
Can one get demoted?
Unfortunately, yes! I have seen two types of demotion:
1. An actual demotion. I know a PMD at Goldman who wasn't making enough money to warrant the coveted title so he was recrowned just an MD.
2. Role change. If someone isn't producing the results that the firm wants, they just make them join another team. Especially in the UK, firing people is expensive and management would rather just send them hints so that they quit themselves.
I created my investment banking blog in 2012 as soon as I resigned from i-banking & published my book, To Become An Investment Banker.
Initially published at girlbanker.com, all posts have now been subsumed into my personal website under katsonga.com/GirlBanker.
These blog posts make it as straight-forward for you as possible to get into a top tier investment bank.
I have 7 years of front office i-banking experience from Goldman Sachs and HSBC, in both classic IBD (corporate finance) and Derivatives (DCM / FICC).
I'm also a CFA survivor having passed all three levels on the first attempt within 18 months - the shortest time possible.