Why do banks have vice presidents

ET India Inc. ET Engage. ET Secure IT. Auto Auto News. Auto Components. Products Durables. Energy Power. Services Advertising. Baiju Kalesh. Anita Bhoir. Sangita Mehta. Arijit Barman. Rate Story. Font Size Abc Small. CEO Lloyd Blankfein said at the time that Goldman had 12, vice presidents, or roughly 40 percent of the company. Wall Street is a different animal, where moving up the ranks to managing director does signify a larger paycheck and more responsibility.

But if you are in a big bank, you think about it and talk about it. These days, earning the vice president title carries little pomp and circumstance. There is some variation depending on division, though. Your name is heard much closer to the halls of power. Nearly all entry-level analysts come from top schools and perform very well academically.

Most start out with an investment bank on a two-year or three-year program, where they act as the grunts for higher-ranking employees. It was easier to start out as an analyst during the s and s before firms across the globe adopted the same recruitment strategy; many came from other financial firms or analytical backgrounds. Today, most investment banking analysts are very young and very raw but have outstanding credentials and an eager attitude.

Too much experience in other work often leads to the dreaded "overqualified" label and being passed over for a recent master's degree student. Many analysts are colloquially referred to as "monkeys" by higher-ups, and most spend their days following orders from associates and directors.

The life of an analyst is filled with Excel, PowerPoint, research, and very little sleep. This role is part analyst, part computer technician, and part personal assistant. If an aspiring investment banker does not go the traditional route, the associate level is the most likely gateway. Most still come from top MBA programs or were groomed as analysts for a few years, but some are impressive performers in other roles at other financial firms, particularly equity research.

It would be a little misleading to lump all associates into one category. Most investment banks actively treat first-year associates differently from second-year associates, and they treat second-year associates differently from third-year associates. First-year associates spend a great deal of time watching over the analysts and performing many of the same tasks; think group leaders. Third-year associates have proven they can stick around, so the higher-ups groom them for vice president roles.

Analysts spend most of their energy keeping their heads above water and relentlessly crunching numbers. It is not a stretch to say the most important traits are analytical skills and endurance. Associates still need these skills, but their focus shifts to communication. Specifically, an associate needs to process communication between senior bankers and their teams of analysts, and they spend a great deal of energy smoothing things over.

A vice president is the most junior of the senior bankers and, as far as clients and higher-ups are concerned, carries the first legitimate title. An investment bank vice president is treated as an individual with their own thoughts and opinions.

The life of an investment bank vice president centers on two responsibilities: completing pitch books and managing client relationships. Neither of these is an easy transition, especially for associates who mastered the analytical side but do not have the requisite social graces. For a normal deal, a VP coordinates a team of associates to put together a pitch and spends their days speaking to clients constantly.

How much are you paid as an analyst? Despite being at the bottom of the pile, analysts in investment banks are paid pretty well. How many hours do you work as analyst? The downside to being an analyst in an investment banking division IBD has always been the working hours.

When people talk about 80 hour weeks in banking, it's investment banking analysts their referring to. Most banks have got policies in place to cut analysts' working hours , especially at weekends, but it's still common to work from 9am to midnight - or later - on weekdays. The chart below, from consulting firm Quinlan Associates, shows each bank's policy for reducing working hours.

What associates really do in investment banks:. Associates are one notch up from analysts. After you've done your two or two and a half years as an analyst, you should get promoted to an associate. You can also enter a bank as an associate after studying an MBA - although this is harder now than it used to b e. Associates are like analysts, except more important.

Associates' immediate purpose to manage the analysts below them and to communicate the wishes of the vice presidents VPs above them. The associate's role is partly to, "guide the analyst in preparing the presentation and doing the research," he says.

The analyst does the work and the associate checks it. If you have a 50 page presentation, the analyst will usually do pages and the associate will check them and do the rest.

Associates are still expected to do analyst-type work, says one former associates, although she says that, "analysts are technically the "producers" of all the work and the associates are the "checkers" of it. How long will you be an associate for? If you last the course, you'll usually be an associate for three years.

How much are you paid as an associate? How many hours do you work as an associate? Associates usually - but not always - work a few hours less each week than analysts.

If you're a lazy associate with a good analyst, you can leave early. If you're an ambitious associate with a bad analyst, you'll still be working at 2am. What vice presidents VPs really do in investment banks. It's when you get to vice president VP level, that things start to get interesting. Suddenly, you're more outward facing - you actually get to talk to clients.

However, you also have to manage the team and oversee the process of putting the client presentations together and this can be stressful. Vice presidents help to manage clients on a daily basis, says Michel.

They also manage the associates and by default the analysts and make sure the necessary financial models and Powerpoint presentations are being built. However, they're also the ones who speak on the calls to the clients. They help keep the clients up to date with how things are progressing.