Investment associates play a pivotal role in investment banks. As the core engine of deal execution teams, associates need to have strong communication, leadership and modeling skills to coordinate analysts and interface with clients. This article elaborates on the work content, salary, promotion path and skills required for investment associates, based on interviews with bankers who have advanced from analyst to associate and beyond. There are significant differences between industry groups vs product groups, and sell-side vs buy-side deals. Understanding these nuances helps analysts position themselves for promotion to associate roles in their desired product area.
Analyst to associate promotion requires broadening skills
The promotion from analyst to associate is rare without an MBA degree. Analysts spend 80% of time on financial modeling whereas associates devote 60% effort to communication and leadership. To ready themselves, analysts should hone soft skills by leading teams and interfacing with clients. They must articulate the value-add they can bring to win associate roles competing with MBA graduates. Besides modeling proficiency, associates need relationship management abilities to coordinate analysts for optimal team productivity.
Each have strengths – industry vs product groups
Large investment banks have industry groups and product groups. Industry groups like TMT, FIG, healthcare focus on specific sectors. Product groups like M&A, ECM, lev fin execute niche products. Analysts in industry groups gain broad sector knowledge but limited hands-on modeling experience. Product groups provide rich deal modeling exposure. Associates should choose groups aligning with desired product skills.Sell-side M&A deals are increasingly commoditized by software automation. Buy-side deals still rely heavily on experienced bankers and offer higher profit margins. Associates should target banks with strong buy-side deal flow.
Associate pay and hours – rewarding yet demanding
Analyst base salaries are around $90k-$120k, associates earn $150k-$200k. Bonuses range from 0.5x to 1x base pay. Associates work 65-80 hours per week, with higher hours during live deals. Promotion to VP takes 3-4 years with strong performance. The associate level is the peak for many -those unable to advance often leave banking for other roles. Success requires diligence, relationship skills and pursuing appropriate platform banks to gain well-rounded deal experience.
Investment associates are the engine driving execution of investment bank deals. Promotion from analyst requires broadening skills beyond modeling, specifically communication and leadership abilities. Joining product groups and banks with strong buy-side deal flow enables associates to gain diverse transaction experience and maximize chances of further advancement.