Junior bankers share what they actually do – and why their hours are so long
Frances Chan
What do investment banking interns, analysts, and associates actually do day-to-day? To get the inside scoop, we chatted with an associate at JP Morgan.
- What junior investment bankers do day-to-day
- Why investment bankers work so much
- Where can I find internships?
Note:
- "Analysts" are entry-level investment bankers fresh out of college.
- "Associates" are the next level above analysts, so they're either analysts who were promoted after a couple of years OR MBAs hired fresh out of business school. Associates manage analysts, but they're both considered junior roles.
Part 1. What junior investment bankers do day-to-day
What interns do
Interns in investment banking are called "Summer analysts" – and it's for a good reason. Investment banking internships are an accurate reflection of the day-to-day of an analyst, just more limited in scope due to the short time frame (generally 10-12 weeks).
If you're an analyst intern, you get to do everything first-year analysts do but just with someone checking your work. In fact, a lot of people say that the benefit of the intern experience is to help you prepare for full-time so that there aren't any surprises when you come back full-time.
– Investment banking associate @ JP Morgan
For example, interns get to work on real M&As and IPOs.
We try to do is to get interns as involved as possible, so even as an intern, you get staffed on actual deals.
When I was an intern, I remember one of my fellow interns was staffed on an IPO that finished while he was there, so he was part of the team when the company went public. It was a spinoff IPO of Victoria Secrets and he saw the deal to the end.
(You won't always be so lucky, of course. I was staffed on a potential buy-side deal that went through after I left, for instance. Or you might be staffed on a deal that ends up dying.)
– Investment banking associate @ JP Morgan
As an intern, you'd help analysts with their work.
As a summer analyst, you might help out with modeling. The full-time analyst will own the model but they'll ask you to make certain adjustments to the model.
Or you might help make a pitchbook. A full-time analyst would own the book, but they'd give you a page to work on, but that becomes the page you're responsible for. So you'd get little pieces of the bigger work to contribute.
– Investment banking associate @ JP Morgan
You might also work independently on some projects.
When I was an intern, I did research on companies that would make sense for us to market sell-side services to. For example, maybe a company is struggling financially and it would make sense for them to be sold.
I was given some guidelines and I came up with a list of companies using databases like Bloomberg, Pitchbook and Factset. I'd then look at their financials to make sure it makes sense. There wasn't any other full-time staff on the project.
– Investment banking associate @ JP Morgan
What analysts do
As an analyst, you're basically doing work that your associate assigns to you. There's a lot of it, and as the person at the bottom of the ladder, you can't really say "no."
Analysts do a lot of grunt work.
- If there's modeling to be done, they'll start the model and I'll review and make updates.
- If I want to make a PowerPoint, I'll ask them to start putting some slides and I make updates.
Analysts work the longest hours. It's tough being in a career that expects significant hard work and then being the most junior person on the team. Like, I work long hours, but they work even longer hours. A lot of them get burnt out and leave before they get promoted.
But the advantage for them is that they get really, really good at doing things quickly and finding shortcuts. So if you see an analyst that stays on to associate/VP, they're generally solid. But it's tough.
– Investment banking associate @ JP Morgan
Let's dive in!
#1 Modeling in Excel
A big part of a junior investment banker's job is to make financial models that predict how well a company is going to do in the future. At the end of the day, a model is like a story that you tell about a company.
To give you an idea, here's a very simplistic model showing how a lemonade stand might do over a three month-period, based on some basic assumptions, like how the sales volume might increase as the weather gets hotter.
| Price per Lemonade | Cost per Lemonade | Fixed Expenses | Sales Volume | Revenue | Cost of Goods Sold | Gross Profit | Net Profit | |
| Month 1 | $2 | $0.50 | $100 | 100 | $200 | $50 | $150 | $50 |
| Month 2 | $2 | $0.50 | $100 | 150 | $300 | $75 | $225 | $125 |
| Month 3 | $2 | $0.50 | $100 | 200 | $400 | $100 | $300 | $200 |
Here's what this looks like in chart format:
In real life, the models will be much more complicated. Senior bankers will then take visuals like this to potential investors to convince them that their client is a good investment opportunity.
What makes modeling so difficult or time-consuming? Well, investors aren't that easy to convince. That's because we're talking about institutional investors like hedge funds and big private equity firms.
You have to be able to justify everything in your model. I need to look at industry growth over time, competitors and how they're doing, whether this company is growing rapidly compared to the rest of the industry.
There's a lot of work that determines what assumptions you can use before you even use them. So that takes more time than even the modeling itself. Like you can use templates to do the actual modeling, but you have to think about what assumptions to put in there before you do that.
– Investment banking associate @ JP Morgan
And then there are times when you complete your model and senior bankers tell you to change it.
So, after I do all my research, I might come to the conclusion that the company will grow 5%. My Managing Director (MD) might be like "No, this doesn't make sense. It feels more like 7%".
Of course, this isn't just what they feel. They've been in the business for a very long time, specialize in the field, and read a lot of reports, so their intuition is based on a lot of experience and knowledge.
MDs are also the ones having the meetings and conversations with prospective buyers so they know how much they're willing to pay for a business you're pitching, which is what ultimately determines what a business is worth.
– Investment banking associate @ JP Morgan
#2 PowerPoint slides
When we have meetings with clients, we need to put together PowerPoints. So you also do graphic design work. It needs to look beautiful. [how beautiful?]
– Investment banking associate @ JP Morgan
#3 Administrative tasks
Here's a taste of the kind of administrative tasks you'll need to do as an analyst.
- Scheduling meetings with clients: You'll get everyone's availability.
- Printing books for clients and buyers: When we develop a PowerPoint, we print out the whole deck so people can reference them in paper form. Or if you're doing a presentation for a buyer, you give it to them so they can follow along during the meeting. Yes, we can just print out the slides and staple for a casual meeting. But for more serious meetings, we have a printing center so finished product is binded and has a beautiful cover – that's why we call them "books" – and analysts are responsible for getting the printing done.
- Mailing the books: In December, I had to travel to Texas with a meeting to help out a client. I could just pack the books in a suitcase, but if there are a lot or I don't want to check in a bag, we work with courier companies who transport the books so they arrive at the hotel ahead of time. Analysts would be the ones coordinating with the courier companies.
- Ordering food for happy hours: Analysts are the ones asking people what they want to eat and what they don't. We have actual admin roles as well, but sometimes analysts handle things like this when everyone's too busy. Or let's say it's just our team that's hanging out. They'll plan what restaurant we go to or what we do if we eat in.
- Handling deal toys: Every time we finish a deal, there's a plaque we get, which is like an award that we did that deal. They'll work with the vendor who creates the deal toy and pick a style.
– Investment banking associate @ JP Morgan
An assortment of deal toys, courtesy of Bardo333 on Wikipedia
What associates do
As associates:
- We attend lots of meetings.
- We supervise the grunt work that analysts do.
- We take on some of the grunt work ourselves if there's too much of it.
– Investment banking associate @ JP Morgan
#1 Meetings
You can think of it like this: Investment banking analysts take care of most of the grunt work so associates can sit in meetings.
We attend all sorts of meetings. Every day, I look at how many meetings I have and make sure to prepare for them.
- Meetings for new deals: Say you get staffed on a new project. What typically happens is you have to set up a meeting with the Managing Director, Vice President. The entire team needs to have a meeting to discuss expectations – i.e. "This is what the client is working for, this is what we're supposed to do, and when we're supposed to deliver". If the MD wants to get it in two weeks, you'll need to send it to the VP in a week. So we have meetings to align on things.
- Meetings for existing deals: We'll also have daily "stand-up" meetings where we do progress updates – i.e. we discuss where the project is at and what's happening.
- Meetings for deals nearing completion.
- Due diligence meetings.
- Meetings with clients. Let's say you're selling your client. Investors will have a lot of questions like "Why did revenue go up 5% this year when it went up 8% last year?" Or they'll ask for documents which you can't provide. So you'll need to jump on meetings to explain yourself.
- Internal meetings: I'll also have weekly meetings with my group and monthly meetings with the full division.
– Investment banking associate @ JP Morgan
#2 Supervise analysts
Managing people isn't just managing people – if there's a lot of work to do, you'll need to roll up your sleeves and get your hands dirty too.
We supervise their grunt work like a project manager. We make sure everything is going well. But if they're too busy, I take on some of the work ourselves.
– Investment banking associate @ JP Morgan
Part 2. Why investment bankers work so much
#1 Too much work that's hard to divide up
We're understaffed. You just have so much to do in so little time and there's not enough people to do that. Everybody has so much going on that we could use more people.
– Investment banking associate @ JP Morgan
Unfortunately there isn't really a solution to understaffing. Some bankers have also brought up that hiring more analysts doesn't help since you'd have to divide the work into smaller pieces, which only leads to more work.
- A lot of the work in investment banking can't be split up that easily. On any given deal / pitch, a lot of the work is interrelated and needs to be concentrated among a couple of people; there aren't a lot of small, independent tasks that can easily be divvied up. You can only have so many people working on the model or the deck before the team becomes inefficient and has version control issues.
- There are good reasons to consolidate work among a small number of people. Because there are relatively few employees for the volume of work, people can quickly develop expertise in certain sub-verticals or products. If there were a lot more employees, it would be hard to gain the necessary experience to become highly valuable in any area. Also, the strong performers generally want to be doing a lot of work and taking ownership of large projects – the current model drives the best projects and greatest volume of work to the top performers, which is a good outcome for all parties involved.
#2 You're at the beck and call of your clients
Remember: Your clients are paying you a lot of money, so they expect really good service.
Investment banking is a client-centric job. If your client asks for something you didn't expect, you have to accommodate it. You have to put it into your schedule and work around it.
– Investment banking associate @ JP Morgan
#3 A culture of poor management
Everything goes through multiple rounds of review and the people who do the reviews don't always respect their subordinates' time.
Bankers are poor managers and generally do not respect other people's time. There is a 'hazing' culture, where senior bankers feel they've paid their dues and expect junior bankers to pay their dues too.
They generally work in silos and lack communication/collaboration between groups/departments, so there are many last minute change-of-minds and re-doing of work. They tend to focus on what is immediate and urgent, not necessarily what is time consuming (less immediate) and important (less urgent). The time consuming work gets pushed to the end of the day and shoved to the junior bankers after general work hours.
There is a culture where they expect junior bankers to turnaround work overnight. In turn, when these junior bankers rise in rank, they reinforce this culture to the new generation of junior bankers. Increasing headcount is not effective against a management and institutional cultural problem.
– Former investment banker @ Goldman Sachs
#4 Junior bankers are seen as disposable
Why would banks reduce their margins just to improve quality of life for junior people, when right now, they have thousands of applicants lining up for these jobs?
#5 Junior bankers are OK with the system
Junior bankers are culprits as well. There is a steep learning curve, mistakes are inevitably made (part of the learning process) and time wasted.
However, many join the banking industry with the knowledge and 'expectation' to be abused - so that's what they got.
They feel there is a need to show 'facetime'. They feel they need to meet and beat expectations. They allow themselves to be a 'reinforcer' of this culture. Then again, they probably would not be hired without this mentality in the first place.
– Former investment banker @ Goldman Sachs
Investment banks hire people who are interested in working really hard, and entrust those employees with a lot of responsibility. In return, the employees learn a lot and get really great experience working on deals. It's not for everybody, but ... there's no incentive to dramatically change their hiring system.
Part 3. Where can I find internships?
You can find plenty of internships on Prosple. We have a vast selection of internships curated for students like you. Filter 'til you find the right fit!