what do you do after 2 years of IB and not get promoted?

Bowlesman · 10-26-2009, 05:55 PM

what happens if you're not offered a 3rd year after your 2 years as analyst, and/or what if after the 3rd year you're not promoted to associates?
do you switch banks, switch careers or what? and to what careers?
i'm assuming that moving to hedge funds/ etc would be impossible since they want the best of ibankers, and if you're not promoted, you're not one of them.

also, does not getting promoted translate to you didn't do a job well enough, and hence won't be receiving your 2nd year bonus?

hmom5 · 10-26-2009, 07:29 PM

Usually go in house or go to B school.

Awped · 10-26-2009, 07:54 PM

I believe the analyst program (at least in the US) is only for two years and you can't stay longer if you wanted. Lots of people try to get into PE/HF and similar places; it's pretty hard to get into HWS with 2 years banking experience.

BankonBanking · 10-26-2009, 08:47 PM

Taking 1 part of your compound question at a time, first, let me say that most 2nd year analysts get 3rd year offers, but many 3rd year analysts do not get associate promotions.

If you are one of the analysts who do not receive a 3rd year offer, you usually know it in advance, as you will have been rated quite poorly in your second year and should have already been looking for other opportunities, whether in banking, P/E, B school, corp fin, buy side, etc.

If you are one of the analysts who do not get an associate offer, you might be caught a little off guard, as you can be ranked fairly well, 3 or 3+ out of 5 (5 being the best), and get an associate offer, or not get one - this often depends on your group's methods of bringing on associates traditionally, the need to bring on associates in your group, and whether you are interested in staying with your group or moving to another. If you are ranked a 5, you should get the promotion, and generally 4s are promoted - although this does vary from group to group and bank to bank - again, the associate promotion, since it is generally the B school entry point, is a trickier matter since some banks rarely promote, and others try to grow from within, and the same goes from group to group within banks.

If you are not promoted or not given a 3rd year offer, you will have to move on - whether you find a new home within the bank, move to a boutique, P/E, other buy side, commercial finance, corp finance, etc, you will be termed out upon the expiration of your contract, either at your 2-year mark, or your 3-year mark (depending on your situation). Since it is the end of a contract, you will not be given severance, but you will be given a bonus based on your ranking just as the other analysts are given bonuses based on their rankings. A 3rd year 3+ who doesn't get promoted, should get the same bonus as a 3rd year 3+ who does get promoted, although the promoted analyst will usually get an associate sign on bonus, raise, and so forth.

If you are not given a 3rd year and you haven't yet found another opportunity, your marketability will be a bit less than if you are not promoted to associate simply because it is easier to get the 3rd year offer than to get the associate promotion. At the end of the day, however, not getting an offer/promotion is not as important as your experience with the firm over your 2 or 3 years. Deal experience, project responsibility, modeling skills, contacts, etc, will carry you in your pursuit to find a new home - you may have to look at some smaller shops, boutiques, etc, but you should be able to find a home (in an average economy, the current market will still be tougher than in general). Although you might be asked whether you received an offer or not, and if not, why not, you can absolutely craft an answer that doesn't lead to you shooting yourself in the foot - bank on your experience and sell those experiences.

Finally, regarding B school, while it is difficult to get into top schools with just 2 years of experience, if you can point to strong experiences over those 2 years, coupled with some leadership activities whether in college, during your professional career, or both, craft some articulate essays and get some solid recs (even though you don't get a return offer, most bankers will still write a letter supporting your candidacy as long as you tried and were a decent analyst - in other words you weren't not given an offer because of a terrible attitude), you should definitely have a shot. The application and review process is often a good bit about luck, so give it your best, and if you don't make it that year, you can pick up a nice non-profit gig, or work in corp fin, etc for 1 year or 2 and then reapply - if B school is something you are seriously interested in. Also, since you are coming from a banking background, you will be expected to do well on the GMAT (although regardless of your background, for top schools, you will be expected to do well on the GMAT - in the 700s).

If you have any other questions, feel free to PM me.

IBanker

Wallstreet101 · 10-26-2009, 11:28 PM

Bankonbanking, do you know if it's the same with asset management analyst programs (are they also 2-3 years only)?

BankonBanking · 10-26-2009, 11:41 PM

I'm not sure about those programs - I can speak broadly to IB, but not to AM - I know the analyst programs themselves are the same, but I don't know how promotions work, 3rd year offers, etc - for example, operations (back office) promotions are very political. I don't know which side of the spectrum AM falls.

IBanker