The investment banks' organizational structure
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Investment banks have a rigid and strict hierarchy that is comparable to a military organization, where each rank means a great deal and carries specific, significant perks as you advance. The typical hierarchy of investment banks is common to almost all investment banks, although non-US banks may have different job titles. However, regardless of the titles, job descriptions tend to be consistent from one investment bank to another.
Learn more: What do investment bankers do?
The following guide outlines the typical hierarchy of investment banks.
1. Investment Banking Analyst
Almost all investment banking analysts enter the industry as fresh graduates from the best business schools. Most investment banks have a two-year program, after which the analyst rises to the associate rank. The majority of an analyst’s work involves researching companies, building financial models in Excel, and creating PowerPoint presentations that the bank uses to communicate ideas to potential clients. An analyst earns between $100,000 and $150,000 annually.
Learn more: Analyst career path.
2. Investment Banking Associate
After working for two or three years as an analyst, you are promoted to the associate rank. Alternatively, you can sometimes enter the associate rank directly, skipping over being an analyst, if you arrive with a graduate degree from a top MBA program. Apart from watching over the analysts, an associate spends most of their time talking to clients and seeing what they need. They may also work alongside analysts in preparing pitch book materials and in financial modeling. The salary of an associate varies between $110,000 and $300,000.
Learn more: Associate interview questions.
3. Vice President
An associate typically rises to the rank of a vice president after working at the bank for a period of three to four years. A vice president speaks to clients and updates them on how deals or transactions are progressing. By default, the analysts and associates fall under the vice president, whose responsibilities include ensuring that PowerPoint presentations and financial models are built in the right way. VPs have an active role in executing deals with clients and, therefore, earn a substantially higher salary than associates or analysts. The pay usually ranges between $150,000 and $450,000.
Learn more: Investment banking pitch books.
4. Director/Senior Vice President
A Senior VP may also be called a director or principal, depending on the company. To become a Senior VP, you must have worked in an investment bank and risen up the hierarchy. It is unheard of for someone to be hired for the position from outside the bank. A Senior VP deals directly with a lot of clients and acts as a bridge between the clients and the team in the lower ranks. Senior VP pay ranges between $250,000 and $1.5 million, inclusive of bonuses.
Learn more: M&A process overview.
5. Managing Director
The Managing Director sits at the highest level of the investment bank hierarchy, and he/she is responsible for the profitability of the bank. It takes a long time, considerable skill, and even some good fortune to get to this level. The work of the Managing Director is to know how all the deals are progressing and to be aware of what is happening in the political or economic environment that is likely to affect the bank’s operations or their clients. Most of a Managing Director’s time is spent on soliciting new clients, meeting potential investors, and building relationships. They make between $500,000 and $4 million – in a good year, their gross income may hit $10 million. If the bank is not making money, then the Managing Director takes the blame. If the bank is doing well, then they take the credit, in the form of higher and higher levels of compensation.
Learn more: Interactive Career Map.
Read More about Investment Banking
We hope this has been a helpful guide on the typical hierarchy of investment banks and investment banking jobs. Below are more free CFI resources to help you advance your financial services industry career:
FAQs
The typical structural hierarchy of an investment bank includes investment analysts, associates, vice presidents, senior vice presidents, and a managing director.
What is the typical organizational structure of a bank? ›
The typical organizational structure in a commercial bank is the following: a financial holding company (or bank holding company) at the top of the pyramid; below the holding company is the bank itself; finally, the bank may own subsidiary companies involved in credit card lending, commercial finance, and equipment ...
Is a 3.7 good enough for investment banking? ›
Does GPA Matter for Investment Banking Jobs? Yes, GPA matters! Bulge bracket banks and almost all other investment banks will look at your GPA when applying for a job and you should include it in your resume. Typically banks screen resumes based on GPA and will often remove anyone below 3.5.
What is the hierarchy in banking? ›
Promotion Structure in Public Sector Banks
| Hierarchy | Scale | Grade |
|---|
| PO | Scale I | Junior Management Grade |
| Manager | Scale II | Middle Management Grade |
| Senior Manager | Scale III | Middle Management Grade |
| Chief Manager | Scale IV | Senior Management Grade |
5 more rowsDec 9, 2023
The main types of investment banks include regional and elite boutiques, middle-market banks, and bulge bracket banks. Boutique firms typically have a smaller client base, while bulge bracket banks handle huge corporate clients, and middle-market banks are between the two.
What is the hierarchy level of finance? ›
Hierarchy. Typically, the CFO is the highest-ranking finance team member in the company. In a traditional company hierarchy, they are usually third in line, behind the CEO and COO. The CFO reports directly to the CEO.
What is the typical organizational structure of a finance department? ›
The CFO team structure typically includes the CFO, VP or Director of Finance, Controller, and Treasurer. Other roles may include financial analysts, tax professionals, and risk management specialists, depending on the size and complexity of the organization.
What are the 4 main Organisational structures? ›
What Are Some Types of Organizational Structures? The four types of organizational structures are functional, multi-divisional, flat, and matrix structures.
What is Organisational structure in JP Morgan? ›
The JPMorgan Chase's org structure is segmented into four areas: Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking, and Asset & Wealth Management.
Does JP Morgan look at GPA? ›
Q: What are your GPA requirements? A: We value diverse degree backgrounds and experiences and while a GPA 3.2 (or equivalent) in your undergraduate degree is preferred it is not required. Our training programs are designed to allow everyone, regardless of major studied to succeed.
Goldman Sachs does not give a specific minimum GPA requirement, though some sources suggest a GPA of at least 3.6 is preferred. Additionally, you may need to show relevant coursework and hard skills for certain programs.
What is the average GPA for Goldman Sachs? ›
U.S. students joining Goldman Sachs and JPM, may not be the very, very brightest, but they're still incredibly bright. The average GPA at each firm was at least 3.72 (93%).
What is the hierarchy at Goldman Sachs? ›
Hierarchical Organizational Structure: Goldman Sachs follows a hierarchical organizational structure with a well-defined chain of command. The company is led by the Chairman and CEO, David Solomon, along with a Board of Directors and several levels of management underneath.
Why is everyone a VP at a bank? ›
It has to do with the history of US banks. Way back in the 19th century, you had several banks in one city, and a President and a Vice-President. Over time the banks merged and vice-presidents kept their titles, which resulted in a ton of vice presidents.
What is 4 tier hierarchy of the banking structure? ›
It recommended the introduction of a four tier banking system in the country: I tier: 3 or 4 International Banks; II tier: 8 to 10 National Banks; III tier Regional Banks; and IV tier: Rural Banks. The Narasimham Committee (1991) on financial reforms proposed for esta...
What is the hierarchical structure of Goldman Sachs? ›
The structure of Goldman Sachs is best exemplified by its career advancement process. Recruits start as Analysts and are then promoted to Associate, Executive Director/Vice President, and occasionally, Managing Director.
What is the highest position in an investment bank? ›
Managing Director
The Managing Director sits at the highest level of the investment bank hierarchy, and he/she is responsible for the profitability of the bank.
What is the structure and function of an investment bank? ›
An investment bank is a financial institution that raises capital, trades in financial markets, manages IPOs and takeover bids and manages mergers and acquisitions of large companies. They do not have a large branch network throughout the country but a few huge offices in large financial centres.
