From intern to MD: Investment banking career & salary progression explained

1. Salary & career progression overview
2. Step-by-step career progression
   • Summer Analyst (Intern)
   • Analyst
   • Associate
   • Vice President (VP)
   • Director and Managing Director (MD)
3. Where to find internships

Salary & career progression overview

Here's what you can expect if you become an investment banker and decide to stick it out to the end! 

All salary information is from Selby Jennings' Investment Banking Salary Guide.

• The lower bounds are the lowest salaries at boutique banks and upper bounds are the highest salaries at bulge bracket banks.
• The table above doesn't include bonuses from the guide, which can be anywhere from 30% to 200% of the base salaries shown above. 
• Actual MD salaries will vary depending on how much business they bring in. According to the Wall Street Journal, "Managing directors ... make an average of between $1 million and $2 million most years."

While it's good to look ahead, keep in mind that banking is an intense career and anecdotally, most analysts burn out before they're promoted to associates.

Step-by-step career progression

Summer Analyst (intern)

As a summer analyst, you won't just shadow more senior bankers. You'd get to do bits and pieces of work that actual analysts do. These include:

• Tasks that aren't too difficult or urgent but still contribute to a real project – for example, you'd get to tweak a part of a model that an analyst is working on.
• Networking – networking doesn't end when you get the internship. how you get the internship and how you secure a return offer too.
• Training – generally one full week.

Investment banking internships are like a baptism by fire. They give you a real taste of the intensity of the banking life – and you'll need to grind hard to prove your worth so you get hired.

On the bright side, you do get staffed on real deals (M&A's and IPOs). If you're lucky, you might even get to see one through!

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

Analyst

Analysts are entry-level bankers fresh out of undergrad. The majority of analysts are summer analysts who received return offers.

However, it's also possible to apply directly to the full-time role and you can also become an analyst by applying for an off-cycle analyst role – these open up because analysts often drop out part way through.

As an analyst, you'll report to an associate and:

• Support your team in serving clients. For example, if they want to buy a company, you'd research a list of companies for them to buy. If they want to sell their company, you'd make a model to estimate how much the company is worth and make marketing materials to pitch them to potential buyers. 
• Support your team in general. You won't be buying coffee for people, but you'd help set up meetings with clients, coordinate group happy hours, and take care of other administrative tasks that fall on you as the most junior member of the team.

Your role will be behind-the-scenes in that you generally won't meet directly with clients, and any client-facing work you do will go through multiple rounds of reviews. 

See: Junior investment bankers share what they actually do – and why their hours are so long

Associate

After two years as an associate, you'll be promoted to an associate role. This is also the level MBA graduates enter the firm.

You're still a junior banker at this point, but you will do less grunt work and more managerial work. This means you'll review the work of the analysts under you and attend lots of meetings. We go into this in more detail here.

You'll generally stay at this level for three years.

Vice President (VP)

While "VP" might sound like a high-level role, it's really a mid-level role between junior bankers (analysts and associates) and senior bankers (directors and managing directors).

As a VP, your main job is to figure out how to translate higher-level goals set by senior bankers into concrete work for junior bankers. 

As a VP, you're not doing actual work anymore. Instead, you're telling people what to do. As an associate, I wait for VPs to come up with ideas and assign them to me to work on.

– Investment banking associate @ JP Morgan

You also check any work from analysts and associates before sending them up the chain of command.

In your evolution from junior to senior banker, you'll also start interacting with clients more in an actual "advisory" role. To get a better idea of this, let's say a client comes to your team to sell their business.

• An analyst or associate might meet with the client for information-gathering purposes – i.e. they would ask a client about their company's financials to better pitch it to buyers. You might also come up with a list of potential buyers.
• As a VP, you'd now have enough experience to advise the client on what buyers make the most sense. You'd walk them through the benefits of each buyer and point out different considerations. In other words, you start building real relationships with clients!

VPs are generally promoted to the next level in three years, though this promotion depends more heavily on their performance than previous promotions. So a particularly strong VP may be promoted in two years while a weaker one might take four years. 

Meanwhile, some people choose to stay at the VP level forever. It's arguably the most "enjoyable" level in the investment banking hierarchy as you're not so senior that you're constantly under pressure to bring in business – yet you're senior enough to say "no" to things and have more control over your schedule.

As a VP, you could decide to work from home if you wanted to. But as an associate, if someone tells me to come to the office and I'm at home, that could be a problem. 

As a VP, you also have greater discretion over when you do things. Nobody is breathing over your back, being like "You need to get this done now." And even if something does come up, you can usually tell the MD something like "I'm not going to get to this until tomorrow." So if you decide to leave at 5 pm, you'll be able to do that.

– Investment banking associate @ JP Morgan

Director and Managing Director (MD)

Above VP, you're generally some kind of director. Some firms just have Managing Directors. However, many have both directors and managing directors. In these firms, the entry-level director might be called a "Director," "Executive Director," "Principal," or "Senior VP."

There's not a huge difference between Executive Directors (EDs) and Managing Directors (MDs) besides experience.

Some very complicated deals involving high-profile clients benefit from having very experienced people, so they might have 2 EDs and 2 MDs. So you're really doing a lot of the same stuff but an ED will still need the support of an MD. 

– Investment banking associate @ JP Morgan

If a VP's job is to manage relationships with clients, a director's job is to bring in new ones. This means lots of meetings with potential clients – UBS, for instance, once asked its senior bankers to have 300 meetings per year. 

I try never to turn down client meetings. Because of this, there are often days where I meet 10+ clients — which usually means no lunch and 12+ hour days. 

– #Day In The Life | Managing Director of Investment Banking

The "standard" timeframe for promotion from director to managing director is 2-3 years, but it really depends on how good a director is at bringing in business. 

Where to find internships

We hope this gives you a better idea of what a career in investment banking looks like. If you're still on the hunt for a promising opportunity, check out our vast selection of internships!