Now Citi will promote even its moderately good analysts to associate after two years
How long will it take you to progress from analyst to associate in an investment banking team? This depends upon how good you are and where you work.
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If you work for Citi, you will now be lucky indeed. Bloomberg reports that Citi is shortening the length of its analyst program to two years, after which all analysts will be transformed into beautiful associates.
Bloomberg says Citi's analyst program previously ran for three years. David Friedland, co-head of North America investment banking, told Bloombeg the truncation of the three year program will bring Citi in line with some competitors. It will also enable Citi analysts to earn higher pay, sooner. Bloomberg suggests the change will discourage these analysts from leaving for private equity and notes that it will now be possible to go from analyst to vice president (VP) at Citi within the blink of five and a half years.
All of this sounds appealing, but it's also worth noting that none of this is entirely new. We reported in 2019 that Citi, UBS, Goldman Sachs and Morgan Stanley were promoting analysts to associates after two years. At that point they'd already been doing it for a while. Goldman Sachs, for example, began promoting analysts to associate in 2016.
So what's new? Citi declined to comment, but we understand from senior insiders at the bank that the key change is the breadth of the two year program at Citi. Previously, only the very best analysts were promoted to associate after two years. Now, it seems that all Citi analysts will be.
UBS is thought to have a similar approach. So is Goldman Sachs.
First year analysts at all banks earn around $160k in total compensation. Third year analysts earn around $200k. However, first year associates earn around $276k, so Citi's third year analysts may effectively receive a $76k pay rise.
Curiously, the promotions come at a moment in time when private equity firms are struggling to exit investments, suggesting competition for junior talent may be less fierce than in the past. They also come as AI is being used to do the jobs of junior bankers, suggesting that fewer and higher calibre juniors may be the way forward.
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