Analyst or Associate?

[jerrycc]

Hi Guys,

Suppose I can finish a MFE and an econ PhD in the same month of 2012, am I supposed to apply for associate or analyst level of a given job? I mean, could the econ phd be considered by the employers a few years of work experience?

Your knowledge will help me to make right decisions.

 

[bansalmohit]

With phd you should be able to begin as Associate

 

[Ken Abbott]

My firm would probably bring someone with a Ph.D in as an Associate.

 

[jerrycc]

Thanks,Ken and Bansal. I will take the MFE offer and get both done ASAP.

 

[Forza]

Hey everyone,

Since we are on that topic, I have a MBA from a regular state school with couple years of military experience, and now will be attending the MSOR program at Columbia. Would I be considered an analyst or associate? I plan on going into AM or S/T. Thanks!

 

[alain]

Hey everyone,

Since we are on that topic, I have a MBA from a regular state school with couple years of military experience, and now will be attending the MSOR program at Columbia. Would I be considered an analyst or associate? I plan on going into AM or S/T. Thanks!

apply for jobs, if you get an offer make sure is for associate. That's it. Employers will always look to pay you less. It is up to you.

 

[Forza]

Got it, thanks alain!

 

[alain]

BTW, for a lot of people the title is meaningles (it is for me). I don't want to sound shallow but some like to have a big paycheck regardless of the title. I don't know if you are in that category.

Would you rather be an associate and be paid like an analyst or an analyst and paid like a VP? Maybe that gives you a perspective.

 

[jerrycc]

alain, thanks. I was just wondering whether I was eligible to apply for associate positions which usually are paid higher than analysts within a given firm.

 

[Forza]

Hey alain,

Good point, I really don't care about the title, and more about the responsibilities and pay scale range. I've noticed some firms call a lot of their folks analysts, but I am sure there is a junior/senior break down to determine responsibilities, pay, etc. Thanks again alain.

 

[Andy Nguyen]

alain, thanks. I thought the size of paycheck was proportional to the title or the level of your position...

That may be true in the investment banking arm of the bank. It has very little meaning on the kind of jobs most people here will do. Your paycheck is decided by your group function, P&L share, responsibility. If you are VP on a losing desk, you make less than a first year analyst on a desk that is printing money.

Some people got fooled into this title race and get a job because it has Associate/VP title with no regard to how it is compensated.
Then again, if you are after brand name, title, salary size, this is an industry that you will always feel overworked and underappreciated/underpaid.

 

[Forza]

Andy,

As always, great points. Based on your experience and what you have seen, what is usually the compensation structure for someone going into the following - Risk Management, Sales/Trading, and Quant software development?

 

[jerrycc]

That may be true in the investment banking arm of the bank. It has very little meaning on the kind of jobs most people here will do. Your paycheck is decided by your group function, P&L share, responsibility. If you are VP on a losing desk, you make less than a first year analyst on a desk that is printing money.

Some people got fooled into this title race and get a job because it has Associate/VP title with no regard to how it is compensated.
Then again, if you are after brand name, title, salary size, this is an industry that you will always feel overworked and underappreciated/underpaid.

yes, thanks andy. It makes lots of sense to me. I do not know much about the industry actually, and was just wondering whether the phd might provide me a higher starting point.

 

[myampol]

Also note that many firms have programs under which "Analysts" are hired for a limited term, often two years, following which most are expected to leave to pursue an MBA (although in some cases, individuals are asked to stay on and/or promoted to the "Associate" level.) I think, however, that such career paths are more prevalent in the "paper-shuffling" divisions (e.g., corporate finance, mergers and acquisitions, etc.) which are probably not the intended destinations of the readership of this forum.

Be aware that as an "Associate" you would (initially) be paid better than as an analyst, but more would be expected of you. Also it is likely that many of your associate-level colleagues may already have a number of years of work experience, which means you may have a steeper learning curve in order to "compete" with them.

A number of years ago (pre-crisis), an acquaintance asked me for advice. Age 23, completing a Masters in Financial Mathematics directly out of undergrad, zero work experience (not even an internship), this person was offered an Analyst position at a "Very Prestigious Firm" and an Associate position at a "Less Prestigious Firm."

Of course, the Associate position offered a substantially larger compensation package, but the analyst position was on a (then-)high profile desk at a firm which offered a more substantial training program, including several global rotations.

Ultimately the decision was made to accept the Analyst position because it would be a better learning opportunity and better long-term career move, despite the lower starting compensation and title.

It is important to try to understand your personal short-run vs. long-run goals and to evaluate prospective opportunities in light of such. Not always an easy thing to do.

 

[Ken Abbott]

There are two important points to be made here:

1) While it's true that titles often don't mean much, benefits count and are a form of compensation. Analysts are typically not "officers" and usually get two weeks of vacation. Associates usually (but not always) are officers and get a much better benefits package.

2) Coming in at a too-junior title can set you back in career progression. When positions are staffed, they are usually described in terms like "Analyst-level", "VP-level", etc. You may be qualified for a job in terms of skills but could be ignored because of having a lower-than-necessary title. You should talk to the hiring manager about appropriate title.

 

[alain]

There are two important points to be made here:

1) While it's true that titles often don't mean much, benefits count and are a form of compensation. Analysts are typically not "officers" and usually get two weeks of vacation. Associates usually (but not always) are officers and get a much better benefits package.

2) Coming in at a too-junior title can set you back in career progression. When positions are staffed, they are usually described in terms like "Analyst-level", "VP-level", etc. You may be qualified for a job in terms of skills but could be ignored because of having a lower-than-necessary title. You should talk to the hiring manager about appropriate title.

These points are valid for big organizations (i.e. big banks). In my personal experience titles get blurred for small companies with a flatter structure.

 

[Joy Pathak]

On the buy-side at hedge funds especially I have noticed that the structure is reverse. Analyst is higher than Associate.

 

[financeguy]

I think it's important that you evaluate this on an individual firm basis. It's sometimes true that an analyst on a desk printing money will make more than an associate on a losing desk - but not always. That comes down to who pays your salary. It's very common that if you're in an analyst or associate program at a bank, your salary (bonus included) comes out of central costs (i.e. you get paid by HR) and not out of your desk's budget. In this case, the associate at a crappy desk will almost surely earn more than the analyst at a bread-winning desk. What is true is that in a few years when both are promoted out of official programs, the guy who started out as an analyst on the better desk will be making more money. Another thing to look out for is whether or not being part of the analyst or associate program means that you'll very likely be asked to leave after 2-3 years. Most of the time in trading, they'll want to keep you on for the long haul - otherwise why bother training you? But that's not always the case. At the end of the day, associate is a higher rank, but both are entry level titles. I think what's most important is that you get yourself in with a desk that is good at what it does, makes money, and has good people, regardless of whether they make you analyst or associate. Ultimately your ability and timeline to rise up in the ranks and get paid won't depend on whether you've started as analyst or associate. So if you're choosing between two different jobs, don't let the difference between analyst or associate be the deciding factor. But of course if you feel you have a good argument, definitely try to negotiate into starting as an associate just because really why not. One last thing to look out for is if the bank's HR has a lot of red tape about promotions. I've heard of some banks having rules like you must spend 3 years as an analyst and then 3 years as an associate before you can move up to any non entry level rank. That would be really annoying, especially if HR also has some sort of standardized way of paying those ranks. After 4-5 years you do want to have the ability to get paid in excess of some bucketed amount. So I guess my opinion is it just really depends on the place you're looking at and that there's no blanket statement that will cover it.