A low-level analyst working in an investment bank

A low-level analyst working in an investment bank is not an employee, but more of an employee. In the United States, the wages of investment bank and commercial or retail bank workers are high, and the "taxpayers" we can see at a Shinhan Bank branch are called "Teller" or "Relationship Manager." Branch employees can apply only after graduating from high school, and they get paid part-time, which is relatively low. Retail bank employees in Korea are relatively highly educated and have very high wages.

An analyst working for a Wall Street Investment Bank (IB) would need to know the main source of income for an investment bank to know what it does, usually through a job called Advisory & Financing to generate sales.

Advisory refers to the supervision of a company when it is newly listed, or consultation when one company merges with another. Usually, a fee is set by multiplying the contract size of the supervision or advisory by a certain percentage. For example, if an investment bank is in charge of listing a software company A on NASDAQ, it takes 1% of the equity (capital) flowing through the new listing as a fee. If Company A raised $10 billion through a new listing at a $100 billion valuation, it would be $100 million (about $133 billion), 1% of the $10 billion, as a fee.

Financing refers mainly to acquisition financing, for example, when Elon Musk took over Twitter, it was financed by LBO (borrowing buyout). Interest rates and terms of repayment vary greatly from company to company or contract, but it's generally a profitable sector. It's usually offered like an advisory service and a bundle.

With potential clients, managing directors (MDs) usually send a summary of a customer's valuation measurements and other relevant information, such as "Teaser" signs. Then, when potential clients are interested, they buy them lunch, play golf, pile up rapport, and when the time comes, they get a deal. That's why they call investment bank MDs "rainmakers," meaning they make money for the company.

Because the content and expertise of this "teaser" are so important, MDs usually ask VP (Vice President), Associate, and Analyst underneath them to create a teaser that contains specific information. Financial modeling is the main task of analysts at the very end. Because the scope of financial modeling is so wide that it is impossible to draw a single conclusion, but it is mainly a method of calculating a company's value using a cash discount model. It is a task to reasonably estimate future growth rate, profit rate, etc., as well as existing data. The logic and basis for the company's value calculation must be very solid, so it is a very time-consuming task.

The problem is that you have to build 100 teasers and reach out to 100 potential customers for one deal, and not all potential customers need immediate listing, mergers, acquisitions, finance, and so on, and so on, even if they need it, they're going to choose from a number of different conditions.

After all, an investment bank analyst can think of it as a person who collects data and works on Excel. It is a shuttle that makes data ordered by MD, and even if there is no immediate work, you don't know when and how the deal will proceed, so you have to always be on standby at work and submit data within the deadline required by MD (You also have to be inspected by Associates and VPs), so when work comes, you often have to work all night long. Financial modeling or sheet production does not get faster linearly by multiple people, so there is a limit to lowering working hours due to staffing.

I wanted to say that 99% of what Wall Street analysts do is just Excel oldies that don't lead to actual contracts, as I suddenly see posts claiming that working 80 hours a week will increase productivity and innovate like Wall Street analysts do. Of course, there may be limited areas where productivity and innovation increase nonlinearly as working hours increase, but at least I think it's an inappropriate metaphor because the financial industry is not a field that produces something or brings innovation to society.

Rather, finance is the best field for the type of "academic idiots who think they're smart" to engage in, so I think it's a social benefit, and I'll replace the implications for this with a post to link to the comments.