Difference Between Analyst and Associate
Analyst and Associate are job titles used mainly in consulting companies and investment banking firms and are the first two tiers of the organization followed by Associate Vice President (AVP), Vice President (VP), Senior Vice President and Managing Director. Both these job positions may sound similar but the education, job requirement, and salary structure are different.
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- Both job positions can be entry-level but the position of an associate is considered to be one position higher than the analyst. These designations are used in all major investment banks like JPMorgan, Citi, HSBC, Credit Suisse, and KPO’s which help these investment banks follow a similar designation hierarchy.
- Also note, that these terms may also be used interchangeably by different organizations. For example, the Boston Consulting group entry-level employees are called associates, and the second tier employees are called consultants. This terminology may be confusing to understand. however, it is more important to understand the job requirement rather than the terminology.
- There are often clashes between employees working together with these two roles. An analyst has to perform tasks assigned to him by the associate. If the associate is entry-level in the bank and the analyst is experienced then this creates a rift between the two since the associate is still learning and assigning tasks to the analyst, the nature of the tasks may be intimidating and time-consuming for an experienced analyst.
Analyst vs Associate Infographics
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Key Roles and Job Description of an Analyst
- Investment Banking analystInvestment Banking AnalystInvestment Banking Analyst works with investment banking team and expertise in the area of Accounting, Financial Modeling, Project financing, Project Valuation, and Financial statement Analysis. These analyst has deep knowledge in Excel and they are good at VBA to analyze the market data and financial modeling. The analytic work consists of building a financial model for different projects like Infrastructure projects (i.e. Power projects, real estate, etc.).read more spends most of the time analyzing transactions, past data and creating presentations and offers advice to bankers. He also performs other administrative duties like arranging calls and meetings with clients.
- Mainly the project analyst works for and their duties depend on the organization they work for and the projects they are involved in. The analyst typically has to work for extended hours and can end up to 100 hours per week.
- Main responsibilities include the assessment of transactions and financial research. Keeping with the trends such as the performance of stocks and bonds as well as the trend in the markets. An analyst might not be involved in the decision-making process but they do provide all the data and research required for making the decision.
- An analyst is expected to have knowledge of different databases and should also be comfortable with Excel, Powerpoint and other software like Bloomberg, Factset, and Reuters. An analyst is also expected to track companies and also generate daily newsletters, keep to the schedules. At times they may also require to write macros in VBA. Core skills required are research, analyzing and interpreting data. A good analyst always observes and thinks.
Key Roles and Job Description of an Associate
- The role of an Investment Banking Associate is of a Mid-level operations role with exposure and experience in high-end finance. It involves interacting with various senior investment professionals on a daily basis. One of the vital responsibilities includes mentoring a team of analysts and reporting to an AVP.
- He is also responsible for checking the analyst’s work to ensure it is client-ready and serves as a point of contact for clients. The job role is not limited to a sector and a single asset classAsset ClassAssets are classified into various classes based on their type, purpose, or the basis of return or markets. Fixed assets, equity (equity investments, equity-linked savings schemes), real estate, commodities (gold, silver, bronze), cash and cash equivalents, derivatives (equity, bonds, debt), and alternative investments such as hedge funds and bitcoins are examples.read more.
- Key tasks include creating and building financial models in excelFinancial Models In ExcelFinancial modeling in Excel refers to a tool used for preparing the expected financial statements predicting the company's financial performance in a future period using the assumptions and historical performance information.read more and valuations. Conducting financial analysisFinancial AnalysisFinancial analysis is an analysis of finance-related projects/activities, company's financial statements (balance sheet, income statement, and notes to accounts) or financial ratios to evaluate the company's results, performance, and trends, which is useful for making significant decisions such as investment, project planning and financing activities.read more is also an important part of the job. Creating research and equity research reportsEquity Research ReportsAn equity research report is a document prepared by equity research analysts or financial brokers that focuses on a specific stock, industry, currency, commodity, or fixed-income instrument, as well as a geographic region or country. It includes recommendations on why to buy or sell that stock, as well as DCF modeling, relative valuations, and so on.read more and also performing a consequence analysis of the merger.
- The analyst program is an integral part of an associate recruiting strategy wherein an analyst is promoted on the associate level after completing three years.
Analyst vs Associate – Comparative Table
| Analyst | Associate |
|---|---|
| Analyst mainly has an entry-level post at the firm and are responsible for a small part of a big project. In some firms like McKinsey, analysts are not considered as permanent employees. After they spend three years in the firm Analyst are either promoted to an associate position or they leave the job to pursue higher education | Associates are considered as permanent employees and are responsible for managing the team of analysts and are the leaders of the projects. |
| He requires a minimum of a bachelors degree to get in. Sometimes, even engineering degrees are accepted. There may be cases that an analyst is promoted to an associate position without an MBA | It is necessary for an Associate to have an MBA, mainly in finance. Sometimes, other degrees which are related to their experience and role are also accepted |
| Entry-level analysts usually receive INR 4,00,000 to INR 5,00,000.As the experience increases the hike in the salary also increases | Associates are usually paid around INR 10,00,000 per year along with a bonus component. This is twice as what an analyst receives. This highlights the stark contrast between them. |
| The analyst is expected to execute all the tasks like making presentations, creating financial modelsFinancial ModelsFinancial modeling refers to the use of excel-based models to reflect a company's projected financial performance. Such models represent the financial situation by taking into account risks and future assumptions, which are critical for making significant decisions in the future, such as raising capital or valuing a business, and interpreting their impact.read more, comparable comps and create IB pitch booksCreate IB Pitch BooksPitch Book is an information layout or presentation used by investment banks, business brokers, corporate firms, and others to provide potential investors with the firm's main attributes and valuation analysis, which helps them decide whether or not to invest in the client's business. A pitch book is also known as Confidential Information Memorandum, which is used by the firm's sales department to help them sell products and services to a client.read more | Associates, on the other hand, are involved in client interaction, understanding their requirements and help analysts execute their tasks |
| They perform tasks given by the Associate and are also responsible for administrative tasks. Mainly responsible for doing all the grunt work and making his associate look good | They run a project and assign tasks to the analyst. He plays a managerial role and provides an opportunity to handle a broad range of responsibilities and management tasks |
| They are promoted to the Associate level after three years or after getting an MBA | They are promoted to the position of an Associate Vice President after completing three or four years in a particular organization. It may also depend on the policies of the organization |
If one is interested in Investment Banking or Private EquityInvestment Banking Or Private EquityInvestment banking is the financial mechanism through which a person receives financial advisory services from the investment banker regarding the share capital. In contrast, private equity funds are investment funds that pool funds from different investors with high net worth to acquire stakes in different entities.read more which has a similar hierarchy, it is very helpful to start your career as an Analyst immediately after graduation and get hands-on experience after which an MBA or CFAMBA Or CFACFA focusses on imparting skills associated with Investment Management including Investment Analysis, Portfolio Strategy, Asset Allocation, and Corporate Finance. MBA focusses on overall Management Skills like Marketing, Operations, Finance, Human Resource Accounting, etc.read more may help in getting deep insides and help you start working as an Associate.
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