The End Of Big Firms' Junior Analyst Programs May Open Door For Growth In RIA Industry

Friday, September 14, 2012 08:14
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The End Of Big Firms' Junior Analyst Programs May Open Door For Growth In RIA Industry

Tags: Advisor businesses | enterprise value | registered investment advisors

As if it were not difficult enough for college graduates to find good jobs, Goldman Sachs has ended its program that offered two-year contracts to young analysts just out of school.

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Junior investment banking and investment management analysts also will not receive any bonuses for having completed the program. It’s a program that has been in place for 25 years and it’s been viewed as a ladder to Wall Street success.
 
Goldman is not the only firm reconsidering its junior analyst program. Typical class size for the program at any firm is approximately 100 participants. Banks and firms are reevaluating the return garnered from the programs, especially since many graduates of the programs do not stay with the sponsoring firms after the initial two years.
 
Areas where analysts have remained after the two years are sales and trading and investment research. Two-year contracts in those divisions will remain intact.
 
Private equity firms have become more active in recruiting junior analysts away from Goldman since the program is a magnet for top graduates seeking a Wall Street career path.
 
The firms used to wait until after the two years to begin recruiting but lately have accelerated their efforts to only six months into the junior analyst program.
 
This opens the door to RIA firms who wish to attract smart young graduates who can inject new blood into firms that may be contemplating succession plans. If the RIA industry is to continue making an impact, this might be one way to boost growth.

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