By: Natalie Johnson
Investment banking has trained its young talent the same way for generations: hand them a model, a comp set, a data room, and let repetition do the teaching. That system worked because the detailed work was also the curriculum. Now that heavy lifting is disappearing into software, the industry has not thought carefully about what happens to the curriculum. Steven H. Nigro, a veteran investment banker who has spent much of his career advising companies through transactions, sees the productivity story everyone is telling and a second story almost nobody is. AI will make junior bankers faster. Whether it makes them better is an open question, and the answer depends entirely on what senior bankers decide to do with the hours they just got back.
What The Apprenticeship Was Teaching
The analytical burden on analysts and associates has always been enormous: financial modeling, valuation work, industry research, due diligence, and transaction materials. Nigro does not romanticize it. Much of that work is repetitive and increasingly within reach of AI. But he makes a point that gets lost in the efficiency conversation, which is that the learning embedded in all that repetition was largely unintentional. Nobody sat a second-year associate down and taught them pattern recognition. It accumulated. “Young professionals learned the business by doing the work, often repeatedly,” he says. “They built models, analyzed companies, participated in due diligence, and observed how transactions evolved. Over time, they began to recognize patterns, understand commercial relationships, and develop the instincts that distinguish an experienced investment banker.”
Strip out the repetition, and you strip out the associate’s education and seasoning along with it. Nigro offers a practical example: an associate is asked to evaluate a letter of intent for the acquisition of an insurance brokerage. The associate turns to AI, which analyzes the proposed transaction, constructs a detailed financial model, evaluates the consideration structure, calculates the implied valuation, and identifies potential risks. The analysis is sophisticated, comprehensive, and mathematically accurate.
But therein lies the problem. It is AI that has performed the analysis, not the associate. The associate may have the answers, but has not necessarily developed the underlying knowledge or judgment to independently assess them. Does the proposed earnout appropriately allocate risk between buyer and seller? Are the EBITDA adjustments commercially defensible? Does the transaction structure align with the seller’s objectives? Are there provisions that could become contentious during negotiations? And perhaps most importantly, does the associate know what AI may have overlooked?
Historically, working through these questions, examining the assumptions, and wrestling with the implications was how young bankers developed their commercial instincts. The process itself was part of their education. AI can now deliver the finished product in minutes, but the associate may have bypassed the very intellectual exercise that would have taught them how to evaluate it.
Nigro’s framing of the risk is sharper than much of what is being said about AI in finance: “We could become extremely efficient at producing answers, while becoming less effective at developing people who know which questions to ask.”
Making Instinct Explainable
The solution is not to keep unnecessary work just because it helps people learn. Nigro’s position is that the educational value of the apprenticeship has to be kept while its inefficiency is cut away, and that requires senior bankers to do something they have historically avoided, which is explaining themselves. Experienced dealmakers exercise judgment constantly. They rarely narrate it. “Sometimes you look at a transaction and instinctively sense that something doesn’t make sense. It might be the valuation, the transaction structure, the buyer’s motivations, or even the personalities involved. That instinct is generally not arbitrary. It’s the product of accumulated experience.” The problem is that accumulated experience, left unspoken, is unteachable. It dies with the person holding it, or it moves at a glacial pace.
So the review process has to change shape. When a junior banker brings in an analysis, Nigro argues the senior response should not be a verdict. It should be an interrogation that runs in both directions. What assumptions are driving the recommendation? What might be missing? What would change the conclusion? And then the harder half, which is the senior banker laying out their own reasoning and the specific experiences that produced it. Even that is not sufficient on its own. Judgment needs consequences attached. Young bankers need room to form independent opinions, defend them, participate in real decisions, and then watch how those decisions play out. “You can teach someone how to analyze a transaction,” Nigro says, “but developing judgment requires teaching them how to spot the opportunities and issues.”
Mentorship Becomes The Job, Not The Favor
This lands as a genuine redefinition of what senior bankers are paid to do. The traditional role involved supervising analytical output, checking accuracy, and delegating out responsibility as juniors earned it. If technology handles much of the production, that supervisory function shrinks and something else has to fill the space. Nigro is direct about what: bringing junior bankers into strategic discussions earlier, explaining the rationale behind recommendations, and pulling them into the decision-making process. “Frankly, it is using the saved time to impart wisdom.” He goes further still, into territory that cuts against the grain of a hierarchical business. Juniors should be encouraged to disagree with their seniors, provided they can support the position. “Independent judgment doesn’t develop when someone is simply trying to anticipate what the managing director wants to hear.”
There is an uncomfortable implication buried in that, and Nigro says it plainly: being a successful dealmaker does not automatically make someone an effective teacher. Firms that have promoted exclusively on origination and execution may find their senior ranks poorly equipped for the work that now matters most. Nigro does not read any of this as a diminishment of experienced bankers. The opposite. As analytical capability becomes commoditized and universally accessible, the differentiators move to judgment, relationships, creativity, and the ability to navigate commercial situations that do not resolve neatly. His conclusion is less a prediction than a warning to anyone assuming the old pipeline will keep working on autopilot: “Senior bankers can no longer assume that judgment will develop organically over time. We have to become much more intentional about teaching it. AI won’t eliminate the investment banking apprenticeship. It will force us to redesign it.”
Follow Steven H. Nigro on LinkedIn for more insights on investment banking, transaction judgment, and developing the next generation of dealmakers.
