Equity Research Analyst (1 Viewer)

[Drifting95]

Hey guys,

Does anyone have a general idea of the opportunities to get this type of role straight out of uni, is it as competitive as the conventional IB roles?

What are the hours like? I have done a bit of background research on it and have found its about 50-70hrs per week, does this sound about right?

Salary, what is the typical all in salary for an someone straight out of uni and then in the following few years?

Thanks

 

[seremify007]

1. Yes it's very competitive; not that many positions on offer and tend to be focussed on specific industry sectors. Having background or other experience in a field definitely is valuable.

2. Hours aren't as bad as IB from what I've heard. Typically get in early for pre-market briefings and to get research papers out (7/7:30am?) but you are staying until at least 6 or 7pm. May need to do additional research outside office hours but largely your work is driven by the market hours.

This is based on vague recollection from speaking with a mate who has been in equities research... who also happens to be on BoS from time to time

3. Grad salary was 100k a few years ago but I doubt it's gone up much given the consolidation in the industry and efficiency drives. Bonus on the other hand is the variable.

 

[Chronost]

Hey this was also one of my most researched jobs. I found this to be a better overall job then sales IB role for me(It still seems like an awesome job,but i decided to move forward for accounting). The hours are better then other IB roles,it's around the hours you've stated but can get to even more on certain periods I've heard. Unfortunately the spots available are even less then sales which means it's actually just as competitve to get in like any other role in IB. Salaries are around 70-80K plus lower bonuses then sales. It generally follows salaries(lower bonuses) of IB Sales at a discount,but the hiearchy is narrower and not as many chances to advance(therefore salaries are actually capped after many years unless you become a baller and manage to stock pick good companies or a booming area).Bonuses are also linked to how well your team goes. Either way it's not a easier way to get into IB,and even though you also do things like modeling and pitch books you do spend alot more time researching for the guys,which in my opinion sounds better then trying to pitch sales.

That's my 2 cents, i wouldn't be surprised if people corrected me.

Edit: seems like Seremify beat me to it , listen to him.

 

[seremify007]

At the end of the day, the further away you are from the client who actually pays, the less attractive the packages seem to be. A research analyst, whilst important in the scheme of things, isn't quite back office but not quite front of house either in terms of being client facing.

ps. I should emphasise that the $100k grad salary was for one of the larger international banks which operates in the Australian market.

 

[ilikecats]

At the end of the day, the further away you are from the client who actually pays, the less attractive the packages seem to be. A research analyst, whilst important in the scheme of things, isn't quite back office but not quite front of house either in terms of being client facing.

I still don't understand why people want to deal with clients face to face expect for the money.
Personally, I'd do anything to avoid the obnoxious world that can be clients. (We had some horrible clients this week. They always seem to be angry at the same time!)

 

[seremify007]

At the end of the day, the client facing person is a salesperson. No sales = no money for anyone else really.

I always tell people every business whether it be a widget manufacturer, utility provider, audit firm or a bank, can be broken down into two distinct core activities/components- manufacturing and sales/distribution.

Sales/distribution is what funds the rest of the operation even though they are only as good as what the manufacturers are able to produce.

 

[Drifting95]

1. Yes it's very competitive; not that many positions on offer and tend to be focussed on specific industry sectors. Having background or other experience in a field definitely is valuable.

2. Hours aren't as bad as IB from what I've heard. Typically get in early for pre-market briefings and to get research papers out (7/7:30am?) but you are staying until at least 6 or 7pm. May need to do additional research outside office hours but largely your work is driven by the market hours.

This is based on vague recollection from speaking with a mate who has been in equities research... who also happens to be on BoS from time to time

3. Grad salary was 100k a few years ago but I doubt it's gone up much given the consolidation in the industry and efficiency drives. Bonus on the other hand is the variable.

Could you please give their name? I would like to inbox them directly if possible.

100k seems a bit high, are you referring to pre GFC? I would be over the moon if it was, but unlike most on here i don't realistically expect to be earning 100k + straight out of uni.

Hey this was also one of my most researched jobs. I found this to be a better overall job then sales IB role for me(It still seems like an awesome job,but i decided to move forward for accounting). The hours are better then other IB roles,it's around the hours you've stated but can get to even more on certain periods I've heard. Unfortunately the spots available are even less then sales which means it's actually just as competitve to get in like any other role in IB. Salaries are around 70-80K plus lower bonuses then sales. It generally follows salaries(lower bonuses) of IB Sales at a discount,but the hiearchy is narrower and not as many chances to advance(therefore salaries are actually capped after many years unless you become a baller and manage to stock pick good companies or a booming area).Bonuses are also linked to how well your team goes. Either way it's not a easier way to get into IB,and even though you also do things like modeling and pitch books you do spend alot more time researching for the guys,which in my opinion sounds better then trying to pitch sales.

That's my 2 cents, i wouldn't be surprised if people corrected me.

Edit: seems like Seremify beat me to it , listen to him.

1. If the hours are more in earnings season (which i expect) then i think i could live with it, its just doing it on a continual basis which turned me off the usual M&A etc.

2. 70-80k seems more realistic, is this base only? What is the structure like? Is it analyst, senior analyst, associate.... like IB?

3. Reason i'm considering this is because i don't want to do IB lol, so that's not an issue. Currently stuck between focusing on my initial plan of accounting or this, i will try and get a cadetship and then see if i still want to get my CA.

 

[seremify007]

Could you please give their name? I would like to inbox them directly if possible.

100k seems a bit high, are you referring to pre GFC? I would be over the moon if it was, but unlike most on here i don't realistically expect to be earning 100k + straight out of uni.

No. I'll ask him to have a look at this thread if he has time but presumably he doesn't really want everyone knowing what he does/etc otherwise he'll get spammed by the masses.

And to provide context he was a cadet at a Big 4 firm in financial services audit for a couple of years. The equities analyst role was a graduate position offered to him after he did the internship in that area from memory.

It wasn't pre-GFC though; it was around 2009 or so? He recently moved to another large international bank though.

 

[seremify007]

Here's what my mate sent me to post:

I'm going to keep this brief and systematic
- Workload - Depends on your lead analyst (who will be the single most important person in your life). 50 hours sounds way too little, think moreso 60-70 as a base point with late hours on top responding to client requests, writing up market events (company results, etc). My general advice is write off Mon-Fri completely but unless you're unlucky you should have your weekend free. Hours have gotten worse in recent years due to headcount reductions & more attention being given to smaller clients who 5 years ago you probably wouldnt bother picking up the phone for. Hours start early, anywhere from 6-7:45.
- Work style - Writing reports is probably 1/3 of the job or less. Different analysts make names for themselves doing different things (but all do a mixture of things) - company report/analysis, industry knowledge/contacts, corporate access. There's a lot more salesmanship involved than most outsiders think. I would go so far as saying it's one of the most client-intensive roles you can work in besides an actual sales role. Also, in contrast to sales roles (where they pick up the phone for 2minutes), in research you are expected to go into greater depth and can usually end up having long conversations - think up to an hour or more for important clients. You could well be expected to talk to clients on the phone in your first year (contrast to IBD where you won't be allowed near a client).
- Pay - Research generally falls within global markets so you're paid identically to the other guys for at least 2-3 years. Beyond that, bonuses are lower than IBD and obviously tied to Equities performance. Long long term, Bank & Resources analysts earn the most because their stocks generally have the most trade activity/market cap. Nothing for you to worry about now though.
- Herp derp research is a cost centre - It's really not anymore than Equity Sales it. Clients assign brokerage to the bank in a lump and then carve out which portions should go to which team, e.g. a typical split is 10% execution, 10-20% sales, 70-80% research. Research is crucial to any bank worth their salt. Lead analysts get their biographies in every important pitchbook and all the eq sales guys actually do is call clients up all day and summarise Research views to them - then they go to lunch at 1pm and often don't come back.


Biggest downsides
- No 'easy days'. Unlike IBD where analysts can often spend all day watching paint dry, you're unlikely to be able to slack off in research. You'll spend your morning getting up to date with news, all day updating databases and completing client requests, if there's no urgent market news to write-up then any top-rated analyst would undoutedbly have you working on a project like an industry piece or performing channel checks. You stay up until 2am arguing with compliance about publishing a report? Tough. News-wrap still due 7am next morning.
- Last-minute client requests at 6-7pm just when you thought you'd be able to go home for the night. Most likely they'll be coming in from clients in Asia who don't care what timezone it is in Australia.
- "NOTICE RECEIVED" on IRESS
Biggest upsides
- Relatively early recognition, your name on research reports (which can end up getting you quoted on the AFR, media... which interestingly most leads actually don't care much for)
- Genuinely interesting to be so on top of market news & getting strong industry knowledge. There's monkey work, but you feel like you're learning a lot, fast.
- Great exit ops. You will have sound financial modelling skills, client relationship skills and in-depth industry knowledge of your sectors. After a few years exp you can exit into IBD, Sales, Buy-side, Corporates ...
Housekeeping:
- In research, Associate title comes before Analyst title
- Very little hierarchy. Titles don't mean all that much. The hierarchy isn't as important as in IBD because you work for your lead analyst and your lead alone. In IBD you'll often be assigned work from seniors who arent in your direct team, so pulling rank is more important
- Entry opps: The major firms generally only take 1-2 research grads annually, so there are far fewer places than IBD. However, there are less people directly applying for Research, so being very specific on your cover letter is already a leg up
- "Parcel culture - If your lead is poached by a rival bank, often he will take his minion with him."

 

[Drifting95]

Here's what my mate sent me to post:

Thanks for the info.

 

[Chronost]

Here's what my mate sent me to post:

Thanks! That was great, totally fixed some misconceptions I put on this thread.

 

[Kurby]

What some of my elders tell me (some whom have become pretty rich from corporate jobs). Money isn't everything. When they were young, they too pursued money, but when they got older and had enough or too much (which sounds silly, but I guess they were very financially secure), they realised they should of done a lot more when they were young instead of working tirelessly earning lots and lots of money. They take holidays more frequently now and do more (though they are still working), but they aren't as active as they were when they were younger, so there are limits.

Anyway, consider economic/research analyst! Depending on the organisation, hours are less, but I guess lower pay than IB/equity jobs obviously, and if you are a media whore, you could get quoted just the same in the AFR, fairfax. Over the long run with experience, the salary I guess isn't that bad, but no where near IBS + its quite flexible moving into different industries. If you are in pure economics, then you get the same exposure to daily news and events (and probably write about it too).
Plus a lot of jobs are in the government, so its cushy hours and pay! ha!

 

[Ricktatorship]

Having background or other experience in a field definitely is valuable.

Can you elaborate on this please? Say for example you wanted to specialise in energy, what would you need to do that?

 

[seremify007]

Can you elaborate on this please? Say for example you wanted to specialise in energy, what would you need to do that?

As in, some sort of industry experience/expertise whether it's through studies or prior work experience would be beneficial. After all, if you're applying for a role to be an analyst/expert in a field, doesn't it make sense that if you have some prior knowledge or interest in the area, it would be helpful? e.g. someone who had a mining engineering background would be a lot better at understanding/analysing/interpreting the results of mining companies than a pure Commerce student I'd imagine.

 

[Vagabond]

As in, some sort of industry experience/expertise whether it's through studies or prior work experience would be beneficial. After all, if you're applying for a role to be an analyst/expert in a field, doesn't it make sense that if you have some prior knowledge or interest in the area, it would be helpful? e.g. someone who had a mining engineering background would be a lot better at understanding/analysing/interpreting the results of mining companies than a pure Commerce student I'd imagine.

Only relevant for senior/lateral hires

When going for an intern or grad position chances are even the company won't know what coverage they're going to give you until much closer to your start date (how are they going to know where they are going to need you 6 months - 1 year ahead of time?)

They're just looking for bright people and just as importantly people that they think they'd get along with spending the majority of their time with

Edit: Obviously work experience is important insofar that your CV needs to be more than a piece of paper with your university marks on it

 

[Drifting95]

What some of my elders tell me (some whom have become pretty rich from corporate jobs). Money isn't everything. When they were young, they too pursued money, but when they got older and had enough or too much (which sounds silly, but I guess they were very financially secure), they realised they should of done a lot more when they were young instead of working tirelessly earning lots and lots of money. They take holidays more frequently now and do more (though they are still working), but they aren't as active as they were when they were younger, so there are limits.

Anyway, consider economic/research analyst! Depending on the organisation, hours are less, but I guess lower pay than IB/equity jobs obviously, and if you are a media whore, you could get quoted just the same in the AFR, fairfax. Over the long run with experience, the salary I guess isn't that bad, but no where near IBS + its quite flexible moving into different industries. If you are in pure economics, then you get the same exposure to daily news and events (and probably write about it too).
Plus a lot of jobs are in the government, so its cushy hours and pay! ha!

I need some good start up capital for my investment plans, i don't want to be slaving away in the rat race for my whole life. Don't get me wrong, i do think i will enjoy the role, but money is also an important factor for my circumstances and goals. Thank you for the advice though, i understand where you're coming from.

 

[seremify007]

When going for an intern or grad position chances are even the company won't know what coverage they're going to give you until much closer to your start date (how are they going to know where they are going to need you 6 months - 1 year ahead of time?)

They're just looking for bright people and just as importantly people that they think they'd get along with spending the majority of their time with

Good point. I think I'm thinking more from my perspective rather than from a intern/graduate perspective.

 

[Omnidragon]

To people in uni, M&A and say research might seem quite similar. Once you're in for 4-5 years, they are quite different career paths. I wouldn't base my decision on hours alone. Think about where you want to be in 5 years.

The skills you walk away with (and what people hire you on) are also quite different.

 

[Drifting95]

To people in uni, M&A and say research might seem quite similar. Once you're in for 4-5 years, they are quite different career paths. I wouldn't base my decision on hours alone. Think about where you want to be in 5 years.

The skills you walk away with (and what people hire you on) are also quite different.

I want to be working on my property-soon-to-be-hotel portfolio. Na seriously, i want to get into development once i have some start up capital and some decent passive income.

 

[Omnidragon]

I want to be working on my property-soon-to-be-hotel portfolio. Na seriously, i want to get into development once i have some start up capital and some decent passive income.

Hope you follow the Sydney and Melbourne metropolitan markets with interest then. Because it just became that much harder to get in to it.