Joining a well ranked ER department still a sensible move these days?
Hey monkeys!
I had a ER summer internship at a BB in '12 and was offered a FT position recently (based in London).
I enjoyed the time there and could absolutely see myself doing the job for some years. Good people, good infrastructure. Also, I like the exit opps. However, reading recent stories about the 'future of ER' (Bloomberg, FT, WSJ, ...) makes my guts rebel quite a bit.
I don't expect to be paid like it's `05. Just want a stable environment in the mid-term (say 5 years) where people focus on their jobs rather than on rumors about lay offs, an on-average-60h-week, and reasonable pay bumps from time to time. During my internship things looked pretty much like this.
Do you think this will change for the worse (across banks)? Will an oversupply of laid off ER guys force the remaining analysts to pull longer hours (and generally worsen their bargaining position)? Iterating forward, will exit opps be worse/fewer in 5-10 years time?
Putting it another way: Do you think joining a well ranked ER department is still a sensible move these days (seeing that I could as well do a Masters or take up a very decent offer in consulting, though that would clearly be my 2nd preference)? Am I too apprehensive?
I'd greatly appreciate your take on this!
So the topic of looking out 5-10 years is extremely difficult. Also in terms of what "businesses will struggle" is also another tough one to call. Bankers are also getting laid off and HF's are shutting down as we speak as well. This happens in up and down markets across the board.
Right now comp of course is not at 05' and before levels when you saw crazy numbers. To be honest those numbers are likely dead forever, both in banking and research (if it comes back great).
Now on the Research specific side, overall there is no "Stable" job in wall street anyway. So i'd cross that off the list of needs. But its more tied to your bank. Does your bank do a lot of IPOs and are they healthy? Then you've really got minimal issues. Here's how you evaluate your job security.
Notice the top analyst part still comes first because even if your group gets booted, but your analyst was ranked highly he will get picked up quickly and if he likes you, you're joining up as well. Picked up quickly as in will be hired within a month time frame. Quite fast.
Your last question compares it to management consulting... That part is a bit startling to me. The question you should ask is if you want to work in Wall Street or not. There are always other finance avenues even if all of ER gets shut down, Investor Relations, Corp finance, Mutual Funds, hedge funds... Banking... There are other slots in finance
ER is not going anywhere anytime soon. Especially for some of the boutique players where research is a big driver of S&T and banking
Analyst, Analyst, Analyst. Hitch your trailer to the best god damn analyst you can find, not the firm. Its rare for a top ranked analyst to get canned, and even if they do, they'll get snapped up instantly. As their associate, you're going with them.
Thanks guys, great advice! ER is my fav, no doubt. Just added the comment about the consulting offer to provide a better picture of my situation. If I had a single offer only it would of course be a no brainer ;)
ad analyst: don't know yet which team I'm going to join eventually. Hoping that one of the II ranked analysts calls for an associate by the time I join, but there is def. a random component to it. Would love to have full access to the II ranking (incl. 2/3/RU), are you aware of a copy circulating somewhere?
ad trading/banking heavy: any idea how I could figure out which sector has a good trading flow at my bank?Markit or Greenwich equity/ETF trading reports show broker shares by geography but unfortunately no split by sector.
Cheers!
Generally, trading flow is going to depend on (1) what sector is "hot" (as indicated by volume), and (2) your bank's strength in that sector.
This of course depends the strength of the analyst. As the above posters said, ranking is most important. The #1 tobacco analyst is probably better than the 10th best tech analyst.
So, to figure out which analysts to target, google their names. Any awards will likely be mentioned in the results. Go for ranked analysts first. In the event of a tie, look at the average volume of the stocks they cover. Yahoo will list each analyst's coverage in their Starmine section. Note: do not use Starmine to pick analysts. Those results are pretty much meaningless.
Thanks a lot!
Do you have links/sources on data that could yield insights into volume traded by sector (did not come across anything like that)? Also, is there something like "common knowlegde" regarding the strenghts and weaknesses of the BB banks in Europe? Just know the teams ranked 1st in II, but 2nd/3rd placed analysts might be just as good, given the imperfect nature of such surveys?
Had a look at YahooFin, but seems to be kinda incomplete, at least for my bank (analysts and many covered stocks missing).
just realized: searching "All ranked analysts" AND "your bank of interest" AND rank* AND "institutional investor" via google leads to articles for second and third ranked teams, even though these are supposed to be hidden behind the II paywall.
ER - outlook and paths (Originally Posted: 10/19/2012)
Fellas, I'd greatly appreciate your advice/comments on this one. I might have the opportunity to join the ER division of a decent house. However, I am a bit concerned about two things.
1) Given my strong interest (and background) in macro and maths, Fixed Income or FX might be my final destination. I am afraid of being "stuck" in ER. Is this justified, or is the job rather a chance to get a foot in the door?
2) What about the short- to mid-term prospects in ER as volumes are still low and everybody is slashing jobs? Do you thing this has an immediate impact on a jr. associate? What would you consider sectors with a "brighter" outlook?
Cheers!
1) ER to fixed income / trading is tough. ER to Sales is doable, but you would likely be covering the same product you did in ER (equities). You aren't stuck: HFs, asset managers, F500s all like ER guys.
2) Bonuses are low for junior guys right now (though this is somewhat true across all of finance. There are definitely fewer openings. That said, there are relatively fewer layoffs in ER than IB & S&T because ER is very lean to begin with. I actually can't think of a sector in finance that is really "sunny" right now. The industry is contracting.
I broadly agree with the rainmaker.
At junior levels you can move to a lot of different positions. Banking (in your coverage sector), sales, AM, corp fin, anything in the sector you cover is really fair game. Also, if you start at a high quality firm, lateraling to other parts is far easier than moving outside of the firm.
Finance is shrinking and it can be hard to get exactly what you want. That being said, get a job that you like and gets you excited. All of the worries about which sector is next or safe is a craps shoot. Go for a strong firm (this doesn't necessarily mean a big or BB firm), a role that you like, in a location you want to be in.
Starting out in ER - good career choice? (Originally Posted: 10/06/2011)
I just got an ER offer at a top tier BB (think JPM/GS/MS) and am unsure whether or not to take it I'm in my final year of ugrad). To be honest, I wanted to try snag PE, looked into a little bit of consulting as well, and looked into VC. ER was the only offer I ended up with. I'm not sure what I want to do in 10 years (but it probably involves being at a start-up or in some sort of industry role). Is ER a good place to start at all? I get the sense that it's not really all that respected on the street compared to ibanking and especially since I don't yet know what I want to do in a few years, I want to take a job that still leaves me lots of options. Thoughts? I
No it's a piece of shit career, decline the offer.
.
Definitely decline this. ER exit ops are terrible (Think back office at large corporate centers, telemarketing, etc) and so many banks are hiring right now that you'd be stupid to settle.
Disagree, i think its a good place to start especially if your planning to transition to S&T later
^sarcasm detector needs new batteries
Funny thing is i'm serious lol
Other than the kids that get into S&T right out of school, your only real chance is transitioning from ER
I don't understand why ER's such a bad place to you guys?
Still needs batteries.
I think he's implying that everybody else was being sarcastic...
"and so many banks are hiring right now, that you'd be stupid to settle"
ER and Quant Analytics are going to be the only FO divisons that survive the coming bankruptcies. And it makes for a great upper-middle-class career that's relatively stable and allows for a little family time when you get older.
More important than which bank you'll be working at is WHO you'll be working for. Google the senior analyst and figure out as much as you can about how good he is at making calls in his sector.
Yes, it's worth it. Especially if you want to have a job in 5 years.
It's a great move...accept the offer. Exit ops are great. The skill set is solid and the work you'll be doing will probably be more intuitive, stimulating and challenging than IB or S&T.
Despite the apparent sarcasm, it can be a shit career. It can also be a great career if you play your cards right. At any of the BBs that you named, you will be able to transition quite easily into an S&T role (focus on sales, don't know why anyone would go into trading right now). You could also possibly switch to IBD in the sector/industry that you cover or to the buyside (mutual fund or L/S hedge fund). With that said, analysts put in a lot of time training their associates and I wouldn't expect any analyst to help you get a new job. But it's very important to find an analyst in a sector that interests you, who is well respected, and who "gets it." By gets it, I don't mean II ranked. There are some analysts who work 100 hour weeks who are less effective than others who work 60. Make sure you don't work for one of them as your life will be miserable.
As for why it could be a shit career...there are several reasons. Obviously ER is a cost center and bonuses are unpredictable. This used to be more true at boutiques/MMs but it looks like all of the BB's will F their employees this year. Also, you get sort of pigeonholed to your sector/industry. This is great when its a hot sector but could be terrible if the sector loses interest or many companies are taken out or become irrelevant. You also don't develop as wide a finance skill set as an IBD analyst and this could narrow your options. If you look at bios of analysts, especially non-NYC analysts, you'll often see guys who have worked for 3+ firms and seem to be at a new place every other year. It's a really sad existence but the truth is that these guys typically aren't very good at what they do and simply have no other options. They're afraid to get out of "the game" because they don't know anything else and convince some shit boutique to take them on with the hopes of getting banking mandates. Like I said, pathetic and a sad part of the ER industry.
Damn, you people have some strong words for an undergrad taking an ER gig at a BB.
ER has great exit ops. The longer you stay in it your exit ops decrease very very quickly. There are very few firms who are going to turn you down if you have worked in it for a couple years and picked up solid writing, modeling, research, and financial analysis skills.
You are right about the respect thing. I think it is because ER is most def not an unlimited compensation career and in fact has an image of low comp. You will max out at $800k (there are some exceptions supposedly though i have never met them). At the senior associate level (5+ years experience) you'll max at $200k in a good year and group like energy. This is contrary to the image of bankers making millions and PE/HF guys making 100s of millions. Again ,the image.
I am however very confused at how they even get comp this high. I don't want to be the person who says that wont last long though cause if you dig around on WSO you'll find threads from '07 claiming the end was near for ER.
You do get pigeonholed in your sector but so does everyone at some point. Again, back to carefully managing the time you spend in the career if you do not want to make it a LT thing.
I actually think it is a great LT career. $500K plus for avg work weeks ~60 hours, even at the junior level? Pretty damn nice.
hahahaha only on Wall Street
if you have no other options.. your real option is no job so I ask.. job vs no job...
feel better now?
ER is a good place to start. I don't know of another job where straight out of college, you get to sit down with CEOs and CFOs of major public companies, while at the same time pitching investment ideas to PMs managing hundreds of millions (or even billions). You develop modeling, research, and communication skills, and build nearly unparalleled expertise in your chosen sector. Round that out with reasonable hours and good pay, and this is a no brainer.
Well done, neighbor.
plz send ER associate opportunity my way instead ty
:(
Equity research careers in future (Originally Posted: 06/05/2013)
Hi, since the financial sector has become less profitable due to more regulation in recent years, where do you see the future of ER? I mean, ER is not directly generating revenue. on the other hand, good ER is necessary to get in commission and underwriting fees. but do you think there will be many lay offs in ER due to the costs? A friend of mine is a trader at a BB and told me that due to increased algo trading volume and more automation, many traders will lose their jobs over the next years. not everyone ofc. and ofc some products need human beings, e.g. structured debt or otc derivatives. but what do u think will happen to ER? do you think the situation is similarly bad (liek trading)? im currently in college, but did two summer internships in ER (one at an asset manager 300bn AUM plus and one at a botique) and I loved it. I definitely wanna apply for a summer internship before my final year, but all this negative talking about ER causes me to hesitate. is all this ER bashing exaggerated?
thanks a lot for any insights, replies, opinions (preferrably from people who work in ER or know someone closely who does)
"all this negative talking about ER" ?
Sell side ER may get leaner although it's already pretty lean. But I don't see it going away anytime soon, not at BBs at least. I talked about some interesting greenwhich survey results from 2011/12 in one of my older q&a posts, which showed the benefits of having a strong ER division in terms of both primary and secondary markets.
great, can you post the link of the Q&A thread u mentioned? thanks a lot!
Flake is correct, while the world could change here is why ER is likely going to be around
How research will change: 1. Likely gets consolidated, as banks get more efficient, you can outsource modeling and basic tasks freeing you up to cover more companies 2. Small shops getting squeezed out, again a big pull is being able to take a company public + cover the company, so a strong IB team and ER team will still be around. 3. Move to the top. More and more, every year, pay is becoming more performance oriented so working for a top analyst is significantly more important than working for an average analyst. The top analyst will also be able to choose better companies to cover.
(Drill point 3 into your mind, go work for the best analyst possible, that is where you will see the most gains)
These are all opinions, the world could end but that's unlikely the case, adapt or die. If you want to do ER find a top analyst at a top firm, work hard and do your best. If it blows up you still have marketable skills for other finance jobs.
thanks a lot. and I really hope work is becoming more performance related.
I currently am interning in ER and have gotten mixed words from the analysts and the head of research.
ok, what exactly are they saying? what is their main concern? thanks
Im just curious, where can I search a list of top analyst? I know II has a ranking for subscriber but are there any free (and reliable) resources around?
Typical Career Path of a Equity Resarch Analysts. (Originally Posted: 03/23/2015)
This site talks a lot about IB, PE, VC and HF. I was wondering could someone provided a detail storyline of a typical Career path in Equity Research. Where do you typically start? Is there room for promotion and growth? How long does it usually take to get promoted? Whats the salary and work/life fit of a person in ER? Thank you.
Many people start out at a sell side research shop annd stay there for at least 2-3 years or so. From there, associates can exit into a number of roles (buyside at long/short HFs, investor relations at F500, corporate development at F500, etc.). Some associates stay on and work to gain their own coverage, which is not a very defined process and varies greatly from shop to shop.
Base salary usually matches the base in IBD at thr junior level, but bonus will be lower. Can't speak towards more senior compensation. In general work/life balance is better than IBD (except around earnings season), but you're almost always thinking about the stocks you cover because news can come up at the least expected times.
Hope this helped!
Typical Career Path of a Equity Resarch Analysts. (Originally Posted: 03/23/2015)
This site talks a lot about IB, PE, VC and HF. I was wondering could someone provided a detail storyline of a typical Career path in Equity Research. Where do you typically start? Is there room for promotion and growth? How long does it usually take to get promoted? Whats the salary and work/life fit of a person in ER? Thank you.
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