Interview with an Equity Research Associate (Part 1/2)

The following is an interview with Equity Research Associate IntoTheRain (he is also available to answer your questions)

Are you a professional and want to do an interview? View our interview template here and then email me your responses to [email protected]

  1. What is your job title?
  2. Equity Research Associate (Big 5 Cdn Bank, top ranked team/analyst, popular sector)

  3. What are previous positions you have held and how many years of experience do you have?
  4. ~4-5 Years assurance/advisory at a Big 4 Accounting Firm. Left at Manager level.

    Undergrad

  5. Did you go to a "target", "semi target" or "non target".
    Target for accounting, semi target for finance but somewhat different stream/program

  6. What was the most useful thing you learned in ugrad that you apply in your current position?

    N/A - general path for my program was the Big 4. However a portion of the class eventually branched out into other areas (e.g. industry, valuations, consulting, banking) after they pick up their Chartered Account designation (a lot more recognized in Canada than the CPA in the States)

  7. What was the most useful thing you learned in ugrad that helped you get where you are now?

    Build relationships early and often, with people above and below your year, in and out of your program. Don't network only when you need to find a job. This costs very little other than time (which you'll have a lot of during school) and the rewards are exponential down the road.

  8. What was your most useful class and why?

    There was a public speaking course which was very relevant for presentations, meetings and interviews in the workplace. You were recorded every class on a topic and critiqued by a workshop class of around 20. We were taught structured speeches as well as impromptu and the recordings allowed us to see our gradual improvements week after week.

  9. GPA?

    We use a percentage system, if converted:
    Undergrad before OCR recruiting to get Big 4 placement - 3.9
    Undergrad after landing job - 3.7
    Masters - 3.9

  10. During recruiting, how were you able to set yourself apart from other competitive candidates at your school?

    Our program has pretty good placement rates in accounting. I had decent grades, good extracurriculars and did some work as opposed to sitting on my ass the first summer. I was also not too awkward while networking in person. Guess it filled out their checklists.

  11. What kind of internships did you have during ugrad?

    My internships were all with the Big 4. I stayed after full time. It was great for progression as long as you were good, they count your experience so moving up within the firm is quite fast. My program was very insulated so while there were a few keeners networking and flying out to NY their upper years to interview with BBs, I was pretty much in a bubble and content with coasting through school and picking up my CA first. I recall a roommate of mine was telling me about interviewing with GS and my only response at that time was "that's nice... but does it involve alcohol?"

  12. Graduate

  13. Did you get an mba (or msf or equiv) or are you considering it?

    I have a Masters in Accounting. Will not consider a MBA given the opportunity cost and the fact that I would be able to pursue the same roles that a MBA could with my CA. Along with the fact that my preference is for research anyways so I doubt I can "upgrade" from where I'm at. Eventually, I may be interested in going to the buyside but job experience is much more relevant than a MBA at this point


  14. What was the most useful thing you learned in grad school that you apply in your current position?

    The number of papers improved my writing. Also, reading and proofing my team's writing during group assignments highlighted what shitty writing looks like.

  15. Do you have any professional certifications (CFA / CAIA / etc.)? If so, how has that certification helped you in your career?

    CA is mighty useful in this country since you're not just seen as a bean counter if you have some interesting experiences to back it up. Working on the CFA now, probably should have started the same time as my friends, who mostly are finished by now but I have no regrets going on those vacations instead.

  16. On the job

  17. How did you initially "break-in" to the industry?

    Saw a posting that was looking for a CA as a minimum requirement. Applied with very low expectations or even general awareness of the role. I'm a bit embarrassed to admit that I knew very little about banking, research, PE etc etc but that's where WSO came into play (and the main reason I'm doing this as appreciation for the resources that this site has offered) A lot of interview rounds, case studies and self-studying later, I was able to land the role.

  18. What were some of the main factors in getting the job position you have now?

    I had a lot of friends come to bat for me on this one... remember how I mentioned networking above "for fun" even if you're not targeting a job? I didn't keep in touch with people because I needed them for something, but I enjoyed their company and shooting the breeze from time to time. By building a solid long-term relationship with these people, it's certainly a lot more effective than cold calling contacts from the past when you need something. So basically one day I casually mentioned I was apply for a research role during lunch and my friend mentioned that she knew a friend who was an associate at the firm. She willingly vouched for me and I kept in contact with that associate after each round of interviews. Another friend who was a banker overseas stepped up and sent me research reports of the group to help me prep as I was not too familiar the industry. A PE friend gave me some helpful advice as he was close with some associates in that department. Apparently the analyst who hired me and I had a common acquaintance as well and even though that person never told me she gave me a glowing review...etc etc.. you get the idea...

    So yes, I did get lucky on some parts, but the moral of the story is don't be a douche, make lots of friends, and don't only connect with people when you need them. You'd be surprised at how easily things fall into place when you need a bit of help down the road.

    Now of course, you can't get in purely by being a good sport:

    - I had a very good track record with the firm - top rating at the "top group" with a recognizable client list and diverse extra-curriculars.
    - Good academic record and previous experiences (probably would have had a reasonable shot at banking...if I even knew what it was back then heh)
    - Even though I was in accounting, I had a lot of exposure to transaction services, due diligence, forecasts for IPO, valuations/modelling. I had a positive relationship with the partners and stayed out of the office politics so I guess they liked handing me these one-of projects.
    - I think I presented relatively well during the interviews, there were many rounds over a long period of time. (a few months) but I had the "I'll take what I can get" attitude so it didn't really feel like such a grind.
    - I was given an industry related pressure cooker (less than an hour) case study/modelling test which I punted but I think I was honest and managed expectations throughout so they weren't expecting the moon

    I was told afterwards they picked me final round over a top tier BB (GS, MS in NY, UK etc) banker. Found it quite amusing...I guess I probably got there based on "fit".

  19. What are some of the specific things you do in your current position?

    Maintain models, keep up with the industry news, write reports... same thing as most other associates in this field I would expect. I have a very good boss who is interested in mentoring me as opposed to using me as an excel monkey so that's always a plus. There's no emphasis on face time either so once I'm done my work I can bounce.

  20. What is a day in your life like during the workweek? Can you give us an hour by hour run down of your typical day?

    Non-earnings season 7 am to 6 pm, earnings 7 am to done. I usually come in one day a weekend. It's kind of hard to give an hour by hour as most days are different. The job is very reactive so it's very dependent on the news front.

  21. What is your favorite part about the job? What is your least favorite?

    Least favourite: I'm not a morning person and I can no longer get plastered at the bar on Thursday night and roll in 11 am on the Friday.

    Favourite: I like to follow the news even on my own and am a very curious person by nature. A lot of the "work" I do doesn't really feel like work so it's pretty sweet I get paid for this. Also, I'm around very smart people who take pride/ownership of their work and have almost unlimited resources at my disposal for researching my own ideas.

  22. How did your background (life up until graduating college) best prepare you for where you're at now?

    I generally get along well with people and can honestly say I have no enemies or people I dislike. Since I didn't really attend class much, I guess you can say I had a lot of time to recharge my batteries before hitting the workplace.

  23. What is the company culture like at your firm? What is the size of your firm?

    Big. Culture in research is rather reserved but everyone seems smart and polite

  24. 13. If you have worked in multiple countries, what are some noticeable differences regarding work culture and hiring in these countries?

    N/A - I've been to the States but it's like Canada without the "eh"

  25. What type of person (what background / knowledge / experience / personality) is best fit to do your type of job?

    I think a solid foundation in accounting is very important as you need to break down those financials quickly. Otherwise, general interest in the market and preferably your industry is nice. Personality wise, you'll need to be calm and collected, but always confident and articulate (written and oral) in defending your position.

  26. Did you ever have a mentor and who were some other influential people who helped you along the way?

    I consider a lot of the people I work for/with in the past to be my mentors. Like to take a little bit from everyone and build my own identity.

  27. Are the sacrifices you've made to date worth the benefit realized by you so far in your career?

    Absolutely.

  28. If you weren't working in finance, what do you think you would be doing?

    I assume this means business/number related professions as well? It would probably be law.

  29. What keeps you motivated?

    Even if I win the lottery tomorrow, I would still live my life exactly the same. I'm pretty content at the moment so just keeping the course is enough to motivate me for now.

  30. How much does money motivate you?

    Motivate a little in the sense that it's one form of measurement for success. But otherwise not a whole lot. Partly why I would not consider banking at this point in my life as I personally do place a value on my free time and would forgo a potentially bigger payoff via the banking/PE route.

  31. How much does someone in a role like yours make per year (base + bonus)?

    As far as I'm aware, research doesn't typically hire straight out of school in Canada so your comp. is variable depending on a multitude of things: your previous experience, designations, industry, analyst, performance of bank and yourself. It's very discretionary and bonus scales nicely with your experience. I am personally satisfied with my pay.

  32. Have you ever considered leaving your job to start your own company?

    No, I'm not emotionally attached to the things I do, so for me starting my own business limits my flexibility if I'm financially invested.

See Part 2 Here (available on March 1, 1PM ET)

ps - mod note: here's another great discussion on equity research interview questions and answers.

Comments (17)

Feb 27, 2013

Great interview. Thanks for doing this IntoTheRain!

As an undergraduate who will be an Equity Research Summer Associate at a BB this summer, do you have any advice on how to best prepare for the internship?

I'm also curious where you see the future of the industry? Thanks again.

"My dear, descended from the apes! Let us hope it is not true, but if it is, let us pray that it will not become generally known."

Feb 27, 2013
Illuminate:

Great interview. Thanks for doing this IntoTheRain!

As an undergraduate who will be an Equity Research Summer Associate at a BB this summer, do you have any advice on how to best prepare for the internship?

I'm also curious where you see the future of the industry? Thanks again.

Np. congrats on your role. I would recommend reviewing your analyst's comments to get a sense of his/her writing preference and go through the annual reports of your coverage space to pick up the nuances of each company. See where the information is taken from so it won't take you forever to throw together a flash. Recent quarter press releases are also useful. Understand what the key industry metrics are and what makes each stock tick.

I have a fairly positive view of the industry. Sure the banks may see it as a cost centre, but it's certainly a very useful one at that. S&T would be hurt quite a bit without research. Given that the departments are so lean, the banks are getting pretty good value on a pay per person through the department. They are generally well liked by S&T and Banking (at least at my firm) so doubt it will go away anytime soon.

    • 1
Feb 27, 2013

Nice interview, thanks. Although I'd change the date for Part 2 interview, only 28 days in Feb..

Feb 27, 2013
simon-kemp:

Nice interview, thanks. Although I'd change the date for Part 2 interview, only 28 days in Feb..

:) thanks

WSO's COO (Chief Operating Orangutan) | My Linkedin

Feb 27, 2013

How tough would it be to lateral from equity research (solid analysts) at a top industry boutique in a non-NY city to a top BB equity research group (MS, CS, DB, JPM)?

Feb 27, 2013
brownbear1257:

How tough would it be to lateral from equity research (solid analysts) at a top industry boutique in a non-NY city to a top BB equity research group (MS, CS, DB, JPM)?

I don't have enough information to provide an answer. It's dependent on a lot of factors (Amt and quality of your experience, your personalty, referral/networking, industry need, school etc) Put it all on a scale from shitty to great and see where you fit. Generally, I would say good research experience is valued and I find BB ER to be a lot more accepting of non-traditional applicants than IBD.

    • 1
Feb 27, 2013

Hi monkeys! This is my first banana-comment here :)

I have a questions for IntoTheRain but is also for everyone that want "help" me with a tip or advice. I just graduate and I am looking for a job/internship whatever in equity in UK. My background is from a spanish university. I read about the job process in banking and my main problem is my excel skills. Are really bad! Any idea how I can improve for interviews? I heard that some boutique make an excel interview or modelling...

Anyway, great interview! I'm waiting for part 2.

Thanks!

Feb 27, 2013
peterwhite:

Hi monkeys! This is my first banana-comment here :)

I have a questions for IntoTheRain but is also for everyone that want "help" me with a tip or advice. I just graduate and I am looking for a job/internship whatever in equity in UK. My background is from a spanish university. I read about the job process in banking and my main problem is my excel skills. Are really bad! Any idea how I can improve for interviews? I heard that some boutique make an excel interview or modelling...

Anyway, great interview! I'm waiting for part 2.

Thanks!

In this day and age there's enough resources on the internet that you can be proficient at pretty much anything if you put your mind to it. It's really not hard to get to a decent level especially if you have the profile to land a top finance role. Most research/PE positions will require a finance modelling test but excel knowledge should be the least of your concerns at that point.

    • 1
Feb 27, 2013

Thanks for the interview~

And this is totally off-topic, but did your username by any chance come from a Starcraft player?

73 good sir!

Feb 27, 2013
AgentBishop:

Thanks for the interview~

And this is totally off-topic, but did your username by any chance come from a Starcraft player?

Yes, I was a bw player back in the day and he was one of my favourite players (I play terran though). Work and life got in the way since university so I haven't gamed or tried SC2.

Funny enough, the apm I picked up from that is really useful for work. My click and hotkey speed allows me to dual screen excels really quickly and it's hard to explain to others when they first see it haha.

    • 1
Feb 27, 2013

Thanks for sharing your experience. I am a Geophysicist working in oil and gas service industry. My work revolves around finding the rock parameters like porosity and permeability for client companies before Geologist or Geophysicist from oil companies pick horizons and pass it to Engineers.

Now, My experience gives me basin knowledge and understanding of Western Canadian Sedimentary basin. Do you think following things on resume will make my chances better to get in ER.

1.Financial Modeling courses from wall street prep
2.I recently got offer from IHS to work as technical advisor for Accumap and Petra. I think Joining it
Will give me hand on experience of Accumap ( Scotia use it often) and Petra ( Economic analysis for data).
3.CFA Level 1

Thanks in advance :)

Feb 27, 2013
energyanalyst:

Thanks for sharing your experience. I am a Geophysicist working in oil and gas service industry. My work revolves around finding the rock parameters like porosity and permeability for client companies before Geologist or Geophysicist from oil companies pick horizons and pass it to Engineers.

Now, My experience gives me basin knowledge and understanding of Western Canadian Sedimentary basin. Do you think following things on resume will make my chances better to get in ER.

1.Financial Modeling courses from wall street prep
2.I recently got offer from IHS to work as technical advisor for Accumap and Petra. I think Joining it
Will give me hand on experience of Accumap ( Scotia use it often) and Petra ( Economic analysis for data).
3.CFA Level 1

Thanks in advance :)

Your background would be suitable for O&G and mining type research roles and the simple answer to your question would be "sure" to all three points as they can't possibly hurt your chances. It may be enough to land you a first round interview after which you'll need to demonstrate that you can actually apply both the finance theory and your industry experience on the job. Keep in mind that while it may sound rosy on paper, you'll definitely be put up against Engineers with MBA/CFAs, CAs with mining/gas client experiences or ibankers for that spot. You'll need a story to convince the analyst why you may be the best fit. Until the time comes, I would recommend continue to strengthen your resume on anything relevant to the opportunities you are trying to pursue.

    • 1
Mar 5, 2013

Thanks.....

Mar 11, 2013

What kind of companies you are covering right now ?

Apr 10, 2013
energyanalyst:

What kind of companies you are covering right now ?

Would prefer to keep it private but it's a big (unfortunately feels too big most days) sector with lots of flow.

Apr 10, 2013

Thanks for sharing your story with us. Just a couple questions:
-When you were in ugrad, did you just shoot for the "Big 4" or at that point did you have an interest in ER/banking also?
-Why did you want to leave the Big 4 firm?
-And if you could do it over again, would you have went the CA->Big4 route or would you have chose a different route?

Apr 11, 2013
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