CPA trying to break into Sell-side Research
Hi,
I'm currently a senior consultant at a big four accounting firm. I have a passion for markets and writing. I am very interested in getting into sell-side equity research. A little bit about myself: I am 30, I have 6 years experience in the military, I'm a CPA, I have a BS & MS from a mid-tier state university in accounting, and I currently have 4 years experience in audit and transaction services (M&A financial due diligence) at a big four accounting firm.
My question is simple: what is the easiest route to a career in equity research? I hope my knowledge and understanding of financial statements and GAAP will be looked upon favorably. I understand valuation models and quality of earnings. I also have a passion for writing.
I'm not married to the sell-side. I hear it is easiest to break into coming from another profession.
I'm considering applying to top tier MBA programs and trying to land a BB sell-side job on the back end. I'm also considering the CFA as an alternative to an MBA.
Does anyone have any advice?
It would be greatly appreciated.
You have a very reasonable shot - depending on what industry cluster you worked in (sell-side is demand-driven) and how familiar you are with that industry's business drivers and constituents. Be prepared to explain how TS is relevant to ER - since your work in TS mostly deals with smaller, private clients and doing financial due diligence. That said, you're absolutely correct that a good understanding of accounting will get you far in ER. I could see your TS experience being useful in the realm of channel checks and good exposure to senior management.
CFA is a very respected and virtually required designation in sell-side (and even buy-side) research. You'll be expected to pursue it while you're at the firm, and having at least level 1 completed when you apply shows an interest and commitment to the program. A top MBA is always the way to go, but I'd say that anything lower than Top 10 will probably only provide a marginal benefit for Sell-Side - less than the CFA in my opinion. Ultimately, it's useless if the bank doesn't recruit at your school.
Thanks for the thoughts Sovjet. That makes sense. If I can make the switch without dropping a signicant amount of time and money on an MBA I'm definitely going to try. Any suggestions on metrics I can use to measure demand for research in industries? I've spent a lot of time in Retail and upstream Oil & Gas. I was hoping to focus my efforts on an insustry where there is more demand.
I'm in Oil & Gas (in Canada), and I can tell you that this is the hottest industry up here. Essentially, just use your judgement to determine what's hot based on M&A activity (new stocks, many stocks, high volumes, low analyst coverage).
As an ER department, the name of the game is finding a stock with good volume and low coverage (few analysts) because you can then a) capitalize on the volume to drive your trading commissions and b) offer fresh insight on those stocks not being covered to death.
O&G is definitely a winner in my books - retail is hit or miss, especially in this economy.
I agree you have a very real shot. I wouldn't sweat the industry focus too much yet, and - at least imo - you're better off positioning yourself as industry agnostic and just hungry for the right opportunity. No need to narrow the potential opportunities. Off course if you are applying for a position which you think you bring specific industry insight to the table, by all means highlight that.
I would advise against a FT MBA. Entering the top programs in your 30's is a challenge, but more importantly you have the background you need to break into ER as an Associate, which is all you could hope for coming out of B-school. Definitely focus your time on networking, breaking in, and the CFA over B-school apps.
If you meet the usual BB resistance, try a respected MM firm. You may find it suits you, or you can always climb to BB. Talented, experienced Associates are usually in high demand in all but the crappiest markets.
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