Give me an optimistic take on the outlook of ER, even if it is devil’s advocate
Want some relief from the pessimism here!
Does anything think that the industry outlook really isn’t so bad? That there’s a future here? That consensus is wrong?
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I posted this a while back, but figured I could re-circulate after the JPM AI post:
Are there mindless tasks that AI could execute in lieu of a human? Absolutely — let’s put that on the table. However, when I consider prior technological advancements (anything as trivial as the creation of an electronic calculator, or the ease of access to computers/internet/software/telephones, to the formation of algos) it seems that all of these could’ve, in theory, replaced some jobs on the street. In spite of this, it seems as if this created a quicker paced environment, increasing market efficiency, and consequently creating more of a use case for human labor. Even quant focused shops require human judgement, creativity, and relationship curation. Maybe this is a cold take or, wishful thinking; but was curious to hear other thoughts.
Agreed that AI isn’t doomsday for ER … but beyond that, do you think the outlook is better than most people here seem to?
I’ll chime in since I was one of the aforementioned pessimists.
Pay for covering analysts (i.e. directors and MDs that lead their teams covering their sectors) is still very good. I’ve heard most seniors with a few years of tenure now make $600k-$1mm a year. If you can be top 3 II ranked at the right bank, you pay can climb north of $1mm and even to the stratosphere of $2mm+ a year.
If you could get to a place where you’ve been in your seat for a while, have built up your reputation within your sector’s client base, have a team member or two who is senior enough to handle the daily blocking and tackling (i.e. maintaining the models, writing the notes, keeping on top of the team’s calendar, etc.) then the job can become an 8am-6pm schedule outside of earning season.
All of that is easier said then done and will require you to put in 5-10 years as someone else’s junior where your hours and pay are at the whims of your boss. If you have a boss who is a workaholic who is gunning for a number 1 II rank, then you’re going to be working 65+ hour weeks for several years before you’ve built up the seniority to cover your own sector and have more control over your schedule. Also, when you’re a new analyst you have to grind long hours for a few years in order to build a reputation that allows you to more or less coast.
All that to say, ER can still be a great long term seat if you have the chops to put in the long hours and deal with just “okay” pay for 5-10 years as you climb up to becoming established.
Hopefully that’s optimistic enough for you!
That’s great, thank you!
Basically, “you get shortchanged in that you’re working way too hard for your comp as a junior, but, once you become a senior, you’re on the other (better) end of that, which means ~$800k median ish pay on ~50 hour weeks during non-earnings”
Which, realistically, is probably more than most people (even those who in finance) end up making
Yes exactly. Plus it’s not like junior pay is bad. You still make much more than the average joe. It just compared to other high finance roles it seems that ER pay for the YOE band of 5-10 years is a bit lacking. When you’re 5 years in the seat you might be clearing mid-200s. That seems great but people in banking, S&T, and on the buyside at similar seniority levels are making at least 6 figures more a year than you and some of them (S&T and buyside for instance) likely work less hours than you. Plus your friends in other corporate jobs with 5-10 years or experience might be making between $120-200k (so call it $50-100k less than you) but they’re working 9-5, can take vacation whenever they want, and generally have much less intense work days than you. Not a great feeling when your buddy in FP&A tells you he made $200k last year and leaves at 5 everyday while you’re grinding it out to 7-9pm everyday and every longer during earnings.
All that said, your ceiling is much higher than the average corporate joe and you will close the comp gap with your banking, S&T, and most of your buyside peers. You just have to deal with the years in the middle where your pay is meh.
I agree. Some ER people I'm familiar with on a direct basis make 3 mil a year and barely work because at the end of the day, upper level ER is just a glorified sales job and they barely touch models and work basically 2 hours a day sometimes. This I only heard is for super-star top II ranked people and doesn't translate to everyone. The person making the most makes 10 mil and I saw that's the absolute ceiling because he's #1 II in 3 categories and actually works a decent amount. But if you become #1 II in one sector and come from the right covering analyst it might be a pretty chill job.
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