Is equity research "easy" to get into compared to other fields.
Hi guys,
Heard that ER tends to be the most egalitarian when it comes to recruitment, ie the lowest emphasis on target schools, previous internships and specific degrees to enter this field at analyst level.
Wanted to get your opinions on this as some of you may have more experience in this than I do.
I am very passionate about the world of equities or derivatives however don't have the strongest academic background (only got a mid diploma from a mid-table uni in business, which is a meh field as far I think.
Thanks for reading, look forward to reading answers
No, ER can be equally tough to break into for a wide variety of reasons. Firstly, the # of people hired itself is pretty low and turnover is very low (as compared to banking). Additionally a lot of fields like HC, materials require education in that field and so a degree in finance won’t be enough to break in. A lot of shops do not even hire out of school. Till a few years back, ER was a common exit from banking. And don’t even get me started on the whole CFA requirement.
Half agree.
ER can be as hard to get into as IB, it can also be slightly easier. A lot of people honestly don't know what ER is or does so it's often not top of people's lists. On the other hand, ER SA/FT classes are 5-10x smaller than IB classes. But yes most ER people will still tend to be from target/semi target schools.
CFA isn't normally a requirement, but sometimes it's encouraged and it's almost always subsidised.
The HC point only applies really if you want to go into Pharma/Biotech. Plenty of other sectors.
OP is right in that the job itself is more "egalitarian" in the sense it's far less bureaucratic, hierarchical and political than IB (still there but less so). But that only matters once you get in.
Another thing I'd add is OP sounds like he's graduated and ER recruiting basically works like this:
Never seen anyone come in not on the paths I just described.
Thanks a lot for the comment. Appreciate it. Yeah I am looking to get in but tbh am rather interested in a economics MSc first, getting a idea of what the field looks like. Business degrees are nearly as useless as polsci here atm in my view so gotta pull myself to a better position.
Seen ER in England recruit from a wider variety of backgrounds, former chemists PhDs or accountants for example. I actually nearly got a position but final interview I blew it.
I do have a relatively nice track record on stock markets, show understanding of the market as much as I can, I think a lot of people do appreciate that. But that's not something you can even talk about if you don't get seen by a interviewer ofc.
What if I am doing my MBA and completing my summer internship in a research-ish role? Could I then recruit FT for ER or is a summer internship in ER basically mandatory?
Came from FP&A so its possible, not easy tho
PhD programs/ MD’s / research labs
It’s not “easier” to get into in the sense that it has a higher “acceptance rate.” Given the small number of seats and irregularity of recruitment given low attrition and lean teams, it probably has fewer seats per application.
However, it tends to draw a different candidate pool. Many people who go into IB are deciding between IB, MBB consulting, or law. Basically, the “prestige crowd.” As such, it draws heavily from Ivies and “conventionally elite” backgrounds.
ER, in my experience, has a lot of people who had been in industry/graduate school in a related field, finance-passionate graduates from non-targets, and bright people from elite schools who may not have known what they wanted to do post-graduation and are “trying out” finance (vs. having been gunning for IB since freshman year). It’s a more eclectic mix.
So, even if ER has a lower “acceptance rate,” it’s not the same “prestige crowd” applying for the role … so an intentional applicant may actually have a better shot.
I’m a rising soph at a school that has virtually 0 rep in ER (Yale) but looking to break in. Do you have any tips on how to do so, and will it be an uphill climb?
Intentionality is key.
The first step is to speak with people in ER who you might have something in common with. Be it another Yale grad, someone from the same high school as the one you went to, or a family friend/friend of friend. Be clear about your reasoning as for why ER rather than another part of finance.
Refine that pitch, have the same technicals you’d need for IB down, and have a stock pitch in your back pocket.
DM me
PM me I can help you I think
From what Ive seen majority of the ER ppl are career switchers. Very few pure-blood hardos go into ER for their first job out of undergrad, its usually ppl who have done other things that want to transition to finance which is why there is so many CFAs
In ER, “fit” is ultimately what decides whether you get the job or not. This means fitting into the hiring manager’s ideal education background, work experience, personality, and future career aspiration because the seat is so limited and you will be spending a tons of time with the senior analyst. So in a sense it’s “easier” but also “harder” to get into. The hiring senior analyst could like/dislike you for any particular reason and that’s it. That said, ER prioritizes prior relevant work experience than prior academic achievement or “raw” intelligence because that’s not the best indicator for someone who would excel in this job and does not correlate how long the person is willing to stay with the team. A newly joined ER associate is usually completely useless for the first 6 months of the job, moderately helpful 6-12 months and can only be somewhat relied upon after at least one year on the job. And it takes about 1.5-2 years for an ER analyst/associate to become a fully functional work horse with minimal/moderate guidance on day to day work. Unfortunately buyside recruiters tend to start reaching out to prospects after one year mark and many analysts/associates tend to leave after 2-3 years on the job. So effectively the senior analyst only gets a good 1 year or so value out of the associate so that’s why most senior analysts would hire for experience over anything else to maximize the value they get from the associate. And that’s why an experienced associate who has worked with known analyst and/or decent firm can always find a lateral job. The sunk cost of training a new associate/dealing with known is simply too much.
Precisely. I’ll add that, since ER teams tend to be lean with little redundancy, when someone leaves, it’s often an “emergency.” There’s a need to hire someone promptly, and for this hire to be able to scale up and take on a full workload immediately. In these situations, there’s less attention paid to intelligence, prestige of background, and long-term planning, and more focus on “can they make our 80-hour week a 60-hour week NOW?”
Agreed on this notion of ad hoc recruiting as new hires are only needed when spots open up. Disagree however on the “urgency” to fill in spots unless a team is very down bad. Even then if they have a massive earnings season ahead, a team isn’t just gonna a random person who applied who they think “could” work 70-80 hrs per week. They still undergo vetting processes and is not gonna decide to hire someone full-time on urgency and only to find out they were not the right candidate who isn’t fit for the role. Not sure how the retention rate in er is like but in banking lots of folks are recruited that aren’t cut out for the role or burn our quickly as they got in for the wrong reasons. I would assume for er its more important to find the right fit as teams are much more leaner than banking and have less structured recruiting cycles and analyst classes
Don’t join ER bro
can you explain more?
ER is a cost-sink so classes have been cut really hard to the point that it's more likely you'll be able to get an interview for IBD.
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