Is sell side ER as bad as people portray it?
I’m really interested in working in ER because I enjoy company valuations and financial analysis. However, after reading about it on Reddit and WSO, it seems like the reality isn’t quite what i expected. Many say only buy side ER offers the intellectual depth and research experience that i look for. But of course entering buy side straight from ug is much more competitive and difficult.
What’s your opinion on this? Is SS ER still a good opportunity, or is it really as dull as some say? Also, how do you think AI will impact ER in the near future?
I did SS ER for 3/4 years and honestly the experience is what you make of it. I had a good time and learnt a lot but I think it's important to go into it with your eyes wide open to reality. See my key takeaways below:
Pros:
Would argue SS ER is one of the most intellectually stimulating FO jobs if you like fundamental research
You can fairly easily exit to a top HF/LO provided you work at a quality shop and you are actually good
Have found ER culture to be generally more relaxed with pretty manageable hours for the pay
Cons:
If you purely want to maximise your earnings 1 year out of college then you will have a terrible experience because you are almost guaranteed to make less than IB/S&T
To work in ER you need to commit to public markets because moving to IB/PE is very difficult (not impossible - I've seen a few people do it)
If you don't care about the job then you can coast and end up as a pretty mediocre analyst which leaves you a bit stuck in the job. This is a pretty unique distinction from IB (where if you are a mediocre analyst you can probably still exit decently because of IB's pedigree) and S&T (where it's harder and more painful to coast)
It's a fact that ER is in structural decline - you just need to make your peace with this if you take the job
What do you do now? Happy with the transition?
"If you don't care about the job then you can coast and end up as a pretty mediocre analyst which leaves you a bit stuck in the job." - Facts, this is me currently. Been coasting for years and somehow found myself picking up coverage. I'm so lazy and don't like the job but I am stuck.
What do you mean coast? Like you weren’t trying to maximize buy-side relationship or II votes? Are you a VP or MD?
Why is the move from er to ib difficult? Aren’t the technical skillsets virtually the same?
Deal execution vs. stock pitches are very different workflows. I know people that have moved from ER to IB but usually it's once they're more senior and have industry relationships they can leverage to actually source business.
Take this for what it’s worth because every bank is different but if you are truly motivated to have a career in SS ER it can be extremely rewarding, especially as you move up to higher levels, gain coverage etc. If you’re a coaster, have fun doing the tasks of a junior associate until you’re 50.
Move up or move out (to a different platform /bank or other exit opportunity). SS ER is not a good job for a career coaster.
Here are two previous threads you might like.
https://www.wallstreetoasis.com/forum/equity-research/sell-side-equity-research-best-kept-secret-on-wall-street
https://www.wallstreetoasis.com/forum/equity-research/dont-become-the-cheap-labor-guy
How do people feel about those exiting ER to IR? Seems quite common. Worth it as a steppingstone for that?
Yes, very common at my bank for people who no longer want the ER grind. Typically older associates or lower tier coverage analysts who leave. Also those with a lot of kids LOL.
Thanks. Do you know anything about the progression, comp, exits, etc of such roles? Or is it too far of a “step back”? For what it’s worth, on LinkedIn I saw some former pod analysts who switched over to it as well albeit at a much more senior level.
I wouldnt even say lots of kids. Seeing these analysts with kids but know nothing about them is sad
This depends so heavily on your covering analyst. Research is a lot more “choose your own adventure” than IB, consulting, law, or medicine.
I know someone who works for a relatively laid-back industrials analyst; he works 7:30-4:30 reliably, has never had a late night, takes ample vacation, has a constructive team culture, and is leaning a lot. It’s easy for him to learn and grow as he has so much free time, and so he can become conversant on his names and interview well for the buyside. Perhaps the easiest ~$150k job-secure you’ll make one year out of school, and with real upside.
I know someone else who works for a very difficult healthcare analyst; she works 8-8, with even worse hours during earnings (past midnight sometimes), takes almost no vacation, is abused on the regular, and relegated to the “drudge work” that the rest of the team does not want to do. Her hours and conditions are so brutal that, if she wanted to become conversant on her names and interview well for the buyside, she’d be (work + studying) pulling 80-hour weeks on the regular, and have hardly any life. All that at ~$150k as a first-year; cannot think of a white collar career that asks more and pays less.
The problem is, you have no idea whether you’ll be the first person here, or the second person. It’s the luck of who you get assigned to. Even if IB sucks on the day-to-day, you know you’ll get upside (and very good comp) out of it. A brutal ER team, in my view, has all of the downside of IB, but without the same comp and exits. That’s the risk you take.
If you’re passionate about public markets, a real “career entrepreneur” about becoming quickly interview-ready for the buyside, can somehow diligence your team, and aren’t in it for the immediate payout OR you’re just looking of et a foothold on Wall Street and ER is simply the seat you can land … I’ve seen it work. But it’s probably the worst hour-and-upside-adjusted comp not on Wall Street, but in the whole finance/tech/law/consulting sphere.
And if you’re a “coaster,” as others have said, you’ll be doing 60-hour weeks of associate-level tasks into your late 40s for a sub-$400k salary at best, unless you exit into another role.
TLDR: It is that bad, imo, but I’ve seen it work for some people under some circumstances, and if it’s your only way of getting your foot in the door on Wall Street, take it
This. I’m one that falls into the second bucket on a very lean team which means more responsibility for no increase in pay. I actually make the same as when I first joined. The problem is that I don’t really have the time to network or put together work to showcase my skills for names outside of my coverage to interview for buyside roles (not pursuing MMHF). I’m looking to lateral for now for immediate jump in pay for the same work if not less hours but don’t love the idea of resetting. I would much rather go directly to a buyside seat but that’s easier said than done especially in my current situation.
I’m sorry to hear that.
It’s precisely the trap that many in ER fall into…you’re in the “IB Grind,” but 1) you’re not compensated for it, and 2) you don’t get “automatic” exits from it.
I think many here — myself included — have the view that ER hours/comp need some recalibration. Seniors still expect their juniors to pull 60+ hour weeks as they did, but the pay and upside no longer justifies it, so attrition is high and many top performers leave.
In time, the free market will bring this to an equilibrium. Either they won’t find competent people to do the job and will need to raise pay, or they’ll just have to make do with a crop of unmotivated, “get me out of here” associates unwilling to go the extra mile for their analyst, which will bring about a “bare bones-ing” of ER once their seniors retire.
It’s a hard job, but not the only hard job on the street. The issue is that it’s not recognised as the hard job that it is.
I'm in the second bucket and any aspirations I had to go to the buy-side have been thoroughly dismissed. At this point I just wanna work with normal hours and not be constantly on edge about my analyst sending me work at 1am for it to never be read or monetized.
Can someone provide more color on exits? I was under the impression that exits to buy-side ER would be pretty strong, assuming you’re working for a decently ranked analyst. I was considering making the jump to work for a top ranked analyst. From convos with that team, it sounds like exits are strong but this forum seems more negative on them
Exits are definitely still strong. MM HFs love ER people and LOs tend to love ER people (if theyre willing to hire externally at all).
Everyone else is a bit hit or miss.
Hi, I am in ER at a somewhat highly rated but growing IB (make of that what you will). I will provide you with a new joiner's perspective.
Pros:
- You do get to do a lot of fundamental research. Depending on the resources at your firm, could range from a lot of different unique data points which can form your thesis etc.
- You get to learn a lot of the different intricacies for various sectors just by eavesdropping on other analysts' calls and reading their research notes, which I imagine would be helpful for exits too.
- You get responsibilities right away (especially if you have a boss who is willing to delegate more). And as you develop and get stock coverage, you basically try to build your own franchise, almost like an entrepreneur.
- You get to meet a lot of people (i.e. clients from HFs and LO AMs, activists, management teams etc.) especially if you stick around for the medium-long run.
Cons:
- Unlike buy-side, your work is not purely just research. In many ways you are kind of in sales. For example you have to market your research, try to win votes from the buyside (look up Extel surveys) and help with IPOs when you get one.
- (Might not be a con but an observation) A lot of the times, your valuation models do not matter as much. Its what your views are on the sector/stock. Nobody cares if your PT misses by 5% etc. What attracts clients to speak to you is your unique insight or maybe you were early into a debate etc. which links to the sales aspect of the job. Because you have no skin in the game, modelling probably does not matter as much as the buy-side. Obviously your insight and debates matter directionally for the stock but if you're in it for the numbers and models, sell-side ER is not it.
Any thoughts on research analysts choosing on whether to exit to the buy side or IR or some other role if they are feeling burned out/tired of modeling, but still want to be on a good track for comp growth and career advancement?
As a sell-side associate, I quickly realized if this is something I wanted to do on as a buy-side associate. Yes, the technical aspect is pretty similar, people model the same and read the same stuff. I can imagine the pressure needed to actually perform and not just write reports for the purpose of readership and marketing. Everyone knows that the day's of benchmarking are over, and when you're charging 2 and 20 only to under perform the SPX by a wide mile you're gonna feel the heat to actually set up your game and deliver alpha. I was deadset on going to the buy-side and was fully anticipating jumping to a long-only, but as I'm in the seat as a sell-side associate I've realized I would personally be my own analyst and stock pick as a personal passion rather as a profession. The hours, stress, and overall lifestyle is just not for me. Buyside and IR arent the only exit options. I know analysts that have left for family office, allocator, Corp Dev, VC, IB, etc.
It’s a fine career. I’d recommend people do IB over this in virtually all cases. Some get lucky / (are) smart enough to escape to the Buyside. Others are stuck in ER for ages.
I know a few director level ppl in ER at UBS/Barclays/Deutsche who are all in making 350k in their mid 40s.
That’s great comp but they live in NYC with a family (wife doesn’t work) so not really what I want at that age in this city.
At least if you’re in IB (and not good enough for Buyside) you can be closing in on 7 figs at that age.
And yes before you guys start saying “ohhh but biotech and top TMT analysts make millions— those seats are saturated and hard to get”
As someone who works in IB, I completely disagree. If I could have done it all over again, I would have started out in ER.
You’re way overestimating the number of people that end up making 7 figures in IB or who even stick around that long. In IB you’re either up or out.
You can’t keep clipping a $500K paystub as an IB VP for 10+ years. You have 4-5 years to make that cash and then you have to either move up to director and bring in revenue or get out to something else. It’s not like in IB you can be a 45 year old VP or whatever and stay there and just execute on deals.
PE is similar but even more competitive and arguably less comp versus IB at the junior level. I don’t have the exact stats but I’m sure at least 80%+ of those in IB/PE washout to something else (likely corporate) after a 10 year or so horizon.
Of course, like you allude to, ER is not a paradise by any means, but I’d say you learn a far more interesting skillset and even if you don’t go onto a HF/LO, the corporate exits tend to be IR which I think is far more interesting than adjacent IB corporate exits (corp dev, strategy, etc). Although unless I’m mistaken corporate level comp is ultimately the same across finance functions and progression can be iffy so it’s no perfect solution either.
Maybe I have the grass is greener syndrome or whatever but that’s my thoughts after several years and A2A in IB.
Ehhh maybe the grass is greener. I never did IB so dunno. I’m at a HF now and it’s significantly better than ER. But I’m not gonna sit around here and say it’s super meritocratic on making it to the Buyside at least in public equities.
Everything is luck. I just happened to be chosen for an interview. I’m sure if others in ER were given my opportunities they’d also be able to land a seat.
IB you can still move from VP at a BB to a director at a smaller shop… and keep doing that. In ER the job function is the same. Not to mention more IB seats. Yea maybe grass is greener but I would hate if I were in ER still.
The best part about the sell-side is that if you are motivated and committed you can become a top analyst at any shop. The downside is that if you are a coaster you are capped at 300-400k for the rest of your life. Depends which type of person you are.
only $300-400k? that's barely in the 97th percentile!
That is not true. There are a lot of factors going into becoming a top analyst, some are out of your controls. But that is life. As for the money, you can’t coast unless you work for a highly ranked analyst towards the later part of their career, has a big team, and is less interested in doing very deep research or maintenance work.
With excellent training, modeling reps, and exposure, SS ER can still be a good place to start. AI will replace some manual labor, but relationships and in-depth knowledge will always be important.
Ignore title, I work at a hedge fund and have 8 years of buy side experience. 90% of sell side analysts could be laid off and I wouldn’t notice or care that they’re gone. By that fact alone I would be surprised if sell side research pay and headcount are not lower in 5 years.
Touché lmao, I’ve been on SS ER for three years and have seen 90% of HF analysts laid off. Like shockingly high frequency, all 1-2 tenures and PMs too. These guys are smart so if they can’t hack it idk what makes the next pod better
SS ER more stable imo because of the IB / capital markets support
Fair point — I’ve heard that a lot from the buy side. That said, I think SS ER still serves a purpose. Even if the long-term trend is toward leaner teams and more automation, there’s still demand for good analysts who can synthesize info quickly and generate ideas for clients. The bar might just get higher.
I agree. That’s why I said 90% of sell side research is expendable. There’s about 10% who put out quality content that I will gladly pay for.
90% is a bit much, I’d say more like 70% are utter trash (20% are decent and 10% are exceptional). No doubt pay will be lower, esp as AI can fetch you the basic data points on earnings basic reporting way more quickly
The forums can make SS ER sound worse than it really is. It’s true that buy-side roles can offer more depth and direct investing exposure, but sell-side ER is still a solid starting point if you enjoy valuation, modelling, and learning how markets actually price companies. You’ll build a good foundation, develop a name with management teams, and get visibility with clients — all of which can help you move buy-side later if that’s the goal.
Hard to generalize. Depends on the broker (BB vs MM vs a few boutiques), your senior analyst and your industry. For that reason there’s a ton more of variability in SS ER vs IB or S&T in terms of overall experience and job satisfaction.
In my personal case as an higher level associate I’m looking to clear ~300k this year, but that’s just because I work for a top ranked analyst. Not the best sector though…so it tells you that the one biggest factor is who you do it for.
I will admit the job feels too salesy for research, but overall you get to do a ton of fundamental research.
Eveniet voluptatem dolorum tempore dolore harum necessitatibus. Quas quia neque voluptate ut nobis. Explicabo earum et quia temporibus. Nesciunt non id dolorem aut. Reprehenderit commodi facere nobis asperiores.
Doloremque laboriosam dolorem sunt a. Et error voluptas sunt est aut.
Qui soluta est molestias. Molestias impedit earum tenetur rerum ex sed odio. Dolorum et et non quaerat praesentium. Delectus consequatur aut quia quibusdam et. Non accusantium ea eius est aspernatur adipisci placeat. Delectus est dignissimos in eius unde iure.
Ullam quo a incidunt aspernatur itaque ut. Aut sint et molestias et explicabo architecto vel. Sed eaque repellendus nam ab et nobis.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Est fugiat sunt eveniet quia itaque sed. Quam incidunt culpa dolorem voluptas totam optio autem. Voluptatem tempora repellendus veniam accusantium vero.
Quibusdam adipisci qui voluptas doloremque perspiciatis enim ut. Eum ducimus et reprehenderit iusto sunt quia. Non nobis id est sint exercitationem deleniti.