Leaving Equity Research
Hi all. Wanted to get some views from ppl in the business on career path-ing.
Bit about me, I was an accountant, went to a shitty grad school, lucked out by breaking into BB (lower tier) ER and have been at it for about 5ish years give or take. Money is decent (~250 all in) but hours are crappy. I have the general worries of MiFID and fee pressure taking away even the money bit. I wouldn't see myself as having a shot at coverage for at least the next two years due to the specific situation / firm i'm in and that's assuming the environment doesn't get materially worse from here.
A friend of mine in industry is recruiting for a role (also based in NYC) and without getting into details since I don't want to out myself, the job would be super easy (punchin, punchout 40 hours a week and not a second longer) but comp would take a massive hit (all-in i'd only make ~150, probably a little less) but this is offset by good benefits and extremely high job security (business is pretty uncorrelated with general economic cycle); wouldn't really have any exit options but sticking it out as a lifer is a realistic option unlike my current job.
I guess to sum it up, what do you guys think - would you quit your ER gig for the career version of a AAA corporate bond that pays 150k + COL adj for the rest of your life? If not, how much would you guys want?
My $0.02 as someone who did this over the past year. Think long and hard about what you want to do longer term and how you can position yourself to get there.
I spent 10 years in equity research at a small boutique shop. First five years were amazing, second five - not so much. We got acquired by a big bank that destroyed the culture, the sector we specialized in was out of favor, and then pile on all the industry specific issues with MiFID, etc... the environment got toxic and the outlook was not good. People started getting laid off, people started leaving, and I knew I had to figure out what I was going to do with the rest of my life.
So I decided to make the jump. I could've stayed in ER for a few more years I'm sure and put some more money in the bank, but I have another 20-30 years of working life in me and I knew full well I wasn't going to do ER until then. On top of that, I felt like I was spinning my wheels in ER and sticking around longer wouldn't have gotten me any closer for a move to the corporate side, which is what I decided I ultimately wanted to do.
I left the firm in January and started in investor relations for a company in the industry I covered as an associate. I took a little bit of of a pay cut vs. what I made last year, but honestly with the way things were looking there's no way to say that even what I made last year would have been sustainable. I saved most of my bonuses and we lived below our means anyway, so our lifestyle isn't going to change at all, I just might put a little bit less money in the bank this year.
So far I love it. All the stress and anxiety that I used to have about work is gone. I'm enjoying the work, I'm actually learning things again and for the the first time in a while I feel like the work I'm doing is valued and appreciated. I can see myself moving up here, but if not, I'll get a lot more tangible experience that will help me get another position at another company.
For me, personally, getting out of ER was a great decision. I honestly probably should have done it sooner, but there was always the hope things would get better until they didn't. Point is, don't get too hung up on the first year cut in pay. Depending on what you do you could potentially make that up pretty quickly, and it's hard to put a value on your own personal happiness and stability you could get from moving out of ER.
If you don't get coverage, it's a dead end job. I think you should explore other professions, you have a very solid set of skills that are transferable. You just have to message very clearly that what value you bring to this new profession because people don't really know what exactly day-to-day is like on the sell-side (all the shit you have to deal with on a daily basis), other than the part where people go on CNBC to talk about shit stock "ideas".
I am totally with you on the work life balance. I echo what researchindatsouth says about not worrying about the first year pay cut. It's all about the life-time value of a profession.
Don't do it, especially if you have a family. See if you can either make it higher within the organization or jump to a different one. If you are going to change it up find something that gives you either better hours and same pay, same pay but more power or honestly more power and more pay(if possible). If you can't stand it like you would end it all right now then yes leave but if not.. cheaper to keep her..eerhm.. it. Not worth the loss in money, goodness.
Hi Everybody. Thanks to everyone who gave feedback. I haven't responded here because I was thinking through my options but I read through all the advice you guys gave.
Since everybody took the time to respond here, I owe it to you all to let you know how things shook out. I'm leaving the industry for this new gig but I was able to negotiate my way closer to all-in comp of ~170 (when measured on a like for like basis vs my ~250) plus some other ancillary benefits that are probably worth 15k-20k in pre-tax value.
For anyone else going through a similar situation, my primary considerations (roughly ordered in most to least important) were 1) Fee Compression / MiFID; 2) Asshole boss / coworkers / flaky firm; 3) the extra 20 pounds i'm packing since 'breaking into finance'; 4) 70-80hr work weeks during non-earnings seasons. The main (only) counterweight of course being the ~33% hit to comp.
But after I thought about it, life's too short and 170k is decent coin. I think we lose sight of things between classic b-school training (where all our case studies are dealing with millions if not billions of dollars), sites like WSO (the land of eternal optimism and survivorship bias), and the idea that Wall Street is at all a 'normal' place (of the three senior analysts i've worked with, one is divorced and drinking himself to an early grave, another is probably close to divorce, and the last guy probably can't qualify for a car loan despite making 1M+).
And so my watch has ended.