What The EFF?

edit: okay, I'm getting a better idea of how things work, but I'm still a little bit confused.

Do equity researchers work with the S&T team? Or is there a separate group for institutional sales and traders?

Would this be an acceptable answer to number 3?: 1. Clients(institutional investors), 2. Bank(internal sales/trading team), 3. Companies you cover. Because you want to provide the best possible research for clients to drive sales for your bank's products. With quality work, not only will you be able to advance your career as a high ranking researcher, but you will create more commissions (better bonus).

I'm still confused as to how there isn't conflicts of interest:

  1. Companies in your sector push you to do buy rating or they will not talk to you.
  2. Bank pushes you to to buy/sell rating to benefit their own traders.

Sorry if I'm being totally dense about this..


I think someone of these questions have been answered before, but I was unable to find it through the search function..

  1. What is the business model of sell-side research?
  2. What is the business model of buy-side research?
  3. Rank the 3 in order of importance: companies you cover, clients, or internal trading/sales team (i think this is a common interview question and I'm not remembering it exactly.
  4. Isn't it a conflict of interest for equity researchers to push bank's products by giving them a buy rating?

What I want to know is how does sell-side research work. Who makes up the business model and what is equity research's incentive to each of them?

I know that researchers create a report for bank's clients to buy products from them and the commission is split between sales/research. But that's all I know..

I would truly appreciate the insight. Thanks in advance!!

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