Institutional Sales Analyst Job Description and Overview

For many, institutional sales offers the best of all worlds: great pay, fewer hours than in corporate finance or research, less stress than in trading, and a nice blend of travel and office work. Like traders, the hours typically follow the market, with a few tacked on at the end of the day after the market closes. Another plus for talented salespeople is that they develop relationships with key money managers. On the downside, many institutional salespeople complain that many buy-siders disregard their calls, that compensation can exhibit volatile mood swings, that they are overeducated for what they do, and that constantly entertaining clients can prove exhausting.

Different Jobs in Institutional Sales

Sales assistants: This position is most often a dead-end job. Sales assistants take on a primary clerical role on the desk. Handling the phones, administrative duties, message taking, letter writing – there's nothing glamorous for the assistants.

Associates: The newly hired MBA is called an associate, or sales associate. Like analogous associates in other investment banking departments, a sales associate spends a year or so in the role learning the ropes and establishing himself. Associates typically spend one to two months rotating through various desks and ensuring a solid fit between the desk and the new associate. Once the rotations end, the associate is placed on a desk and the business of building client relationships begins.

Salesperson: The associate moves into a full-fledged salesperson role extremely quickly. Within a few months on a desk, the associate begins to handle "B" accounts and gradually manages them exclusively. A salesperson's ultimate goal is the account at a huge money manager, such as Fidelity or Putnam, that trades in huge volumes on a daily basis. Therefore, a salesperson slowly moves up on the account chain, yielding B accounts to younger salespeople and taking on bigger and better "A" accounts. Salespeople usually focus by region. For example, an institutional equity salesperson will cover all of the buy-side firms in one small region of the country like New England, San Francisco, or Chicago. Many salespeople cover New York, as the sheer number of money managers in the City makes for a tremendous volume of work. Salespeople work on specific desks on the trading floor next to traders. Because so much of their work overlaps, sales and trading truly go hand-in-hand. Here's a look at how a trade works from the sales perspective:

The Life of the Trade: The Sales Perspective

The salesperson has a relationship with a money manager, or an account, as they say. Suppose a research analysts initiates coverage of a new stock with a Buy-1 rating. The salesperson calls the portfolio manager (PM) at the account and gives an overview of the stock and why it is a good buy. The PM will have his own internal research analyst compile a financial model, just as the sell-side research analyst has done, but likely with slightly different expectations and numbers. If the portfolio manager likes the stock, he will contact his trader to work with the trader at the investment bank.

  1. Sell-side research analyst initiates Buy-1 coverage of stock XYZ.
  2. Institutional salesperson listens to analyst present stock at morning meeting.
  3. Institutional salesperson understands key points of stock XYZ and calls the portfolio manager (PM) at the buy-side firm.
  4. Salesperson pitches stock to PM.
  5. PM talks to her internal analyst and discusses potential purchase.
  6. Analyst performs analysis on company XYZ and gets back to PM with a recommendation to buy.
  7. PM calls institutional salesperson, and indicates his desire to buy the stock, also indicating how many shares. .
  8. PM contacts his own internal trader, who calls the investment bank's trader to give the official order. .
  9. The sell-side trader works the order as described in previous chapters.

Institutional Sales Involvement in an IPO

Corporate finance investment bankers would argue that the salesforce does the least work on an IPO and makes the most money. Salespeople, however, truly help place the offering with various money managers. To give you a breakdown, IPOs typically cost the company going public 7 percent of the gross proceeds raised in the offering. That 7 percent is divided between sales, syndicate and investment banking (i.e. corporate finance) in approximately the following manner:

  • 60 percent to Sales
  • 20 percent to corporate finance
  • 20 percent to Syndicate

(If there are any deal expenses, those get charged to the syndicate account and the profits left over from syndicate get split between the syndicate group and the corporate finance group.)

As we can see from this breakdown, the sales department stands the most to gain from an IPO. Their involvement does not begin, however, until a week or two prior to the roadshow. At that point, salespeople begin brushing up on the offering company, making calls to their accounts, and pitching the deal. Ideally, they are setting up meetings (called one-on-ones when the meetings are private) between the portfolio manager and the management team of the company issuing the offering. During the roadshow itself, salespeople from the lead underwriter often fly out to attend the meeting between the company and the buy-side PM. While their role is limited during the actual meeting, salespeople essentially hold the PMs' hands, convincing them to buy into the offering.

Institutional Sales Sample Routine

The institutional salesperson's day begins early. Most arrive at 7 a.m. having already read the morning papers. Each day a package of research is delivered to the salesperson's chair, so reading and skimming these reports begins immediately. The morning meeting at 7:30 involves research commentaries and new developments from research analysts. The trading meeting usually begins 20 minutes later, with updates on trading positions and possible bargains for salespeople to pitch.

At 8 a.m., the salesperson picks up the phone. Calls initially go the most important of clients, or the bigger clients wishing to get a market overview before trading begins. As the market approaches the opening bell, the salesperson finishes the morning calls and gets ready for the market opening. Some morning calls involve buy or sell ideas, while others involve market updates and stock expectations. At 9:30, the markets open for business, and salespeople continue to call clients, scrutinize the market, and especially look for trading ideas throughout the day.

Lunchtime is less critical to the salesperson than the trader, although most tend to eat at their desk on the floor. The afternoon often involves more contacting buy-siders regarding trade ideas, as new updates arrive by the minute from research. The regular session of the major markets close abruptly after 4:00 p.m. By 4:01, many salespeople have fled the building, although many put in a couple more hours of work. Salespeople often entertain buy-side clients in the evening with ball games, fancy dinners, etc.

institutional sales jobs: A Day in the Life

Here's a look at a day in the life of a sales associate in the Fixed Income division at Bear Stearns in New York.

  • 6:45 - Get to work. (I try to get in around 6:45. Sometimes it's 7:00)
  • 6:50 - After checking e-mail and voice mail, start looking over the Wall Street Journal. (I get most of my sales ideas from The Wall Street Journal. I'd say 70 to 75 percent of my ideas. I also read the Economist, Business Week, just for an overview, some Barron's and the Financial Times. Maybe three issues out of the five for the week for FT)
  • 7:15 - Start checking Bloombergs, getting warmed up, going over your ideas and figuring out where things stand.
  • 7:45 – Meet with your group in a conference room for a brief meeting to go over stuff. (We go over the traders' axe [what the traders will focus on that day], go over research, what the market quotes are on a particular issue)
  • 8:15 – Get back to desk, and get ready to start pitching ideas
  • 9:15 – Have a short meeting with your smaller group.
  • 10:00 – One of your clients calls to ask about bonds from a particular company. You tell him you'll get right back to him. Walk over to talk to an analyst who covers the company. (I'm in contact a lot with my analyst. I listen to my analyst.)
  • 10:15 – Back on the horn with your client
  • 12:30 – Run out to lunch with another salesperson from your group. (We often buy each other lunch. Sometimes to celebrate a big deal we'll order in lunch. We usually go to Little Italy Pizza Place, or Cosi's Sandwiches. It's always the same people, and it's always the same six places.)
  • 1:00 – Back at your desk, check voice mail. (If I leave for 30 minutes or so, when I get back, I'll have five messages.)
  • 2:00 – One of your clients wants to make a move. (I trade something every day. Maybe anywhere from one to 10 trades. It's on a rolling basis. You plant seeds, and maybe someday one of them grows into a trade.
  • 3:15 – Another client calls in and wants to place an order.
  • 5:30 – Still on the phone. (Although the markets close, that's when you can really take the time to talk about where things are and why you think someone should do something.)
  • 7:30 – Head for home, you're meeting a client for a late dinner. (Often on Thursdays we go out as a group.)

What Makes an Equity Sales Person Successful?

Early on, new associates must demonstrate an ability to get along with the clients they are asked to handle. Usually, the first-year sales associate plays second string to the senior salesperson's account. Any perception that the young salesperson does not get along with the PM or buy-side analyst means he or she may be immediately yanked from the account. Personality, the ability to learn quickly and fit into the sales group will ensure movement up the ladder. The timing of the career path in sales, more so than in corporate finance, depends on the firm. Some firms trust sales associates quickly with accounts, relying on a sink-or-swim culture. Others, especially the biggest I-banks, wait until they are absolutely sure that the sales associate knows the account and what is going on, before handing over accounts.

Once the level of full-on salesperson is reached (usually after one year to one-and-a-half years on the desk), the goal shifts to growing accounts and successfully managing relationships. Developing and managing the relationships at the various buy-side firms is especially critical. Buy-siders can be thought of as time-constrained, wary investors who follow a regimented investing philosophy. Importantly, salespeople must know how and when to contact the investor. For example, a portfolio manager with a goal of finding growth technology stocks will cringe every time a salesperson calls with anything outside of that focused area. Therefore, the salesperson carefully funnels only the most relevant information to the client.

Promotions depend on a combination of individual performance and desk performance. The ability to handle relationships, to bring in new clients, and to generate commission sales for the firm are paramount. Those that have managed to join the ranks of institutional sales without and MBA may be at a disadvantage when it comes to promotions into management roles.

Check out another thread on this topic on WSO.

*Mod Note: This is an excerpt of a description of the sales role from the vault guide (which is no longer in print)

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Comments (11)

Aug 17, 2010 - 12:11am
pds, what's your opinion? Comment below:

Thanks a lot for this post, very detailed. I'm assuming you're in sales - what kind of tips would you give for an analyst entering FI Institutional or Corporate Sales? Such as how to excel quicker and gain responsibility sooner. As well as how to get better at pitching the ideas.

Aug 17, 2010 - 9:26am
1.21 gigawatts, what's your opinion? Comment below:
Thanks a lot for this post, very detailed. I'm assuming you're in sales - what kind of tips would you give for an analyst entering FI Institutional or Corporate Sales? Such as how to excel quicker and gain responsibility sooner. As well as how to get better at pitching the ideas.

This is from the vault guide which are tough to get now since they are out of print. Getting better at pitching ideas comes primarily from understanding the product and understanding what the buyside is looking for and why your specific idea will make money. The best way to excel on the desk is to get the trades, particularly in the beginning from accounts that haven't paid much in the past (or if you get them to pay more etc)

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Aug 17, 2010 - 9:29am
futures trader man, what's your opinion? Comment below:

Institutional Sales, Where to Begin? (Originally Posted: 03/21/2013)

Hey guys, I have recently taken an interest in Institutional sales and began e-mailing all the local boutique firms around where I live to see if they would offer internships. I soon discovered the fact that most if not all, of these firms didn't offer internships at all, which left me thinking... where should one look for internships in sales, and where does a career in institutional sales normally begin? Is the career path similar to IB? i.e (boutique intern->BB intern->BB full time offer) Any help on this topic would be greatly appreciated.

"Well, you know, I was a human being before I became a businessman." -- George Soros
  • 1
Best Response
Aug 17, 2010 - 9:30am
ironlawofoligarchy, what's your opinion? Comment below:

Most, if not all, FT Institutional Sales offers at BBs are extended to their BB summer interns. With that, the best way to land a BB Institutional sales roles is still to rotate within the dept during your summer analyst stint at that very bank. I would be shocked if someone who wasn't part of the summer intern class of a given bank/or possibly another BB would be extended a FT over. That being said, it does happen. If you are junior enough in the businnes transitioning into Institutional Sales is very possible although unlikely as you are competing with past summers intern class (HR puts successful placement of these interns as a high priority).

If you are still in school, gain the experience via internships (wealth managmenet helps for client relationship skills) and make it a goal to land a summer analayst role. After that you have to wow the sales desks you rotate on and you may have a shot at recieving a FT offer.

If you are junior and working on the buy side or in a comparable role this is much harder and the move used to be much more prevalent than it is now. The reality is that there is a lot of supply in terms of candidates (many internal) and limited and shrinking demand for junior positions (analaysts/associates) as the business itself is in a consoldiont/shrinking phase.

The business itself is in complete restructuring mode so an easy way in doesn't exist, although it never really has.

Nice guys may not finish last but they sure don't finish first. Loyalty is not rewarded, it's taken advantage of. 

  • 3
Aug 17, 2010 - 9:31am
harkkam, what's your opinion? Comment below:

Institutional Sales, does it involve prospecting? (Originally Posted: 06/22/2012)

The retail side, the broker, involves lots of cold calling and networking to meet new clients, does that translate into the institutional side?

Or do firms already have relationships established with buy side firms and need you to simply manage the relationships and pitch ideas so trades are made.

Basically asking do institutional sales reps have to do any prospecting or are clients given to them?

Aug 17, 2010 - 9:32am
TraderDaily, what's your opinion? Comment below:

If it's a reputable firm, starting out, as I understand it, you would have accounts assigned to you and as you progress, bigger and bigger accounts are assigned to you.

If you're an experienced hire, they want you to bring your own client book of money managers covering a territory, i.e. Mid-Atlantic region.

Aug 17, 2010 - 9:33am
harkkam, what's your opinion? Comment below:

What about a sales trader that works on a sales desk and shouts orders to traders, does he have a book given to him over time or does he have to prospect for them as well?

Aug 17, 2010 - 9:34am
Derivs, what's your opinion? Comment below:

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