BB vs MM research role in Post-MIFID Environment

Hi Everyone,

Wanted to get insight on which one was a better move for an ER associate, especially in a post-MIFID world?

1) working under a II-ranked analyst at a MM whose an MD

2) working under a lesser known and probably worse analyst at a BB whose an ED

The sector-attractiveness is roughly the same. My thought process is that working at the BB would be better given the current landscape, as there is less chance of comp decline and higher job security. Plus there is always the possibility of working with another analyst if this one gets canned. Any thoughts?

 

Tough one to answer... when you say MM you don't mean the boutiques? If it was a boutique like Exane/Bernstein/Evercore then 100% take that over BB, but I understand your predicament. Also, could you elaborate on "II ranked"? There's a difference between being a Runner Up (e.g. 6th) and top 3.

 
Best Response

This is a tough decision and will actually depend a lot on what specific MM and BB you're referring to and their associated strategy with cash equities.

Some BB are pulling out a lot in the markets business in general due to low ROIC and not even being junior can save you from a layoff. II votes are going to matter A LOT in the next 2-3 years because it's the only universal measure for how valuable analysts are. Remember, we're only 1 quarter through MIFID II and this quarter is a grace period. None of the asset managers have yet to swallow the bill behind the cost of research but once they do, it'll be bad and likely worsen if industry performance doesn't pick up (asset managers are currently in a cost cutting period to lower fees amid underperformance and flight to passive).

This is obviously based on very limited information but I would personally choose the II ranked guy in the middle market firm. In my view, especially in ER, it's safer in today's environment to bet on the analyst than the firm. Your analyst is still marketable and you have good odds of being brought along with him if he gets poached by a shop with a bigger budget. Moreover, you'll get experience from someone who knows what he's doing.

It's easier to present yourself as having solid experience if you stick with an analyst in an industry even though you may have to jump firms vs being at a BB and having to switch teams/industry because your analyst got cut.

What makes this decision so tough is that the sell-side really has no clue what the landscape will look like in a Mifid II world even though we're starting to live it already, and that's because the buy-side has no clue how much they'll cut until they have some time to swallow the fact they spent $500/hr talking to an analyst.

Created a 1-step skincare solution for men. Purchase + reviews appreciated: www.w34th.com
 

Inventore ad similique temporibus ex voluptatem vitae praesentium. Pariatur harum asperiores quasi qui amet qui. Sint deserunt iusto sint non sint qui. Molestiae ex autem ea delectus.

Non libero nemo voluptates aut voluptas et in sit. Pariatur et et libero. Iste porro ut voluptates libero aut et sequi delectus. A aliquid eligendi labore dignissimos ut laborum. Et molestiae accusantium ea distinctio eos incidunt a incidunt. Magni nihil maiores a voluptas.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
dosk17's picture
dosk17
98.9
6
DrApeman's picture
DrApeman
98.9
7
kanon's picture
kanon
98.9
8
CompBanker's picture
CompBanker
98.9
9
GameTheory's picture
GameTheory
98.9
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”