3/2/11

Hey guys,

Just wondering what a first year equity research associate (straight out of undergrad) makes at Fidelity Investments. Supposedly it's competitive with IBanking, but some actual numbers would be greatly appreciated.

Thanks!

Comments (55)

3/2/11

In London it's PS38k pounds a year base.

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3/2/11

How about for Boston?

3/2/11

No idea. The issue is that Fidelity in London is Fidelity International, whereas Fidelity in Boston is just Fidelity (FMR LLC) They are two separate legal entities, so the salaries may not be the same. My best guess would be that it is $60k base a year, based on GPBUSD rate today...

3/2/11

I think it is a little higher $65k - $70k base, I have a few friends that work there. Word of caution is that bonuses have been almost non-existent the past several years with the market down.

3/3/11

i think around 65-70k base with 5k signing and 10-15k bonus

3/10/11

I'd love to know the figure as well.

4/2/11

Hmm... how difficult would you say it is to get an internship or full-time offer out of undergrad?

4/2/11

In their London office, circa 1300 people applied for 4 ER interns for this summer.
So quite tricky. Last round interviews are intense.
I'd guess that full time is about the same.

4/2/11

they don't really hire undergrads.... buy-side firms aren't BB's with a ton of positions, there are usually 1-2 available each year and maybe 2-3 available for graduates

does that sound right putcall?

whats the bonus like in europe? here it's still low... only around 15k

4/2/11

From a reliable source: there are 8 undergrad interns and 7 graduate interns this summer. Not sure about full time though.

4/3/11

id love to work for fidelity

4/3/11

@lifesgreatmystery
Yes they do hire undergrads, but you have it right on the number of positions. There are low single digit numbers of positions each year, 3 or 4 for Fidelity in London. They're not large BB class sizes, because buyside firms tend to be smaller anyway...
Happyness is probably right as well, but I assume you're talking about US, not UK?

Bonus numbers have been low the past couple of years for obvious reasons, haven't got this years figure yet.

4/3/11

Yeah, that's for US. I'd think that there would be more there than anywhere else.

4/3/11

putcall how long have you been at fidelity? do people lateral to competitors (not sure about competitors in London, but in the U.S. - Wellington, Capital Group, and the likes) after a few years?

4/3/11

Do interns typically get asked to join for full-time?

4/4/11

Have been there a couple of years on the ER side. Yes some people do lateral in and out, but not many at all. The turnover is extremely small compared with BBs. As for where they go, other buy side firms, HFs, that's about it. The program at Fidelity is that you do a certain sector for 1.5 / 2 years and then you have a chance to rotate.

Interns can and do get asked to join FT. But it's certainly not a given. You really have to impress as a SA. As there are only a single digit number of SAs a year, it comes down to individual cases, there's no rule as to what percentage they invite back. In past years it has been as high as 100% and as low as 0%.

4/4/11
putcallparity:

Have been there a couple of years on the ER side. Yes some people do lateral in and out, but not many at all. The turnover is extremely small compared with BBs. As for where they go, other buy side firms, HFs, that's about it. The program at Fidelity is that you do a certain sector for 1.5 / 2 years and then you have a chance to rotate.

Interns can and do get asked to join FT. But it's certainly not a given. You really have to impress as a SA. As there are only a single digit number of SAs a year, it comes down to individual cases, there's no rule as to what percentage they invite back. In past years it has been as high as 100% and as low as 0%.

For the people who lateral in, I guess they usually come from other buy-side firm. But have you seen people joining from the sell side, and if so, at which career stage? (2-3 year juniors vs very experienced people)

Thx.

4/6/11
putcallparity:

Have been there a couple of years on the ER side. Yes some people do lateral in and out, but not many at all. The turnover is extremely small compared with BBs. As for where they go, other buy side firms, HFs, that's about it. The program at Fidelity is that you do a certain sector for 1.5 / 2 years and then you have a chance to rotate.

Interns can and do get asked to join FT. But it's certainly not a given. You really have to impress as a SA. As there are only a single digit number of SAs a year, it comes down to individual cases, there's no rule as to what percentage they invite back. In past years it has been as high as 100% and as low as 0%.

Why do they have an internship program, if they sometimes don't invite any interns back? I'm sure it's not a money maker.

By the way, thanks for all the great info.

4/6/11
happyness:
putcallparity:

Have been there a couple of years on the ER side. Yes some people do lateral in and out, but not many at all. The turnover is extremely small compared with BBs. As for where they go, other buy side firms, HFs, that's about it. The program at Fidelity is that you do a certain sector for 1.5 / 2 years and then you have a chance to rotate.

Interns can and do get asked to join FT. But it's certainly not a given. You really have to impress as a SA. As there are only a single digit number of SAs a year, it comes down to individual cases, there's no rule as to what percentage they invite back. In past years it has been as high as 100% and as low as 0%.

Why do they have an internship program, if they sometimes don't invite any interns back? I'm sure it's not a money maker.

By the way, thanks for all the great info.

Good point - I hear interns cover like 3 stocks total over the summer. Plus there's a whole lot of mentoring involved. Sounds like a long-term investment, no?

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4/4/11

There are a number of people at Fidelity that have come from the sell side. One guy worked for Evercore for a year then switched, one of the MDs did over a decade at MS (IM though, not really sell side), another used to work at Cazenove. Another has joined from Bain at MD level. So both ends of the spectrum are possible, and it's not just the sell side that people join from. One thing that Fidelity in particular does not like to hire external PMs, the vast majority are home grown. So if that's what you are getting at, then it's best to switch to the buy-side earlier in your career.

Of course the down side of being on the sell side early is that you can get overshadowed by PMs/star analysts who can dominate what you get to do. You may also find you specialise quickly, and that you become pigeon holed. I don't really buy this though. You're much more likely to make a name for yourself if you become the top analyst for a particular sector, rather than having to cover all sectors.

4/4/11
putcallparity:

Of course the down side of being on the sell side early is that you can get overshadowed by PMs/star analysts who can dominate what you get to do. You may also find you specialise quickly, and that you become pigeon holed. I don't really buy this though. You're much more likely to make a name for yourself if you become the top analyst for a particular sector, rather than having to cover all sectors.

Are there "sector specialists" at Fidelity or do most people cover a wide range of industries?

-Being the top analyst on the sell side is surely a massive pump to your ego -and wallet-, but most are MDs with a zillion years of experienced... and who don't really have a life outside covering their sector.

4/4/11

You can become a sector specialist if you want, but there is no compulsion to do so.
It boils down to whether you want to be a PM or an MD in ER really.

If you want to do PM, then rotating through 3 different sectors every 2 years will set you up nicely. Demonstrating that you can apply yourself to multiple sectors/situations is vital.
However, if you want to climb the ranks in ER, specialising in say small-cap Europeans, and sticking with that is likely to help, as everyone will turn to you if they have an investment idea that falls into your lap.

You have to understand that buy-side and sell-side research are VERY different games. I talk to PMs every single day about my ideas. How many analysts on the sell-side do that? Not many. Sell-side research is there to help the Sales guys (not completely, I know, but mostly). Buy-side research (especially in house research) is designed specifically to promote an investment thesis. You might say that's the same as sell-side research, but the process between an analyst writing a note and a stock being bought or sold because of it is far more disjointed on the sell-side than on the buy side.

4/4/11

Putcall,

Thanks for all the great information. It sounds like Fidelity has an amazing program.

How often do headhunters/HFs try to poach talent from you guys? More importantly, why do people choose to stay?

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4/5/11
KarateBoy:

Putcall,

Thanks for all the great information. It sounds like Fidelity has an amazing program.

How often do headhunters/HFs try to poach talent from you guys? More importantly, why do people choose to stay?

No problem.

HHs/HFs do try to poach talent, but it's not on a regular basis. (i.e. not like the PE guys who poach analysts on a yearly basis) HFs in general take on people as they need them, not to fit in with any recruitment cycle. Also, they take on people with proven track records, who are going to be circa 4/5 years into their careers at least.

Having said that, it is rare to see a PM jump ship to a HF. More likely is that they might start their own, but this isn't as common as you might think. A couple of reasons for this: at larger buyside shops (of which Fidelity is one), PMs can manage a wider range of funds, as a typical hedge fund is not going to have an equivalent breadth of strategies. Also, these guys have been doing long only portfolio management for most of their careers. If they are good, they can get paid just as much as the HF guys. (Maybe not in a bear market...) HFs that I have experienced have a different culture to the long only shops. The difference is subtle, but definitely noticeable. So I would say that one reason people choose to stay is that jumping to a HF once you're a PM is a change in style that doesn't suit everyone. Of course if you are still doing ER, then switching can seem more alluring.

But a word of warning: you can switch to soon. There are many people on this forum who hold HFs aloft as THE place to work on the buyside. Yes this can be true, if you are a HF manager, i.e. at the top of the pile. Joining too soon means that a), Your training will be cut short (HFs don't have the inclination/size to train analysts to the same degree that the large buyside firms do) and b). You could get trapped where you are. You're not going to get promoted beyond senior analyst/ assistant PM, unless you can start your own fund at your HF. At HFs, everything is more informal than at larger AM firms. By joining a HF early in your career, you risk staying where you join for longer than you would in an AM firm. There is certainly illiquidity to your career within your HF. Of course, if you demonstrate to your HF manager that you are the bee's knees, then you can be promoted, but the path is less certain that at a large AM firm.

4/6/11

So what would the career path be for someone at Fidelity coming straight out of undergrad? I understand the starting position in ER would be "equity research associate." From that point, would Fidelity promote you to analyst directly, or would you have to get an MBA first?

Also, how would one go about getting an internship at Fidelity...?

Thanks!

4/8/11
blackopsmonkey:

So what would the career path be for someone at Fidelity coming straight out of undergrad? I understand the starting position in ER would be "equity research associate." From that point, would Fidelity promote you to analyst directly, or would you have to get an MBA first?

Also, how would one go about getting an internship at Fidelity...?

Thanks!

I can give some insight into the internship recruiting process for Boston. I think most of the recruiting is done through OCR at a handful of schools (see the list at https://jobs.fidelity.com/investment/underGradCale...)There are first round interviews at the target schools, which were mostly fit) and then second rounds at the office in Boston, which was a combination of fit/market awareness/stock pitching/cases on specific companies. The interviewers were a combination of analysts, pms, and research heads. I think that there were multiple superdays over a few weeks. Most of the people at the superdays were juniors, but some sophomores also made it through, which I thought was interesting.

4/6/11

you apply?

im sure some people get CFA's and can move up to analyst in a few years

Best Response
4/6/11

Career path is:
ER associate --> Senior ER associate --> Junior analyst --> Senior analyst --> Head of Research (or some geographic/sector derivative)
Or if you want to be a PM:
ER associate --> Senior ER associate --> Junior analyst --> Assistant PM --> PM --> Senior PM / CIO
Titles will depend will depend on which firm you work for.

MBA is not nearly as popular or required on the buyside, especially in the UK. As lifesgreatmystery notes, everyone will do the CFA in their first 3 years. Most people also take the IMC.

As for getting an internship, you apply online as for every other internship program. Interview process in UK is: online form, online numerical test, 1st round phone interview (with HR), final round assessment centre (which comprises a stock test, a maths test, and then 4 interviews in the afternoon).

4/6/11

Putcall,

Thanks again for the info. I'm on the sell-side right now and I always enjoy hearing stories from people like you.

As you mention, I realize that there is a risk in moving to a HF too soon and plan on staying in at my firm for the training.

Could you ball park some of the salaries+bonus potential of these positions? Also, I thought that mutual funds cannot pay for performance - just AUM - so how can some people make as much at a large AM as they can a HF?

putcallparity:

Career path is:
ER associate --> Senior ER associate --> Junior analyst --> Senior analyst --> Head of Research (or some geographic/sector derivative)
Or if you want to be a PM:
ER associate --> Senior ER associate --> Junior analyst --> Assistant PM --> PM --> Senior PM / CIO
Titles will depend will depend on which firm you work for.

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4/8/11
KarateBoy:

Putcall,

Thanks again for the info. I'm on the sell-side right now and I always enjoy hearing stories from people like you.

As you mention, I realize that there is a risk in moving to a HF too soon and plan on staying in at my firm for the training.

Could you ball park some of the salaries+bonus potential of these positions? Also, I thought that mutual funds cannot pay for performance - just AUM - so how can some people make as much at a large AM as they can a HF?

Ok, here are some salary/bonus figures. All in GBP.

ER associate - 35k-40k base + 5k-10k bonus
Senior associate - 60-70k + 20-30k
Junior analyst - 90-100k + 20-50k
Senior analyst/head of research - 100-150k + 50-150k
PM - 125-175k + bonus that is entirely dependent on fund performance

Please bear in mind that these figures will depend on market conditions, which shop you work for, your previous experience etc., so please don't take them as gospel.

Mutual funds certainly can and do pay their PMs for performance. Performance pay for PMs makes up 90% of their all in comp in good times. Clearly all firms guard their performance bonus algorithm, but PMs are definitely paid for performance, even more than AUM. This is why they can earn PS2m + a year. This gets you in the same ball park as some of the HF guys. Ok, they're not going to challenge the top quartile of HF managers, I'll admit.

@wannabedude: Yes, I do know people that have lateraled from research houses (more prevalent in the US than in Europe). The issue is that, especially for Fidelity, they want people with experience of pitching to PMs every single day. I'm not 100% sure what the process is for pitching reports to buyside for research shops, but I don't think it is as intimately related with PMs as a buyside gig is.

4/6/11

Very useful info, thanks putcall

4/6/11

@happyness: They've only invited no-one back once, in 2008/2009, when equities tanked and all majority long only AM shops lost a large chunk of AUM. So that wasn't so much to do with the quality of their interns, but rather the environment in which they were operating wasn't conducive to hiring an associate class that year.

But in general, as blackopsmoney notes, it is an investment of time and money in their intern class. However, it is an even-longer term investment in hiring someone for FT. Keep in mind that Fidelity's employee churn rate is low. Hiring someone is a big decision. If they don't think you are good enough over the summer, they are going to try to find someone else. Think of your internship as a 9 week interview for FT. Also, because there are only circa 4 interns in the London office each summer, trying to draw a trend as to how many their hire for FT each year is largely futile. As I said before, it comes down to each individual intern.

4/6/11

Putcall, are there many candidates stemming (laterals) from research houses (ie bernstein, mckinseys, morningstar) ?

4/8/11

just for your info, 35-40 gbp = 60-65k USD base, for first years

4/9/11

so what would the day-to-day be like for a research associate? Do they assist analysts with research (the way sell-side works, I'm told), or do associates actually get their own stocks to track?

Also, how much value would you say junior people add at a buy-side firm? How does one tell a great research associate from a mediocre one (or a great intern from a mediocre one, for that matter).

4/10/11
blackopsmonkey:

so what would the day-to-day be like for a research associate? Do they assist analysts with research (the way sell-side works, I'm told), or do associates actually get their own stocks to track?

Also, how much value would you say junior people add at a buy-side firm? How does one tell a great research associate from a mediocre one (or a great intern from a mediocre one, for that matter).

Yes, associates do have their own stocks to track. Depending on whether you are doing small or mid caps to begin with, you could have between 20 and 200 stocks to analyse. A big party of what you do is pitching your recommendations to your PMs, as lifesgreatmystery notes. You will also get to meet senior management of the companies you cover to understand better how they are performing.

Value-add is judged by how good your recommendations are. You will get paid and promoted on how accurate your notes are. It's that simple. A great associate gets more than 50% of them right, and a poor one doesn't. For interns, it's slightly different, as they don't have time to judge the performance of your note. Rather they are looking for the correct approach, thought processes, attention to detail etc.

One point on what lifesgreatmystery says above: buy-side uses sell-side research to get up to speed on a stock they haven't looked at before. Rarely does it affect final investment strategy. Sell-side research is sometimes used by the IB guys who need to get up to speed as well.

@happyness: Yes, that's broadly right, the bigger the shop, the more granular the coverage. You are also right that associates will start with small/mid caps, and progress to large caps as they gain more experience. The reason that buy-side ER guys switch every couple of years is that they are trying to hone their future PM skills. Having exposure to many sectors is therefore valuable. It is true that in the middle of their careers sell-side ER focuses on a very narrow selection of stocks, but when you start out I'd be surprised if there was no opportunity to rotate.

4/9/11

look up...

Sell-side research is there to help the Sales guys (not completely, I know, but mostly). Buy-side research (especially in house research) is designed specifically to promote an investment thesis.

sell-side ER basically calls up buy-side ER and offers them their research. the buy-side ER buys it (prob from a few companies) and uses it to help decide on an investment strategy

4/10/11

From what I've seen, there is a pretty big difference in terms of buy-side research between the large investment management firms and smaller ones. At the big mutual fund families in particular, they can afford to have an analyst or associate who is focused on, for example, small-cap biotech companies. Generally, the associates focus on the smaller-cap stocks, and as you move up to analyst and senior analyst you get the bigger and bigger names.

Also, buy-side research people seem to move between sectors a good deal more than sell-side people. I know that at Fidelity associates cover one or two industries during their time as associates, and then switch to a different industry when they become analysts. There are separate sector specialists who only cover one industry for their entire career.

4/12/11

this thread got huge

4/17/11

sounds like it's pretty hard to get an intern at a buy-side firm like Fidelity. Happyness, do you know how many second-round interviews there were?

Also, how much exposure to junior people have to the PMs? I understand they pitch stocks to them, but how often does this really happen (and how much influence can associates really have?)

Finally, just out of curiosity, what's Peter Lynch's role right now at Fidelity? Any chance interns or associates get to meet the guy? I imagine that alone makes the internship worthwhile...

4/17/11
blackopsmonkey:

sounds like it's pretty hard to get an intern at a buy-side firm like Fidelity. Happyness, do you know how many second-round interviews there were?

Also, how much exposure to junior people have to the PMs? I understand they pitch stocks to them, but how often does this really happen (and how much influence can associates really have?)

Finally, just out of curiosity, what's Peter Lynch's role right now at Fidelity? Any chance interns or associates get to meet the guy? I imagine that alone makes the internship worthwhile...

  1. I'd say somewhere between 30 and 35? That's just a guess though.
  2. Quite a bit. Like a said before, even the most junior people (except interns) cover their own stocks, so when a pm is considering that stock he or she would go to that associate to discuss it. The pms do their own research too, so they don't take the associate's advice blindly, but there is a lot of interaction there. They probably wouldn't have as much interaction with the large cap pms, because they don't cover those stocks.
  3. I'm not really sure about this one. I've heard rumors that he comes in every so often, but I don't know for sure how involved he still is.
4/20/11
blackopsmonkey:

sounds like it's pretty hard to get an intern at a buy-side firm like Fidelity. Happyness, do you know how many second-round interviews there were?

Also, how much exposure to junior people have to the PMs? I understand they pitch stocks to them, but how often does this really happen (and how much influence can associates really have?)

Finally, just out of curiosity, what's Peter Lynch's role right now at Fidelity? Any chance interns or associates get to meet the guy? I imagine that alone makes the internship worthwhile...

Just to add a bit to what happyness said, I think how much exposure jr people have depends on the PM. Never worked there but based on my conversation with the former CIO on the Canadian side, some can have a pretty hands on approach. Some of the guys are pretty structured and expect what is presented to them to come up from the ranks and be screened; probably won't give the new associate much notice. While the CIO ran nearly 20B before he left and basically saw the jr guys every day.

No idea with Lynch, never met him. Wikipedia says hes a research consultant at Fidelity.

4/19/11

This is probably a dumb question, but assuming you're a beast and get offers from the top BBs for investment banking and ER at Fidelity, which one would you take?

4/20/11
blackopsmonkey:

This is probably a dumb question, but assuming you're a beast and get offers from the top BBs for investment banking and ER at Fidelity, which one would you take?

Sounds like a dumb question to me. If you want to do ER, choose Fidelity. If you want to do IB, choose the BB. It's pointless to try to rank the two in absolute terms.

Putcall-thanks for all the info!

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4/20/11

blackops, you would do what you want to do... seems like there is enough info in this thread to help you make that decision

if you want to work terrible hours (including weekends), transaction-based work, and more "grunt-work" than do IB. you'll learn a lot through the sheer volume of bullshit you have to do, and exit to buyside

if you want good work/life balance, more intellectual work, more market-based work, more investment work, and want to move to other funds. the best part about ER at fidelity is that you would be at the buyside already

4/20/11

Putcall,

I wanted to ask you what type of hours do individuals typically work at Fidelity? I hear the work life balance is better than on the sell-side. You guys also never scramble around earnings.

With regards to the salaries you posted, I "feel" like they're in-line with sell-side ER. So, give the better work-life balance, that's great news!

In USD, a senior associate would earn a total comp somewhere in between $130K-$160K. On the sell-side, I feel like that's a reasonable range in a decent year for someone with 3-5 years of experience.

So, is it reasonable to say that a sell-side associate with 2-3 years would likely come into a Fidelity as a senior associate?

Thanks again,

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4/20/11

Those on the buyside still scramble around earnings.

2/25/13

I have an offer from Fidelity Investments, and can confirm that their pay structure is as follows - $70k base, $12k first year guaranteed bonus, and $9k sign on. So overall, first year package is around $90k. Hope this helps!

2/26/13

Fiat Punto:
I have an offer from Fidelity Investments, and can confirm that their pay structure is as follows - $70k base, $12k first year guaranteed bonus, and $9k sign on. So overall, first year package is around $90k. Hope this helps!

target?

2/26/13

Are you asking if I am from a "target" university, or if I have any targets that I need to hit ? Assuming it's the former, yes I am at a target Uni in the UK.

2/26/13

Fiat Punto:
Are you asking if I am from a "target" university, or if I have any targets that I need to hit ? Assuming it's the former, yes I am at a target Uni in the UK.

the latter, but i guess your answer was sufficient
2/26/13

Can't believe its been almost 2-years since I first posted in this thread. Good times.

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