Institutional Equity Sales and Trading

SV4lax's picture
Rank: Senior Monkey | 93

Could some people please elaborate on what Institutional Equity Sales and trading is? To my knowledge a simplified explanation is that they execute large orders for mutual funds, hedge funds, and other big clients to make sure the market does not take too big of a hit. How do you break in to this career? Is it desirable? What are the exit opps and pay structure?
Thanks

Institutional equity sales trading

Institutional equity sales people and traders work with large institutions such as wealth managers and hedge funds and communicate ideas with institutions' portfolio managers and traders. The buy side analysts will also discuss the markets with these salespeople and traders and ultimately place their trades through this desk. They only work with equities.

1.21 gigawatts:

So there are sales people, sales-traders, and traders. Sales people call portfolio managers and buyside analysts at mutual funds and hedge funds with long and/or short trading/investment ideas. The portfolio manager will have his buyside analyst look into it and if they like the idea they will place the order through the sales guy's desk by having their buyside trader call the bank's sales-trader to relay the order to the bank's trader. Also sales-traders will proactively make calls to buyside traders to try and get orders through their desk even if their salesperson didn't necessarily give them the idea.

Best way to break in is to get recruited from college after doing internships at the bank. Or you could get a job on a desk by applying to a boutique firm with a less rigid recruiting structure and if you do well could transfer to a bulge bracket later. Pay in sales & trading is basically the same as everywhere else in the bank. Also, good salespeople with a solid track record of money making ideas can become portfolio managers on the buyside. Traders can also work on the buy side in various capacities.

User @KevinNYC, a hedge fund associate, cautioned against having expectations of gaining a research background in this group:

KevinNYC - Hedge Fund Associate:

Keep in mind that this is a flow based business. People often join this group expecting to learn how to identify and execute profitable trades. This isn't the place to learn that. You will learn about market mechanics, reporting, compliance, and sales. Don't expect to learn about alpha generation. This skill set is one of the least transferable in the bank and there is little hiring by the buy-side except for a few execution (and not discretionary) positions.

Check out another thread on this topic on WSO.

Read More About Sales and Trading on WSO

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Comments (147)

Aug 11, 2010

so there are sales people, sales-traders, and traders. Sales people call portfolio managers and buyside analysts at mutual funds and hedge funds with long and/or short trading/investment ideas. The portfolio manager will have his buyside analyst look into it and if they like the idea they will place the order through the sales guy's desk by having their buyside trader call the bank's sales-trader to relay the order to the bank's trader. also sales-traders will proactively make calls to buyside traders to try and get orders through their desk even if their salesperson didn't necessarily give them the idea.

Best way to break in is to get recruited from college after doing internships at the bank. Or you could get a job on a desk by applying to a boutique firm with a less rigid recruiting structure and if you do well could transfer to a bulge bracket later. Pay in sales & trading is basically the same as everywhere else in the bank. Also, good salespeople with a solid track record of money making ideas can become portfolio managers on the buyside. Traders can also work on the buy side in various capacities.

    • 4
Aug 11, 2010

Keep in mind that this is a flow based business. People often join this group expecting to learn how to identify and execute profitable trades. This isn't the place to learn that. You will learn about market mechanics, reporting, compliance, and sales. Don't expect to learn about alpha generation. This skill set is one of the least transferable in the bank and there is little hiring by the buy-side except for a few execution (and not discretionary) positions.

Send me a msg if you have any questions...

    • 1
Jan 18, 2014

Hi Kevin,
I have been following WSO for a while, but just registered today so it won't allow me to send you a private message.
Could you send me a PM so that we can chat about IES? You seem to know what you're talking about, and I have an interview for an Entry level analyst on an IES desk coming up soon.
Many thanks,
Michael

Jun 6, 2017

Hi Kevin,
I am a newbie here. What do you exactly mean by flow based business? How does it operate? Won't the work of identifying profitable trades be similar to that of alpha generation?
Thanks

Aug 12, 2010

I work in equity s&t and that is not entirely correct. Again, there are three roles in equity s&t: Salespeople, Sales-traders, and Traders. Traders and sales-traders are flow based, salespeople are idea based - they identify and pitch money making ideas to the buyside - alpha-generating ideas. Also, good salespeople with a solid track record of money making ideas can become PM's on the buyside.

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Aug 12, 2010

I mostly agree w/ one point twenty. Sales ppl, sales traders and market makers (traders) on the desk. Sales people relay orders to the sales traders, who are split up among the sale's ppl's accounts.

Successful sales people will join the buy side as pm's. I think the two main reasons are their ability to identify good analysts/ideas while disseminating the important info, and building good relationships w/pm's and analysts on the buy side. The networking can't get any better since you're constantly on the phone/visiting the buy side. If you make good calls based off of your research and are not just delivering the message (regurgitating your analyst's opinion), but really getting your clients into the good ideas, you're set.

Just my point of view.

Aug 12, 2010

I still fail to see the importance of Sales traders. What exactly is there role?

And sell-side traders: Are they essentially doing what the Sales-trader tells them to do but at the right price? :S

Aug 13, 2010
walkio:

I still fail to see the importance of Sales traders. What exactly is there role?

And sell-side traders: Are they essentially doing what the Sales-trader tells them to do but at the right price? :S

The sales traders ARE the traders. When a sales person get a trade from the buyside account, either the buyside trader calls the sales trader, or the buyside analyst/pm calls the sales person who then relays the trade across the floor to the sales trader who co-covers the account.

Aug 17, 2010
Bodhis:
walkio:

I still fail to see the importance of Sales traders. What exactly is there role?

And sell-side traders: Are they essentially doing what the Sales-trader tells them to do but at the right price? :S

The sales traders ARE the traders. When a sales person get a trade from the buyside account, either the buyside trader calls the sales trader, or the buyside analyst/pm calls the sales person who then relays the trade across the floor to the sales trader who co-covers the account.

FALSE. There is a distinct difference between sales-traders and traders. While the roles are merging at many banks the sales traders are not the same thing as traders.

Aug 12, 2010

their*

Aug 13, 2010

I have never seen a salesperson go to the buyside as a PM. I have always thought sales is pretty useless. The PMs I work with would rather just talk to the analyst that the sales guy talks to.

Aug 13, 2010
Ratatouille:

I have never seen a salesperson go to the buyside as a PM. I have always thought sales is pretty useless. The PMs I work with would rather just talk to the analyst that the sales guy talks to.

I never thought it was the case either. I've seen it and heard of it. Sometimes directly to the buy side, sometimes through a few years after moving to sell-side research. Surprisingly, some sales people have CFA's and MBA's from top b-schools. Others are just morons that deliver any message that's not meaningful.

It makes sense - if you're able to make profitable calls for your clients, whether short term long/short trades, pair trades, or longer term calls, and coupled with your connections to the buy side, its possible. Its just a matter of getting the analyst/PM on the phone, knowing the story well and delivering the message in a compelling way. The hardest part is having your idea follow through and see the stock move in the direction you're calling for.

Very rare, but if you can do this....

Aug 13, 2010
Ratatouille:

I have never seen a salesperson go to the buyside as a PM. I have always thought sales is pretty useless. The PMs I work with would rather just talk to the analyst that the sales guy talks to.

You probably work at a smaller shop that is being assigned JR salespeople and typically won't ever get any good sales guys (because smaller firms are usually unable to pay high trading commissions). Often the sales guys that add the most value (ie good money making ideas) are assigned to the larger accounts because they pay more. These salespeople are usually the guys that end up getting PM roles on the buyside.

Sales people manage idea flow. The better (usually more experienced) ones identify and introduce their accounts to good trading ideas. If the PM likes the idea he'll pass it on to his internal analysts or ask to talk to the sellside analyst like you mentioned.

Aug 13, 2010

the guy who wrote this book

http://www.amazon.com/Diary-Hedge-Fund-Manager-Bot...
went from sales to a hedge fund pm role

Aug 13, 2010

Thanks for all the input on this topic but a few more questions: Do all big banks(BB, MM, and Boutiques) have institutional equity trading or do some choose to outsource it to another firm? Also, since sales traders are mostly sales is it commission based opposed to a regular trader of a set salary? The biggest question I have is now the role of the buyside trader. If a trader at a hf listens to his research people and PM and the sell side(institutional equity trader) actually executes the trades what does the buyside guy do? Does he just relay the messages from the research and PM to the sell side trader?

Aug 17, 2010

.

Aug 17, 2010

Care to elaborate the difference, please?

Aug 22, 2010

Role of sales person (aka equity research sales) seems to be explained well.

An equity block 'trader' (market makers) in a BB would be someone who gets an order from a Sales trader and plugs the number into an algo (i.e. vwap) and presses the execute button. algo will often split order into dark pool.
They are "market makers" also because they send out notes to clients/the market indicating whether they want to be a seller or buyer in a particular stock.
ABSOLUTELY no prop positions involved.
[portfolio traders/non-usd traders play a more complicated role. non-usd traders work with ADR and take more unofficial prop positions]

sales traders:

1) get orders through chat from clients
2) make calls to clients when their 'traders' want to sell/buy

Aug 22, 2010

Something I probably should but don't is the difference between the equity traders at the internal trading desks at Citi, and the Citi traders on the NYSE floor. Are the Citi NYSE traders strictly dealing with the orders from retail investors?

Aug 25, 2010

Whats the future of institutional equity sales traders with the role of computers? It sounds like they just click and have a program actually execute

Nov 9, 2010

.

Nov 12, 2010

This is one of the better threads at explaining the associated roles within equity S&T for BBs. What tends to happen in a smaller shop is they are willing to willing to pay a much higher payout and since sales traders are relationship based they can just jump to another shop where they get a better payout and bring their clients. Depending on how many clients they have they will split their time between hitting up their clients and executing the trades. Sales-traders with a lot of clients tend to be more like sales and will usually hire a trader.

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.

Dec 29, 2010

The question I have is: since S&T can limit your exit options, which jobs are most transferrable, specifically to IM/HF.

Research is an easy one, but what about desk research analysts or "cross capital structure" analysts that I've heard of but am having trouble finding info on?

Jan 28, 2012

this is a great thread...

Jan 29, 2012

also stephen weiss who's on fast money quite a bit was in equity sales before starting a fund

After two years as a tax attorney, Weiss embarked upon his Wall Street career, first at Oppenheimer & Co. and then at Salomon Brothers, during the time it was controlled by Warren Buffett, developing and communicating investment ideas to the industry's most respected investment funds including SAC Capital (Steve Cohen), Tiger Management (Julian Robertson), Soros Funds, Kingdon Capital and Omega Advisors (Lee Cooperman). At Salomon, he co-managed the firm's 500 person Global Research Department, breaking new ground on integrating research from all regions around the globe. He also represented the Equity Division on the Capital Commitment Committee, and chaired the Stock Selection Committee. He went on to co-manage SAC Capital, and then joined Lehman Brothers where he successfully built the top institutional equity sales force on the Street, while serving on their Global Sales, Capital Commitment, Investment Policy, and US Executive Committees. He also played a critical role in the research division's rise to first place in the prestigious Institutional Investor survey, the pre-eminent measure of Wall Street research.

IVY for Life

Apr 12, 2012

What are first year comp + bonus look like at a smaller shops like jan mont/ piper jaf/ Morgan keeg?

Also is moving from institutional equity sales to FI doable?

Apr 12, 2012

What are first year comp + bonus look like at a smaller shops like jan mont/ piper jaf/ Morgan keeg?

Also is moving from institutional equity sales to FI doable?

May 10, 2012

Bump

Sep 19, 2013

Great thread, had to revitalize it.

Anyone willing to throw out some comp figures?

Sep 19, 2013

It varies by the house, but a Senior VP (base salary only) tends to max out around $150k-170k.

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Sep 19, 2013

SB'ed. Would you be able to give some more color on the junior level and how you foresee the future of the industry?

I ask bc recently an alum dissuaded me from ER bc it's not a good long term career move. He has since mentioned the near term need for a young person on their desk (sales). Thanks again

Sep 19, 2013

Slight edit to above - given all the changes in the past few years, banks are frowning on silly bonuses, so high end base can go as high as $200k. Juniors (less than 2 yrs) tend to be in the $80-100k range, but for someone who's closing in on promotion to regular VP, $120k is possible. As for the future of Equity S&T, as long as there is a buy side, there will be a need for quality sales & trading. Until you can call your own shots, you are ideally in a shop with strong research, good primary & secondary deal flow (IB) & a solid infrastructure to support the cause.

Sep 19, 2013

All good to know. Thank you.

Sep 28, 2013

BB comp for ER in NYC out of MBA is 100-120K plus bonus in first year.

Mar 22, 2014

Great thread, wanted to bump this back up to the top. Also would love to hear from anyone in institutional equity S&T.

"When you stop striving for perfection, you might as well be dead."

Mar 22, 2014

how the exit opps for S&T

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Mar 24, 2014

Bumping this one to the top. Great thread.

"When you stop striving for perfection, you might as well be dead."

Apr 25, 2014

Any further insight on what the daily routine would be for an intern, I have an interview with a BB tomorrow for a year long internship and want to know as much as possible on the breakdown of the role in equity S&T?

thanks!

Apr 25, 2014

@Gentlemen of Thursday: I'm in FI, but at a BB, it would likely be tracking when companies report earnings, getting coffee and maybe some other administrative tasks like keeping track of schedules for some of the more senior salesmen, (meetings). My prior experience in Equity S&T was more involved because it was at a smaller shop (calling companies for corporate access, roadshows) but at a BB, I would expect your experience to be the former.

Apr 25, 2014

Thanks!

Apr 25, 2014

Starting in equity sales at a boutique bank in June. Any insight regarding how to perform well and get ahead would be appreciated

Dec 20, 2014

u can read more here,many good advice.

Jul 27, 2015

I would just focus on trying to create value at all times, compacting a ton of news sources into a daily report of useful and relevant news sent out before market open is something a lot of people like to do. Another is if you can make an excel sheet that helps in some form during the day. Basically anything that creates value or gets information to traders faster. Other than that, just be a likeable guy that the full timers enjoy being around

Jul 25, 2015

bump

    • 1
Mar 10, 2016

Hi guys,

randomly came across this thread and since i've been an observer on this forum for many years, I thought I would add some colour as some people are either plain wrong or at best quite confused about sales traders/traders/market makers etc.

source: Trader for 5+ years.

This is a bit of a info dump - if you have any specific questions PM me.

Trader/Market Maker
The trader and market maker are essentially the same thing these days. let me clear it up...

Prop trader: This is what many people think of what a trader does. Prop traders trade entirely with the banks capital and do not typically interact with other areas of the business unless to help a desk out of a position or to make money off of it. Prop traders were essentially a hedge fund operating within the bank. Following 08'/Volcker rule changes these roles have all but disappeared and this is no longer a function that you will do at a bank.

Market Makers
Market making is 90% of what traders do and so when banks talk about sales & trading these days they are talking about market makers - the 2 terms are interchangeable. quite simply a market maker takes risk to provide a market for a given security. By takes risk I mean he or she takes the other side of the trade that the client wishes to execute (the orders are passed to the traders from the sales trader - more on this later). This risk could be split second risk where the traders buys the security back from the market immediately or this could be risk run over hours or days depending on liquidity, market etc. The market maker makes money from either the spread of the security or by taking positions on a certain market i.e. prop trading the other 10% of what maker makers do. Taking risk (running a position) is what differentiates a trader from a sales trader. So to clarify market makers can take risk and bet the bank balance sheet on positions - this just happens much less than it used to and the risk limits are much lower. This kind of prop trading is allowed under Volcker because it's seen as essential for managing the risk taken on by the trader. There is a healthy debate as to what constitutes out and out prop trading and the positions taken by a market maker.

Trader pay
The problem is that before 08' traders used to have much bigger limits on their position size and thus could make a lot more money from outright speculation. Spreads also used to be larger so the trader made more money from flow business as well. FYI 'flow' refers to the flow of trades from clients (pension funds/Hedge funds etc) Flow is down, spreads have been reduced thanks to High frequency traders and risk limits have been cut. This is why traders are not making the large sums of money they once did - their three main sources of revenue have all been reduced.

Sales traders
Sales traders take orders directly from clients & hedge funds. They make money by getting commissions based on the notional value of orders they receive. So a sales trader wants to do as many trades as possible. Earlier in this thread someone mentioned that 'traders only push a button and an algo carried out a trade according to given instructions. This is typically done by sales traders as their is no risk, i.e. the algo runs the sales trader buys the security on behalf of the client at whatever the market price is.
The problem arises when a client wants a risk price - i.e. wants the trader to make him a price for the security. A sales trader will then call (or typically shout) to the trader and ask them for a price. The trader makes a price and if the client wants to deal the trader buys or sells the security. The trader has now taken the other side of the clients trade. This is where the conflict arises...the sales trader gets paid on commission and just wants to trade as much as possible BUT the trader gets paid on the profitability of his book and so he has no incentive to take on a losing trade. It is worth remembering that some of the clients will be hedge funds who are actively trying to exploit market mispricings. Their is thus a fine balance between the commissions generated by the sales trader and the loss on trading books of the trader. It is of course with remembering that some trades are good for both the trader and the sales trader.
Sales trader pay
Sales traders get paid on commissions so the overall risk profile is lower. It is also a more client focused role, you are only as good as the flow you can generate i.e. how many people you know on the buy side.

Sales
These guys either sell ideas or act as a go between stock analysts or industry experts and clients.

analysts
know an industry and its stocks very well.

Hope this helps clear things up.

    • 7
Mar 10, 2016

anything is possible with some hard work and a little luck

Mar 10, 2016

Actually cash equity sales is probably the role where academic background matters the least - just so long as it's at a good university. It sounds like your main weakness is a lack of relevant experience. Have you considered applying for internships? Whilst some firms are fussy about penultimate year students (e.g. Credit Suisse) others are happy for final year, or masters students, to apply (e.g. JPM).

Mar 10, 2016

Woah woah not everyone at once ....

Hoosier Nation

    • 1
Mar 10, 2016

What you posted in pretty much the job of Instutional sales. That and kissing the clients ass.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

Mar 10, 2016

spot on, execute the order , kiss the clients ass three nights a week at the bars.

its one way or the other: hate me or admire.

Mar 10, 2016

It really depends on the firm, but I'll generalize.

The job is more or less the same, but in a larger firm, you are going to have better clients, throwing more dollars, to talk to better analysts, and get better information. People talk about the global settlement, but the fact is that management of any company with a decent market cap gives more air time and better color to bulge bracket banks than they do to tiddly wink brokerage firms. That's just a fact. The caliber of the analyst at a BB is probably higher too (not always true but usually), which means they will probably be able to unearth better information. So long story short, that makes your job selling easier that information and trying to impress clients. I've been a buy side client of both, and the smaller firms definitely need to be scrappier to get in front of clients. It can be done, and you can make bank if you are connected with a good set of analysts, but it's harder to do at a small firm. This dynamic is probably even more true if you work at GS and have "morning huddles" where you selectively provide inside information to favored clients (apparently that happens anyway if you believe the news).

Also, and this is at least as important as previous dynamic, larger firms get paid. There are a lot of tricks to try to get around the filter and talk to analysts at smaller shops without ever paying a dime, but that doesn't fly with Citi or Morgan Stanley or GS. You either do business or you get cut from the list, period. So to the extent that you are a sales rep wanting to get paid, you have a lot more leverage at a BB.

The caveat would be some small firms such as Jones, Knight, etc. that have good traffic in OTC block flow or some other particular niche. The reps at some of those firms can make coin if they have deep relationships with a good set of clients and are known to be trustworthy in executions.

Mar 10, 2016

Thanks for the insight...would working at a boutique still provide for a good learning experience? I am sure it varies from firm to firm but are these positions worth pursuing if you are trying to carve out a career in institutional sales or is it a place to go after getting experience at bigger spots, which of course is not always possible.

Mar 10, 2016

Yeah, if that's the best experience you can get, it's better than no experience. I'm sure the firm probably has protections in place to prevent you from taking any clients, but realistically, clients want to work with people you trust, and if you end up at another firm later, it's easy to call names you know. If you are a producer, you will be able to move to a larger firm eventually, that's true of any role in finance.

Mar 10, 2016
Ravenous:

Yeah, if that's the best experience you can get, it's better than no experience. I'm sure the firm probably has protections in place to prevent you from taking any clients, but realistically, clients want to work with people you trust, and if you end up at another firm later, it's easy to call names you know. If you are a producer, you will be able to move to a larger firm eventually, that's true of any role in finance.

Could you comment on the compensation for Institutional Equity Sales reps from 1st year to SVP level? I'm interested in Institutional Equity Sales as well, although I'm interested in the middle market (the South). Thanks.

Mar 10, 2016

I've never worked in institutional sales so I can't give you specific figures. I've known people who were 100% commission, but most are modest base + commission, and the latter can be substantial (several hundred thousand a year if you are good and have a good book, even at a MM firm). Obviously, it is cyclical as well to some degree.

I am not sure how easy or hard it is to build a book on the institutional side, but I suspect it is like retail in that it has a high failure rate. The industry is mature and shrinking with established relationships. If you are starting up without an edge, you might struggle. Also, from what I've heard and seen to a limited extent, the best sales reps are former analysts -- they know what their clients want to hear about and can push useful pieces of information. If you are "just" a sales guy and don't know what you are talking about, it makes it harder obviously. I was unfortunate enough to have my info added to some crappy hedge fund contact list and get calls all the time from people -- it's easy to tell within the first 10 seconds if someone knows what they are talking about or not (not that I want to take any of the calls, I usually just hang up).

Also, this is just my opinion, but I think it's really hard for anyone to add value in sales unless they somehow have access to proprietary research. I really don't want to hear about some press release that your analyst read that 500 other investors already read this morning. Don't call me about that. Tell me something worth knowing. If you are a favored client at Goldman Sachs, for example, they will tip you on stuff (apparently, at least, if you believe the allegations). I wouldn't want to be involved with that kind of stuff -- way too risky -- but it does raise the question of just how much value someone in sales can add. IMO, it is basically a gate keeping function that tries to piggy back / monetize on any value the analysts at the firm create. Sales people are probably way overpaid for what they do.

Mar 10, 2016
Ravenous:

I've never worked in institutional sales so I can't give you specific figures. I've known people who were 100% commission, but most are modest base + commission, and the latter can be substantial (several hundred thousand a year if you are good and have a good book, even at a MM firm). Obviously, it is cyclical as well to some degree.

I am not sure how easy or hard it is to build a book on the institutional side, but I suspect it is like retail in that it has a high failure rate. The industry is mature and shrinking with established relationships. If you are starting up without an edge, you might struggle. Also, from what I've heard and seen to a limited extent, the best sales reps are former analysts -- they know what their clients want to hear about and can push useful pieces of information. If you are "just" a sales guy and don't know what you are talking about, it makes it harder obviously. I was unfortunate enough to have my info added to some crappy hedge fund contact list and get calls all the time from people -- it's easy to tell within the first 10 seconds if someone knows what they are talking about or not (not that I want to take any of the calls, I usually just hang up).

Also, this is just my opinion, but I think it's really hard for anyone to add value in sales unless they somehow have access to proprietary research. I really don't want to hear about some press release that your analyst read that 500 other investors already read this morning. Don't call me about that. Tell me something worth knowing. If you are a favored client at Goldman Sachs, for example, they will tip you on stuff (apparently, at least, if you believe the allegations). I wouldn't want to be involved with that kind of stuff -- way too risky -- but it does raise the question of just how much value someone in sales can add. IMO, it is basically a gate keeping function that tries to piggy back / monetize on any value the analysts at the firm create. Sales people are probably way overpaid for what they do.

Based on what you've said, it is a little scary, but why would anyone nevertheless choose equities vs. fixed income, where I hear that much more money can be made and that market is not mature?

Mar 10, 2016

The market for fixed income sales reps is mature. Why would there suddenly be demand for more fixed income sales people? I would rather be on the fixed income side though -- that market is less efficient and you would have a better chance of adding value to clients.

Mar 10, 2016
Ravenous:

The market for fixed income sales reps is mature. Why would there suddenly be demand for more fixed income sales people? I would rather be on the fixed income side though -- that market is less efficient and you would have a better chance of adding value to clients.

I've thought about that too, but I just can't get as fascinated with it. I mean, something about fixed income seems kind of dull to me. I know this may get flamed and fellow WSOers would shoot what I say down, but fixed income just doesn't excite me as much. Equities and equity derivs are just more fun to me.

Mar 10, 2016

There isn't that much difference between equity and fixed income analysis.

Mar 10, 2016
Ravenous:

There isn't that much difference between equity and fixed income analysis.

Well, from what I've been told, the best opportunities in fixed income are structured products, i.e. turning mortgages, car loans and credit cards, etc. into bonds. This seems kind of weird to me. I understand the concept, but it "feels weird" and also a little scary given the fact that some of that type of product wrecked the economy in 2008. If anything, if I didn't do equities, I'd want to deal in some way with energy.

Mar 10, 2016

Yeah, I was talking about corporate bonds, not packaging bundles of shit and trying to sell them to dumb money.

Mar 10, 2016

Great thread so far. Im currently fighting a hangover but I will post something later. I am a salestrader at a boutique shop so happy to answer questions.

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.

Mar 10, 2016
trade4size:

Great thread so far. Im currently fighting a hangover but I will post something later. I am a salestrader at a boutique shop so happy to answer questions.

When you get a chance, can you explain the difference between sales trader and institutional sales person? I have never understood the exact difference but gathered that there is some overlap. Thanks.

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Mar 10, 2016

Thanks, guys. Really appreciate the insights!

Mar 10, 2016

I would equate institutional sales more to like research sales but they also may have a coverage type role.

A salestrader role will be to cover accounts keeping them up with market color, getting answers to questions all similar to what institutional sales would do.

What a salestrader also is doing is trading the order for the client as well. The client will giving giving orders and instructions and the salestrader is acting as an agent executing for the customer. When speed matters and our shop has a niche of speed you are going to have some slippage when you have a sales guy relay it to a trader. Its not very efficient.

It really is a blend of both sales and trading. You definitely are not just an order taker... maybe at some of the BBs they may have some monkey salestraders that just take the order but you really need to be able to cover the buyside trader/pm or they wont want to trade with you.

As far as prospecting for new accounts and building relationships a salestrader does all that just like a sales guy would.

The catch to all of this is there is a limited amount of information a salestrader can process at a given time. You cant be working 15 orders and talking to 10 accounts about various things and relaying info at the same time its simply not possible. In those cases the salestrader will probably pass the order along to a trader and focus on talking to the account or focus on the trading and have a sales guy relay color etc.

Hope that helps

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.

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Mar 10, 2016
trade4size:

I would equate institutional sales more to like research sales but they also may have a coverage type role.

A salestrader role will be to cover accounts keeping them up with market color, getting answers to questions all similar to what institutional sales would do.

What a salestrader also is doing is trading the order for the client as well. The client will giving giving orders and instructions and the salestrader is acting as an agent executing for the customer. When speed matters and our shop has a niche of speed you are going to have some slippage when you have a sales guy relay it to a trader. Its not very efficient.

It really is a blend of both sales and trading. You definitely are not just an order taker... maybe at some of the BBs they may have some monkey salestraders that just take the order but you really need to be able to cover the buyside trader/pm or they wont want to trade with you.

As far as prospecting for new accounts and building relationships a salestrader does all that just like a sales guy would.

The catch to all of this is there is a limited amount of information a salestrader can process at a given time. You cant be working 15 orders and talking to 10 accounts about various things and relaying info at the same time its simply not possible. In those cases the salestrader will probably pass the order along to a trader and focus on talking to the account or focus on the trading and have a sales guy relay color etc.

Hope that helps

Thanks so much for this post. I needed the explanation for salestraders too.

Mar 10, 2016

From what I know it depends on a lot of factors.. past experience, schooling, location, etc.

Maybe this will put it into prospective for you.. taking numbers from individual(s) I know of..

Stifel Nicolaus
1st yr. Institutional Equity Sales (2 Yrs ER previous experience @ boutique)
70k base + 35k Bonus

Now without the previous ER experience? I really couldn't tell you.. base may drop to something more reasonable like 50-60. Bonus could be a tad less, maybe 25. Don't know for certain.. Ravenous may have some better insight on this.

Mar 10, 2016

come on man how many times you basically going to ask the same thing?

The places you are talking about are not pure boutique shops so you may have the possibility of actually getting some accounts to cover from early on. They will likely be smaller accounts or non paying/weak paying accounts. With that comes a trade off which i will explain in a moment.

Now at a more pure boutique where its eat what you kill (not given any accounts) you are going to make less starting out but with the potential for really explosive upside.

There was another thread about infrastructure that the BB's have that give them the brand equity and thus accounts that are paying. Guys are paying not because you are a good salesman but because they more or less have to pay the big boys. As such you will be paid less at bigger places but you will see more early in the career.

The smaller the shop the less infrastructure the better the payout you are going to see. I cannot stress enough how difficult this is. Its not easy getting hedge fund traders/pms to trade with you. Its a ton of work and it doesnt happen overnight. It could take prospects over 1 year to open with you and even then they may be paying small.

Since the demand seems to be picking up I may do a Q&A on the topic. I dont want to organize it but if yourself. catdog. ravenous, torontonian, want to try and a schedule a time maybe me and thedude can answer some questions in a nicer format.

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.

Mar 10, 2016
trade4size:

come on man how many times you basically going to ask the same thing?

The places you are talking about are not pure boutique shops so you may have the possibility of actually getting some accounts to cover from early on. They will likely be smaller accounts or non paying/weak paying accounts. With that comes a trade off which i will explain in a moment.

Now at a more pure boutique where its eat what you kill (not given any accounts) you are going to make less starting out but with the potential for really explosive upside.

There was another thread about infrastructure that the BB's have that give them the brand equity and thus accounts that are paying. Guys are paying not because you are a good salesman but because they more or less have to pay the big boys. As such you will be paid less at bigger places but you will see more early in the career.

The smaller the shop the less infrastructure the better the payout you are going to see. I cannot stress enough how difficult this is. Its not easy getting hedge fund traders/pms to trade with you. Its a ton of work and it doesnt happen overnight. It could take prospects over 1 year to open with you and even then they may be paying small.

Since the demand seems to be picking up I may do a Q&A on the topic. I dont want to organize it but if yourself. catdog. ravenous, torontonian, want to try and a schedule a time maybe me and thedude can answer some questions in a nicer format.

Thank you.

Mar 10, 2016

ff

Mar 10, 2016

I'd be careful with joining a HFoF directly as an analyst. You'll know why this is I'm sure, but keeping it simple, asset allocation and analysis of fund managers/risk will not help with hedge fund recruiting. You may establish a good network with fund managers but this does not mean they will want to hire you.

Can't comment on equity sales.

The HBS guys have MAD SWAGGER. They frequently wear their class jackets to boston bars, strutting and acting like they own the joint. They just ooze success, confidence, swagger, basically attributes of alpha males.

Mar 10, 2016

Where do you go after HFoF then? Investor Relations?

Mar 10, 2016

If you do FoF, if you really build a rapport with someone, show you are hungry, smart and willing to take a step back, its do-able. Your edge would be that you are a known commodity - someone who is sharp and they know personally. Much less of a fit risk than some random person who may have all the technical expertise. Of course this would be for smaller funds. I have seen it happen. But not often. Most times people go into marketing/capital raising or prime brokerage or Asset Management at another shop.

Just because it does not happen much does not mean it can't or won't happen. You'll have to work hard at it though.

Good Luck.

Mar 10, 2016
Jamoldo:

If you do FoF, if you really build a rapport with someone, show you are hungry, smart and willing to take a step back, its do-able. Your edge would be that you are a known commodity - someone who is sharp and they know personally. Much less of a fit risk than some random person who may have all the technical expertise. Of course this would be for smaller funds. I have seen it happen. But not often. Most times people go into marketing/capital raising or prime brokerage or Asset Management at another shop.

Just because it does not happen much does not mean it can't or won't happen. You'll have to work hard at it though.

Good Luck.

The likeliness of this happening is close to zero. You don't just learn the technical expertise of a product overnight. Yes, it might have happened VERY rarely, but definitely don't go into a FoF thinking about how you'll exit to a HF because you very probably won't.

The HBS guys have MAD SWAGGER. They frequently wear their class jackets to boston bars, strutting and acting like they own the joint. They just ooze success, confidence, swagger, basically attributes of alpha males.

Mar 10, 2016

Sure thing this is the IBD forum but w/e we can give you our opinionated and largely wrong advice.

speed boost blaze

Mar 10, 2016

I'd post this in the trading forum. Hours are 5:30 - 6 or so for junior guys

Mar 10, 2016

get in at 4am for west coast

Mar 10, 2016

West Coasters get in at 4am? What time do they leave? I'm guessing around 2-3pm?

Also, could this job be considered good pre-MBA experience if I want to switch over to buy side research through a top MBA program if I decide I like picking stocks rather than selling ideas?

Mar 10, 2016

It always helps having a BB name on your resume, but depending on the group & product you're interviewing for, you should look at their strengths & weaknesses. Working for a team that is supported by strong IB deal flow, highly ranked research analysts & some good traders to back that up will make your life (and revenue generation) a lot easier.

Mar 10, 2016

Everything Red Barchetta just wrote.

Having the backing of deal flow, research and good traders is key when you're just starting out. I'd say having one out of the three is a must to get clients to come with you when you move around.

- Good traders will make clients come back with more orders. Offering prices is the word of the day there.
- Great research will make PMs pay for the reports. Even throw you a bone (read: orders).
- Deal flow, well, good clients will get a higher allocation than shit clients.

Mar 10, 2016

I'm not sure if it's true that comp isn't as high - sales can get really lucrative really quickly if you're good it it. I personally know (and have heard of other) institutional sales people at large, well- regarded mutual funds (so not quite what you're talking about) who likely make 7 figures in good years.

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Mar 10, 2016

hey everybody, here is a breakdown of what my situation is, I would love advice.

I ran a consumer financial firm for 4 -5 years, graduated from a private college, probably a 3.5/5 with a 3.5 GPA. Went to work for a small mm/bd desk where I got my seres 7/63/55 in 3 months. My job is an institutional equity salesman. I'm in my late 20's now cold calling for clients everyday, no clients as of yet.. My gut is that BC I work for a firm that no one knows it will be tough to get clients. I am very well educated and present myself much older and have always had a lot of responsibilities throughout my short career.

My question is, based on information I have read on this website and others, many have said that it would be a smarter career move to work for a larger firm and learn the ropes where I can call clients with them knowing who my firm is, right now they've never heard of my firm, not only that, not sure of what the standard is for compensation, right now I get paid commission only, no 401-k, no benefits, no health coverage etc.

Any advice would be great. Thankyou!

Mar 10, 2016

Sales is all about commissions/fees just like in any other industry. If you can sell you are gold. Think about it. David Rubenstein at Carlyle is not an investor (that's Bill Conway and Danny D'aniello) he's a salesman and is on the road 270 days a year visiting investors, strategic players SELLING Carlyle and its products, but he is an equal partner in the business and having spoken to him individually, ridiculously smart (as smart or smarter than the other two). Think about investment bankers. They are SALESPEOPLE, pitching to companies/governments to use them/their bank/desk to raise capital/lend money/do merger advice/restructure. Why? To get FEES. A cut, as well as interest if they lend directly. Think about IR and product specialists at banks/hfs/mfs/pe funds. They are SELLING a fund/product etc. Lots of funds love milking management fees. It's an AUM game. If you can raise money, its steady, easy fee income (as long as you can keep AUM) whereas performance (ie. carried interest etc) is/can be volatile.

Sales is more intellectual than people think because you have to read people/situations and be strategic in your approach and change things up quickly and know how to put pieces together, but it's not like excel/math etc heavy. However, sales gets less cred by many because it is not seen as "intellectual" or "academically challenging" - whatever that means. It's a lot of hustle, especially what you do on the floor, getting on the phone, summarizing stuff, coordinating with research and trading, drinking, taking clients out (making them feel liked etc) rather than using big words/equations, complex models, asking brutal questions to management teams, writing big reports etc. Sales is the revenue generator (at most banks, that's why they are SELL side). So if you are good at it, you will have no problems making money and having lots of career opportunities.

There is plenty of demand for sales gigs, believe me, more than there is supply. You might not hear about it on this board since my general impression on this board is that it is much much more geared towards banking/PE and some HF (ie. the people it attracts).

Good Luck.

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Mar 10, 2016

Well said.

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Mar 10, 2016

Well put @"Jamoldo"

Mar 10, 2016

Appreciate the feedback Jamoldo. Are you in sales? I think human interaction is much more exciting and invigorating than a lot of things in finance.

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Mar 10, 2016

I'm definitely not in sales but it feels like I am half the time...

Mar 10, 2016
BEAST MODE TRADER:

So it seems as though I have not encountered many individuals in my age range (25) that have interest in this. I love the capital markets and think this is what I want to do. Currently a Sales Associate/Assistant at a MM bank and really enjoy being on the trading floor.

Was just wondering if individuals on here with experience in the industry could shed some light on why it seems to me there is not high demand for this job? Is it as simple as the comp isn't as high?

Also was wondering what comp is like for Institutional Equity Sales guys at BB's and other MM banks. I really think I want to move up the ladder in this career progression and would like for people to try and give me reasons why I shouldn't. I love the market and being involved, and think I would rather be on the road with clients and management than doing the research. I do enjoy researching equities, reading the research and coming up with investment ideas, and looking at company fundamentals along with the technicals (chart reading) but can still do all this being a sales associate.

Would appreciate feedback, thanks in advance.

As long as it's not institutional equities in Dallas then you're good.

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Mar 10, 2016
mogel:
BEAST MODE TRADER:

So it seems as though I have not encountered many individuals in my age range (25) that have interest in this. I love the capital markets and think this is what I want to do. Currently a Sales Associate/Assistant at a MM bank and really enjoy being on the trading floor.

Was just wondering if individuals on here with experience in the industry could shed some light on why it seems to me there is not high demand for this job? Is it as simple as the comp isn't as high?

Also was wondering what comp is like for Institutional Equity Sales guys at BB's and other MM banks. I really think I want to move up the ladder in this career progression and would like for people to try and give me reasons why I shouldn't. I love the market and being involved, and think I would rather be on the road with clients and management than doing the research. I do enjoy researching equities, reading the research and coming up with investment ideas, and looking at company fundamentals along with the technicals (chart reading) but can still do all this being a sales associate.

Would appreciate feedback, thanks in advance.

As long as it's not institutional equities in Dallas then you're good.

Hey come on man, that's not very nice.

Mar 10, 2016

Everyone on this site is focused on exit opps, and the general impression is that you're kinda stuck in sales once you're there

Mar 10, 2016

In certain cases that is true. But that's true for many careers. If you are in sales, you will probably stay in sales (if not in finance, then somewhere) unless you get a break and into trading. Research guys can go into sales and some into trading. They can also go into funds. Once you are on the buyside, you either do other buyside stuff or do sales (ie. folks at funds doing sales at a bank, banks love ex-buyside types). Note how almost all of this is staying within finance. Will a post MBA banker who has a few years of experience credibly move into the buyside? It will be tough, since they will be seen as more seasoned and not potential excel monkeys (can get those pre-MBAs younger and more hungry.

Let's take a few examples.. What will a top banker to megafund PE kid do once he/she is spit out of said megafund (told to get an MBA or crushed by the hours/lack of upward mobility). He/she can:

1. Move to another fund (PE/HF)
2. Maybe move to a bank? Have not heard of this happening, though and probably doesn't much.
3. Move to corporate and do business development and/or corporate finance
4. Join a portfolio company in the capacity of number 3, (ie. same thing)
5. FoF
6. IR
7. Other (everyone has this option, could be starting one's own business)

That's really it. 5 may happen but lots of people have a tough time transitioning their thinking from in the weeds to very high level. It's just different (no better or worse). 6 one needs contacts and social skills to deal with LPs. Not really something one gets at previous experience, so maybe as a junior. So really, you're down to like 3-4 possibilities.

Let's take an equity sales guy

1. Moves to another bank/boutique house
2. Moves to a fund, maybe a startup (this could really be pushing it but I've seen it happen - depends on product/clients)
3. IR
4. Sales/business development at a corporate
5. Other

Not that different in the big picture of things. In other words, mobility is TOUGH, especially after a few years. The guys in PE are not going to be sales guys in most cases, either for personality reasons or because they won't have the networks.

On the plus side, the equity sales folks get better hours, weekends off and get to socialize (ie. drink, play golf with clients etc, which is a huge plus if you actually like people), time to develop hobbies/friendships etc. Oh and if they are good, they make a lot of money, are visible to everyone and wanted (ie. can get poached easily, offered more money etc). Of course if markets tank you may get chopped first, like much of the trading floor does, but there's a price for everything...

I'm not making a pro equity sales case, and the examples and my argument are far from comprehensive but people talking about "PE exit opps" often do not realize how much more limited they often are when compared to the perceptions here.

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Best Response
Mar 10, 2016

I am neither pro nor against equity sales, so if the below sounds like I am trying to discourage you, it is not meant to, but what I would say is that you really need to be cut out for it. You need to enjoy to be on the phone and you need to enjoy going to meetings where your role is just a chaperone. You don't ask questions, you don't participate, you just sit there while your clients meet with research analysts and corporates. Mostly reasearch analysts though, for corporate meetings, a lot of clients have a "no-broker policy". You will also have very boring things to do: IPO is going on, research analyst comes through and you have to go to every single meeting (like 5-7 meetings a day) where exactly the same things is being discussed. It's boring for the analyst, but it's a killer for the sales person because at least the analyst gets to talk, you just sit there and get the client's feedback to give to ECM. Also, sales involves a lot of admin work. And I mean really mundane stuff. Like scheduling meetings for your clients...they want to change them 10 times and each of these 10 times you have to call up another client trying to talk them into switching their slot. This can take up hours of your day on a regular basis. If you think you have assistants to handle that stuff, I am sorry to dissapoint, I was equities sales at a top BB and even MDs would do this shit themselves because 1) client relationships are all that matters, you wouldn't hand this off to an admin 2) those desks have very few admins. We had 1 admin for 20 people...you do most mundane crap yourself. Reading research and breaking stocks is maybe an hour or two in the morning. But a lot of clients may have zero interest in talking to you and just go straight to the analyst if they are interested. Maybe you can chat more to some junior people and HFs, but Long Onlys are mostly not that interested. In terms of hours, yes, it is true there is usually no weekend work. I would have to come in by 7am latest, if we have deal calls, it would be 6am. I could usually leave at 7pm, but if there are blocks happening after market close then I would likely have to stay until 10pm or 11pm (when book closes). Why? Because you might have (and usually do have) some client who wants to get updates on the book right until the time it closes...so yah, you are stuck there doing nothing just waiting to hear from ECM about the book. At most BBs you are also not allowed to do this stuff remotely due to compliance reasons, so you are stuck there.

All in all it is not a bad job, but just go in eyes wide open. You may often feel like a glorified secretary rather than a finance professional. I personally had enough at some point and to be honest I am just not cut out to be a sales person in general probably. Also in terms of mobility, I think if you want to switch after 1-4 years it is probably doable, after that it becomes very very difficult. If you are someone who likes geographic mobility this is also tough because clients are specific to your location, if you move from NY to HK....tough to do unless you manage to move internally.

However, if you think sales is what you enjoy, then definitely go for it. If you are at a major BB (which is where you want to be) then there is no direct relationship in terms of commissions and your bonus. In fact there is zero relationship, most BBs have a very complicated attribution system, so your commissions are kinda meaningless at major BBs. There are smaller shops that pay you a % of commissions as bonus, but my advice is to stay the hell away from those places, I really don't think smaller shops will have much of a future in equities sales (not that I have a crystal ball of course, so do what you think feels right).

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Mar 10, 2016

This is some awesome and much needed insight. Not just for OP but I feel for everyone. Any way to promote or pin this?

Mar 10, 2016

Even though I did not post the topic, I would like to thank you for your feedback. It seems in-depth and insightful. I am interested in going into institutional sales, and I've done a fair amount of research. I'm coming from a law background. I'm about to graduate from a top 20 law school with limited financial experience (internships). Since you've actually worked in institutional sales, what do you think is the best way to market oneself/find a job with a non-traditional background?

Mar 10, 2016

Great Info

Mar 10, 2016

Great Info

Mar 10, 2016

Just curious Gini, where did you end up moving in your career after Institutional Sales?

Right now because I am the junior guy on the desk I am in charge of the admin stuff and booking the trips, logistics. What was your comp at the BB you worked at and were you an associate or higher? Would really appreciate the info. Thanks again!

Mar 10, 2016

I second gini on staying away from small shops from equities. Theres just no value add, hence hard to make money.

Mar 10, 2016

@jdsooner: Getting into equities sales a the major BBs is usually done through internships. Those desks are really keen on trying you out first, see if they get along with you. Also, hiring junior analysts on sales desks is a lot less frequent than for IBD. Usually an equities sales desk has only one entry level analyst, maybe two if it is a very large desk. They don't necessarily (or actually rarely) hire a new analyst every year becaue there is just not that much room to move up. The existing client base is normally pretty much covered, the best way to get clients when you first join is to pick up those clients of someone more senior who quit. This is what I did, someone quit a few months after I joined (I started right out of school) and I managed to just pick up most of the guy's clients. I was good at it, so they never saw a need to hire someone else and there was my client base! Of course those two years sucked because I was covering clients full on and also doing all the support work that the junior analyst has to do including all the mundane admin shit, so my first two years I came to the office by 6am and left at maybe 10pm. I also did stuff on the weekend because there was a lot of admin stuff (presentation, client mappings, broker poll reviews etc) that I just couldn't do during normal working hours when I was both covering clients and doing the really mundane admin shit (booking meetings, booking hotels, dealing with dumb requests clients sent). They only hired a junior person under me my third year and then I could dump all the admin shit. Anyhow, slightly off-topic here, but my point is that it is not that simple to get in without an internship, so that's probably where you should start.

@best: On comp, very similar to what you would get in IBD as far as base goes (it was the same actually I think). There were ups and downs on bonus due to market performance and general performance of the firm. My worst bonus was 50% of base, best bonus was 90% of base. I was an associate, would have made VP if I had stayed one more year, but I quit to do sth else. I joined right out of school as an analyst. I quit to go to PE, I did one year in a very specialized role that focused too much on one sector and one particular type of company within that. Bored the hell out of me, so I quit that one and I am now also in a PE role, but something much broader that I think will suit me more (I only started fairly recently, so ask me again in 6 months, lol).

A word of caution here though. PE is definitely NOT a common thing to do from equities sales. In fact, I would say starting off in equities sales can be a bit dangerous. You don't learn any of the modeling and your first 2-3 years could really be all admin stuff and very little client interaction. Even client interaction will not teach you the hard finance skillls that you would need to move to the buyside, regardless of whether you want to join PE, HF or a Long Only. After a year I felt like I still knew nothing. I learned to regurgutate the research and read off of IPO sales memos, so I sounded kinda competent for 30 seconds, but much beyond this I did not know anything. So after a year I really made an effort to teach myself. I did the CFA and taught myself a bunch of other things, modeling etc. That's how I could eventually spin my equities sales role to get me into PE. But if you are just starting out in finance, I would not pick sales. For me, I didn't have much of a choice, I interned during the crisis and it just so happened that this was the only internship that I was left with (I had two other renegged), so I took it and it lead to a job. But if you have a choice, do equities reserch or IBD first and then move into sales later. The other thing is, when you are straight out of school on a sales desk and covering clients (if you get lucky enough or fight hard enough to actually cover any), then you need to be aware that your clients are probably 10-20 years older than you with a lot of experience. There is probably not much value add you can provide, so it makes your job very difficult. Coming into equities sales at a later point is often better because you will be a bit older and have more experience that you can draw on.

Another thing that sometimes people get kinda wrong is the idea that you will take clients out a lot and it will be one big party every night. That's mostly not the case. Most of your clients are 10-20 years older than you, so that means they are often married with kids and have no interest of going out at night. Most of my client "socializing" was coffees in the afternoon and lunches. There was the occasional dinner and drinks after work, but not that often really. Also, this part of the job is a lot less fun than you think, at least for me it was. Having a lot of "forced socializing" can get very exhausting and you may not end up liking some of your clients, but you still have to sit through lunch and coffees with them on a regular basis and keep a conversation going. After a few years I got really tired of that. Yes, I also made some good friends among my clients, but there were a lot of lunches and coffees that were totally not enjoyable.

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Mar 10, 2016

Another great post

Mar 10, 2016

The vast majority of equity sales people are inept and can't cut it in a real profession. It's a slow grind at first and depending on the shop, it may never pan out. Some people do make it big, because of skill or luck or both. They are still considered relatively stupid and worthless middle-man/women.

The backgrounds of most of these people are pretty much the same type of people who become Real Estate agents and insurance agents. Most on this site are aspiring to achieve higher status in education and work, sales sets the bar for entry very low.

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Mar 10, 2016
dutchduke:

The vast majority of equity sales people are inept and can't cut it in a real profession. It's a slow grind at first and depending on the shop, it may never pan out. Some people do make it big, because of skill or luck or both. They are still considered relatively stupid and worthless middle-man/women.

The backgrounds of most of these people are pretty much the same type of people who become Real Estate agents and insurance agents. Most on this site are aspiring to achieve higher status in education and work, sales sets the bar for entry very low.

You're an idiot.

Mar 10, 2016
dutchduke:

The vast majority of equity sales people are inept and can't cut it in a real profession. It's a slow grind at first and depending on the shop, it may never pan out. Some people do make it big, because of skill or luck or both. They are still considered relatively stupid and worthless middle-man/women.

The backgrounds of most of these people are pretty much the same type of people who become Real Estate agents and insurance agents. Most on this site are aspiring to achieve higher status in education and work, sales sets the bar for entry very low.

Fuck off. You know jackshit about what you're rambling about.

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Mar 10, 2016

Go in FID sales. I work from 7:30-5:30, rarely have to entertain clients (which means more time for friends/loved ones), the work is extremely interesting, and the people around you are generally very smart. It's a high paying, but low stress job.

Mar 10, 2016

The reason few of our best and brightest are set on rising the ranks in S&T is a combination of commoditization and a shitty life-style, with repetitive unchallenging work, and the Sword of Damocles constantly hanging over you (meaning, if you don't produce you get cut from the herd and left for dead).

On the commoditization front, and this is particularly true of the equities side, jobs are constantly being consumed by algorithms. What a "trader" once spent 50% of his day doing he now spends 2% on. Transparency means more competitive pricing, and more client sophistication means products have to perform on their own, without "relationships". I am at B school now, but just last week I had dinner with two of my former bosses (PMs at an asset manager) and one of their brokers, an SVP in equity S&T at a big bank. You should have seen the look of complete soullessness in this dude. 11pm on a Wednesday night, out to dinner with 3 dudes he doesn't care about. Getting home at 1am to your wife and 2 kids at a shitty house in Long Island that costs $1.2 million.....ugh. And this guy is good - he's lasted for 15 years and he's pushing 40. Many others have died before him. It's just a shitty way to go through life.

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Mar 10, 2016

The first paragraph of your post is pretty applicable to most of finance, especially on the sell side. If you don't produce, or have the political network/support, you get cut.

The latter part of the second paragraph of your post (regarding lifestyle), sounds a lot like any person on the sellside in finance and you (as well as others on this board) would be well advised to remember that. Whether it is M&A, coverage, equity sales, fundraising, capital markets etc, it is ALL SALES. Most of these services are commodities and its all about price and "relationships". The equity sales guy might be wining and dining a person he doesn't care about, but the M&A/coverage guys is probably in the sticks somewhere trying to convince some company in bumblef*** to use them to do an IPO/placement/merge whatever, which may also involve said drinking/dining (it certainly does in Asia - as well as on the PE side, where top PE guys have to do it to "get the deal" and "build a relationship"). In the end, it's all the same stuff.

You bring in revenue or are seen to be doing so and get a cut. I do not hear many of my banker (M&A, coverage etc) friends talking about their work being challenging at all. Sure plugging away at excel can be tough, but once you learn it, it's all about volume and time spent crunching through that and formatting powerpoints and other meaningless stuff that the client usually barely looks at. No one says that they find their job as a "challenge" or "intellectually stimulating." If you think that, then maybe you are cut from a different cloth from most (and that's totally cool)...otherwise I suggest you talk to a lot more mid level people in banking (think VP/Director) as well as PE types who have done the drill.

@"dutchduke" I think you will find ridiculous ineptness in all professions and all jobs. Equity sales is not the only one. The number of inept and not smart people I find at top PE shops is astounding. Sure they have degrees from nice schools and Harvard MBAs, but many are still not only not making that much money as investors (ie. fund performance), but can often have a tough time articulating their investment thesis or taking me through deals they have done. Ditto with a number of senior MD M&A/coverage guys. Some are also brilliant but get the bigger picture and know that their job is not that demanding intellectually and don't fake it.

As for most people on this site "aspiring to achieve higher status in education and work" - I will have to respectfully disagree. If that was so, you would see a lot more doctors, academics, NGO types here. Not wannabe bankers/PE types/traders etc. People on this site want to do these gigs because they are seen as prestigious because its a relatively low risk way to MAKE LOTS OF MONEY. You don't have to be creative, that smart or anything, just either connected, interview well or be well networked (all of these can be or are very very tough, no doubt). You just have to get in and not get fired. Getting in is the toughest part.

Most people at a bank are on the sell-side. This means that they either sell, work for someone who sells and/or help in the sales process. Whether that is hawking equities, bank investment products, M&A services, capital raising services, etc... The principle is the same. SELL.

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Mar 10, 2016

Love everything sales related.

It's one of the those skills where if you are a salesperson or master the skill. You'll never be unemployed.

"It is better to have a friendship based on business, than a business based on friendship." - Rockefeller.

"Live fast, die hard. Leave a good looking body." - Navy SEAL

Mar 10, 2016

I believe sales is not for everybody; just like anything else. The act of selling is as hard for some dudes as reading the P&L is for another dudes.

I was offered a sales position before, but I ended up rejecting it because I don't feel comfortable doing it. And just like you who would rather be on the road than doing research, I would rather do the research. Well, some roadshow would be pleasant of course but constantly doing it is not exactly my type.

I've been reading the comments and I think they are all great feedbacks. Couldn't agree more. Sorry for not giving feedbacks as good as the others, but good luck!

Mar 10, 2016

I spent a month on equity sales when on my grad program in London last year, PM me if you have any questions - I'll answer what I can

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Mar 10, 2016

It all depends on what you want. I've worked as an account exec before and absolutely despised it.

My neighbor is an MD of institutional equity sales at a BB and it's perfect for him.

He is what I consider a natural salesman - people would (and do) pay to hang out with him. He's tall, good looking, bright, loves to talk about people and events, and just straight up loves to eat, drink, and be merry.

He doesn't make what the investment banking MD's make (especially post crisis), but he pulls in a great salary, works market hours most days, and any evening or weekend "work" involves doing what he considers to be fun shit: 5 star restaurants, sporting events, wine tours, military training camps etc.

The stereotypical salesperson is not intelligent in the analytical sense, which is what IB & PE select for at the junior level. That said, I have seen some smart salespeople verbally *destroy* their engineer & analyst colleagues; I have not seen the reverse.

Note: The _overall_ most talented people I know are all senior sales executives at Fortune 500 software companies.

Mar 10, 2016

In general, sales does not attract the best and the brightest. The cream of the crop want to work with those who are just as smart and talented as them; it's a matter of ego and prestige. If you look at PWM at BB, the people are significantly less talented than trading, Asset Management, and banking folks. The barrier to entry is lower, and you have less attractive exit opps. When you're in sales, you're constantly kissing ass and having to grovel at others' feet in order to get their crumbs. Some don't mind it, but for many of us here on WSO, it's not a good way to make a living.

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Mar 10, 2016
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"It is better to have a friendship based on business, than a business based on friendship." - Rockefeller.

"Live fast, die hard. Leave a good looking body." - Navy SEAL

Mar 10, 2016
Mar 10, 2016
Sep 22, 2017