Should I take the Equity Research Job
I was just offered an ER associate position with a small/mid-size investment bank. I am currently working as an investment analyst in wealth management and have pushed for a position in ER for over 6 years while finishing my CFA.
I am faced with the choice of cutting my salary in half for this new position (160k to 80k), working longer hours, fewer benefits, returning to the office sooner, and fewer investment opportunities on the personal side. There are also obvious upsides to taking the position. The opportunity to learn and grow within the role and firm as well as in my career over the long term.
It's almost comical how I am questioning something I have pursued over so many years. Am I discounting the opportunity too much or not considering something enough? Interested to hear everyone's opinion.
As a person who made a similar proportion in pay cut to pursue an industry I've wanted to be in my whole life, I think you'll definitely feel the pain of not having the conveniences of your old job. If you're considering the jump just for growth opportunity and future salary, I think you'll have many moments during tough times where you'll regret the move and miss your old luxuries + comp safety net. I sure as hell still feel those down moments from time to time, especially as I see my friends with steady income take the safe route and have no issues owning a home soon.
However, if it's because you personally enjoy the day-to-day work of equity research and see yourself wanting to get your own coverage as a very fulfilling act, then go for it but you have to know whether you can stand/enjoy the job's bullshit. Personally, I always tell myself "I'm here for the blood, not the glory".
DM me if you want to talk through this more
ThatOtherGuy. Thanks for the thoughts. I will PM you tomorrow, I just made my account and they won't let me send anything for two days. I am interested to hear more about your experience and what you think of the industry now that you are in it. Do you see upward mobility for yourself and has your pay steadily increased over time? Do you see capital being devoted to research?
It's a space I have always worked towards entering but after a year of working at home during covid I am asking myself if I need all of the headaches that come with starting over as the low man on the totem pole and the rat race of moving up the ladder.
Good thoughts from TOG. Another thing you didnt touch on, what about your Analyst? Are they well respected across the street? How does he/she run their team? Ton of maintenance stuff or more indepth deep research? What is the bonus potential for you? Taking a 50% cut is tough, but it may be justified if the skills you earn set you up on a better path.
I'm not sure exactly what an investment analyst does in WM. It is pretty surface level fund/company analysis and tailoring that to your book of clients?
Also not sure if you have any dependents, which would make that salary cut tough. Are you able to negotiate to a ~100k base? Kind of ridiculous that they are giving you 80k given that you have several years of experience in finance. Would this be in a high COL city?
Hey TheFlyingKiwi appreciate the comments. The Analyst I would be working for is also a Director for the firm. He has three Associates on his team, I would be the third, and from all accounts seems like a great guy to work with. Being that he is the Director he gives you the opportunity to run as far as you can with projects/initiations and does not have the time to micromanage. The sector would be healthcare which admittedly Isn't my first choice however it is an area that has a constant drip of IPOs and secondaries, second only to technology in my opinion.
In my current role, I act as an asset allocator, manager of investment managers/funds, and run my own sector-based portfolio benchmarked against the S&P. I enjoy the job because I am good at and it comes easy to me, but have likely plateaued in terms of salary growth unless our team takes a big step forward, something not likely as wealth management advisors work dramatically less as they age. The hours would definitely change. Currently putting in 8-5 and would be expected to do 7 to 6 outside of earning season and much longer as companies report.
I do not have any dependents, just a mortgage that I would have to cover while finding a new apartment closer to NYC. The 80k salary was the final figure they offered after my end of the line was silent following their initial $65k offer. I do have additional aspirations, one being real estate investments. The increased workload would reduce my ability to analyze properties and initial purchasing power from a salary reduction. That being said, RE isn't going anywhere, my opportunity to pursue a position in ER may not come again, and even if it does I may not be in a position to reduce my salary so dramatically.
Just as a point of color, $65k for a first offer for NYC as a lateral hire into ER is pitifully low and even $80K is below new ER associate out of undergrad. For someone with 6yrs of experience (albeit not direct) and a CFA, it’s astonishing they’re going sub-100K base. The CFA should put you on comp track nearish post-MBA - the fact it’s not is telling about how the firm views those. If you’re joining a team as the 3rd associate, you’ll likely not gain the training/exposure to pick up your own coverage at some point as the analyst likely views his associates as a supply of labor, not as a pipeline to train/mentor. If you’re not excited about the sector, it’s even harder to excel because that’s all you’ll be looking at day in day out. Given what you’re doing now is 2x the money and could lead to solid upside should you grow your own practice, I’d suggest skipping this opportunity. Doesn’t sound like the spot to join and you’ll probably never be happy with comp given what they’re trying to attract you with.
Yeah, I have to agree here. 6 years of experience and they’re trying to throw you in as the junior most position and with a lower salary than market for that level is insulting.
I think it’s great that you’re passionate about this type of work. It’s honestly the only way people succeed in this industry. However, you have to maintain some level of self-respect and hold out for an opportunity that at least comes close to matching your career experience. Sometimes, jumping head first into the first opportunity to “break-in” isn’t always the best decision.
Value is what you offer, price is what your employer pays. This is telling me your future employer does not value you. Move on from this particularly opportunity.
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