Equity researchers are involved in the analysis of stocks and assist portfolio managers to make informed investment decisions. They are generally involved in problem-solving, interpretation of data, and prediction of security’s outlook.
On the contrary, Investment banks raise money from the capital markets to assist companies, organizations, and large entities to manage money. They act as the sell-side of the companies and sell the business interests to the investors. Also, they advise companies to determine trade, merging, or acquiring a company.
Let’s understand more about investment banking and equity research from a career perspective.
Investment Banking
Investment banking serves large corporations. They are mainly involved in
• Determining trades for private investors, institutions, and others
• Underwriting new debt and equity securities
• Guiding the issuers on stock placement and issues
• Facilitating mergers and acquisitions
• Enabling sale of securities
Investment banking job roles
A few of the common positions in investment banking includes serving as investment banking analysts, research associates, capital market analyst, consultants, and trading specialists.
Getting into investment banking
To become an investment banker, the candidate should be a finance graduate or possess a graduation degree in accounting, mathematics, or economics. In addition, holding an MBA degree makes you more competent to enter the industry. Also, earning investment banking certifications or finance-specific certifications helps you climb the ladder faster.
Work culture and salary compensation: Investment banks
Work at investment banks is generally high-pressured. You may have to work from 9 AM to midnight at 2 AM. There are no fixed working hours. However, as you climb up the career ladder, your work hours may get reduced as you get more specialized in the domain and the job role becomes more specific.
At investment banks, one can start their career as an Analyst, work for 2-3 years, and level up as an Associate. Further, an Associate can become a Vice-president, then the Director or Managing director. Many of the professionals start their own venture after a few years or move to private equity after working as an investment banking analyst.
The average salary of an investment banker is USD 86,643 in the US as per Glassdoor salary estimates. An investment banker at the UBS earns about USD 144K -156K, whereas the salary ranges from USD 109-117Kat Credit Suisse.
With this information, let’s move on to equity research.
Equity research
As an equity researcher, you will analyze the financial status quo such as assets and liabilities to make investment decisions. An equity researcher is generally involved in:
• Building financial models
• Updating documents
• Performing industry research
• Writing equity research reports
• Communicating investment updates to investors and public
• Convincing the management for investment
Equity research job roles
They are generally viewed as number crunchers. They start their career as an Analyst, and step up to Director, by becoming Associate, Senior, and Vice President.
Getting into equity research
To start your career in equity research, you must hold a degree in finance, economics, accounting, or mathematics. Also, CFA is considered mandatory to avail a position in equity research requiring a strong commitment of years together.
Further, it is recommended to get your content published in Seeking Alpha and share it with our network while searching for jobs. This would help you land a good job in a high-profile company.
Work culture and salary compensation: Equity research
Equity research demands 12-hour days. However, during earning seasons or stock initiation period, the working hours may be more than 12-hours a day.
The average salary for an equity research analyst is USD 95,995 in the US, as per Glassdoor salary estimates. An equity research analyst at Baird earns somewhere between USD 60K to USD 98K. at JP Morgan, the salary compensation may range from USD 82K to USD 157K.
Final Note:
Choose your finance career wisely. Dedication, hard work, and determination get you to new heights in the chosen career path. Apart from this initial research, do your research while choosing your finance career.
