Should I work in Equity Research? – Work-life reality, exposure & exit opportunities

In this mini-series, we explore some of the most talked about Accounting & Audit exit opportunities to uncover what work-life reality is really like, what it can do for your career trajectory & the available exit opportunities. Articles in this mini-series include:

Should I work in Big 4 Financial Due Diligence (FDD)?
Should I work in Financial Planning & Analysis (FP&A)?
[THIS ARTICLE] Should I work in Equity Research?
Should I work in Big 4 Valuations?
Should I work in Restructuring?
Should I work in Product Control?
Should I work in Internal Audit?

In this article, we’re covering Equity Research – a division typically found within Investment Banks or independent investment houses.

Have you ever wondered:

What Equity Research is actually all about?
Do I get to sit on the trading floor?
Will I be doing any investing?
What clients, teams, senior partners etc. will I get exposure to?
What is the work-life reality like?

Let’s start from the top…

Why does the Equity Research team exist?

Investors, M&A teams and other market traders don’t always have the in-house capacity to understand a particular sector and its constituent companies inside out.

That would mean an unlimited amount of earnings calls/investor days, meetings with senior management, etc across all of the companies within an industry. That’s where the Equity Research team come in.

The team spend their time creating research reports on industries and companies, including models & forecasts of earnings.

Ultimately such research reports purpose is to provide a view on the company valuation with “Buy”, “Hold” or “Sell recommendations”.

Such reports are made available to an Investment Bank’s clients (often given as a freebie as Banks try to win more lucrative deals/trades).

Work life reality & client/senior exposure

The Equity Research team is typically organized by sector, with ER Analyst’s covering their own companies and dedicating their working hours to genuinely understanding the business and getting insights to senior management.

All members of the team are called “Analysts”, and it’s not to be confused with the typical investment bank pay-grade structure where Analysts are the “newbies” at the bottom of the hierarchy.

The majority of such research work is done behind your screen, and you’ll likely be based on the trading floor as your Investment Banks own Traders (and their clients) might want your insights on a particular company in their sector.

Hours, however, will typically be much longer than market hours, with field research required i.e. attending offsite investor days, earnings calls, and meeting senior management of the companies you are covering.

The majority of research reports will cover listed companies within each industry, but some notable, private companies might warrant their own report.

Clients will typically be Asset Managers / Investment Houses (who might commission a particular report from your team i.e. about a particular industry/company etc. that they are considering investing in), although you won’t get much exposure to them. The Sales team / Traders will hold the relationship, but might point them in your direction to clarify any questions they have on your research / models / assumptions.

You’ll find you get regular exposure to the Senior Management of the companies you cover (i.e. at the C-Suite level as well as the Investor Relations team where it’s a publicly traded company), and many Research Analysts are on a first-name basis with the C-Suite.

In a previous life – when lavishing expensive gifts and dinners on business partners was common (and not the compliance issue it is today) – the Equity Research team would find themselves being taken out to dinners and events on a regular basis by those same companies that they cover. With such an obvious conflict of interest, it’s no surprise that this is no longer allowed (or limited)!

This mini-series intended to give you a quick and dirty overview to some of the most talked about Accounting & Audit exit opportunities. This particular post covered Equity Research – a team typically found within Investment Banks, with other roles coming soon!

Now if this is an area you’re considering, I strongly encourage you to check out our map of the landscape of Accounting & Audit Exit Opportunities, including Equity Research to find out:

How does Equity Research compare to other roles in the Finance realm?
What are my accounting & audit exit opportunities after spending time in Equity Research?
How does the career trajectory in Equity Research differ from others I’m considering
Are there other post-audit career paths suited to me?
And more…!

Exit Options | Mapping the post-accounting & audit landscape

A lot of the clients we coach ask about moving into more strategic & commercial roles after spending time in traditional accounting & audit, but don’t know where to start or even what opportunities exist …so-much-so that we’ve put together a map of the landscape of accounting exit opportunities, which I encourage you to check out!

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