How to Manage a Tough Job Environment for Equity Research
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The job market for equity research in 2014 is highly competitive. What with across-the-board consolidation, tightening regulation, and a slimmed down banking sector, how can a candidate stand out given the crowded, narrow space?
Increasingly, specialization is sought after. Sector focus—rather than a generalist background—is more favorable, be it in biotechnology, insurance, or any niche.
Experience in a separate but related field can be a bonus—or even a requirement. For instance, an engineering degree can be a competitive advantage to someone seeking a position as a semiconductor analyst.
Education is another important variable in the competitive landscape. More to the point, continuing education and certification are becoming customary.
In the past, a college degree, or merely a high school diploma, was enough to get a foot in the door on Wall Street. Post-global financial crisis, an MBA or CFA is vital.
Despite the contraction going on in the profession, the job description for both the newcomer and veteran has remained much the same.
In equity research, “associate” is considered entry level. A research associate is the chief support for a stock analyst, handling mainly spreadsheet-building and conference call preparation. Although the daily routine of a research associate can be mundane, the prospect of becoming a full-fledged analyst is well worth it.
For a seasoned analyst seeking another opportunity, a marketable resume highlighting expertise as well as competitive differentiation is essential. Having a quality book of business and client lists is crucial, as is being able to demonstrate solid statement analysis.
The fundamental supply and demand for equity research has lessened considerably since the late 1990s, when I began working as an analyst, making job hunting an admittedly more challenging proposition, especially for people just out of college.
The difference-maker has been the mandated separation of equity research and underwriting on Wall Street.
Generating profit solely based on research is hard, and the downsizing in sell-side research that took hold with the onset of regulatory change has created a trickle down effect. Furthermore, this trend is showing no sign of reversing.
That said, finding a job in equity research—through more difficult than before—is far from impossible. Not only that, but stock analysis is still arguably the most dynamic and engaging pursuit in financial services. I hope the advice and insight I provided can help to level the competitive landscape!
–Alan House, Equity Analyst
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