Equity Research Analyst

Equity research analyst overview

The equity research division of an investment bank provides research coverage of public companies and distributes that research to the bank’s clients.  A career in equity research is very demanding, with associates and analysts frequently working 70+ hour weeks.  There is a lot of competition for positions, the compensation is solid, and the work is extremely cerebral.  The organizational chart in equity research is much flatter than most other divisions, with seniority being a function of the quality of research. The two main positions are equity research analyst and equity research associate.

Personality

The personality of someone who would thrive in an equity research analyst role at a bank has the following character traits:

• Works independently
• Cerebral
• Detail oriented
• Quantitative
• Introverted

Equity research Interview prep

Like everything else in life, preparation is key for a job in research.  There are many interview guides out there, but we’ve taken the most common interview questions from a wide variety of sources and provided the answers as well in our equity research interview guide.

Equity Research Analyst – Entry point

The main entry point for analyst positions is Associate.

Associates are recruited from undergrad degrees at target schools, as well as from MBA programs around the world.  An associate typically spends three to four years in that position, until they become an associate-analyst, and finally an analyst.

Exit strategy

Associates and analysts often stay in equity research for a long time, given the more reasonable work-life balance compared to investment banking.  It’s common for an analyst to move from the sell side to the buy side where they perform similar research to be used by the firm’s portfolio managers.  Another common move is to go in-house on the corporate side and work in corporate development (“corp dev”) on M&A transactions or work in financial planning and analysis.

Equity research analyst salary

Below is a range of compensation you can expect to earn as an associate or analyst in equity research.  It should be noted that there can be a wide range based on the firm and the city you’re working in.

Associate: $80,000 to $140,000 (base salary plus bonus)

Analyst: $120,000 to $500,000+ (base salary plus bonus)

Course work

Taking financial modeling courses is the fastest way to learn what’s required on the job before you get hired.

It’s important to begin with a strong understanding of accounting fundamentals.  From there you should have a solid Excel crash course under your belt, which will teach you the basics, including shortcuts, formulas, and functions.

Beyond that, you can progress to more advanced courses, which will teach you sensitivity analysis and industry-specific modeling.  By taking a few courses you’ll learn about various industries and see the different types of models that an equity research analyst builds.

If you want the best value for a wide range of courses, check out CFI’s Full Access Bundle.