equity research analyst work

Equity Research Analyst Job Description Template

An equity researcher analyzes and provides financial insights on publicly-traded companies and/or sectors to facilitate investment decisions within fund allocations.

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The role of the researcher can be sell-side or buy-side. The former refers to analysts that are in a bank, or a broker, who offer paid research to institutional investors with a view to solicit the provision of further financial services. The latter will be analysts working directly within investment funds that generate investment ideas and strategies for its fund managers.

As the name suggests, this is a role traditionally applied to the equity class of assets. However similar research roles do exist within the commodity and fixed income space. The job description below can be tweaked to apply to such roles.

One quirk of equity research is that an analyst is not an entry-level position, as is a common title in other banking roles. An associate is actually the most junior position within the team and acts as an assistant to the analyst, who will have their name directly attributed to the published research reports.

Equity Research Analyst - Job Description and Ad Template

Copy this template, and modify it as your own:

Company Introduction

{{Write a short and catchy paragraph about your company. Provide information about the company’s culture, perks, and benefits. Mention office hours, remote working possibilities, and anything else that makes your company interesting. Also frame where the team and role fits into the organisational structure, as research teams can have different coverage hierarchies.}}

Job Description: Sell-Side Equity Research

The Equity Research department provides independent and objective investment research to the global investment community. It collects and analyzes financial information for stocks within {{list coverage sectors}} . Analysts within this team use this data to build financial models to explore future scenarios of the stocks on a company and wider macroeconomic level.

The ideal candidate will combine a strong quantitative skill set with a range of qualitative skills in order to effectively communicate their research in writing and verbally to clients. In addition, we seek someone with the highest level of ethical integrity.

Responsibilities

Create and maintain earnings, valuation, and industrial models for {{allocated number of stocks, or the name of the industry to be covered}} .

Analyze data to identify emerging opportunities and risks, justifying your reasoning.

Provide BUY/SELL/HOLD recommendations and present findings to the investment committee.

Assist in writing research reports with your findings, to be published to the community and media.

Interact with institutional investors, communicating investment research and responding to requests for models and ad-hoc analysis.

Maintain constant coverage of industry-related news, trends, and developments. Disseminate your insight when appropriate to internal and external stakeholders.

Build relationships with investor relations teams of your portfolio companies. This will involve {{domestic and/or international}} travel.

Devise and perform your own primary research methods, keeping abreast of trends and sentiment in the market.

Liaise with internal sales and trading teams for responding to news, corporate action, and reporting events. You will be expected to maintain a procedure protocol for escalating emerging news.

Maintain a public image for the firm at conferences/events. Communicate the company’s research, building its brand and referring potential new clients.

{{Add other relevant responsibilities here}}

Skills and Qualifications

Bachelor’s degree in finance, economics, financial engineering, statistics, or econometrics

Profound understanding of equity markets on a global level. In addition, a deep understanding of fundamental analysis, financial modeling, asset allocation, and strategy research

Prior experience in financial services (2-4 years) within a “front office” role {{such as M&A, ECM, DCM, Sales & Trading or Equity Research}}

Advanced Excel proficiency. 3+ years of practical experience of using Excel for building and maintaining financial models

Platform experience within Bloomberg and {{one or more of: Morningstar Direct, Informa PSN, Facstet, Axioma, or Barra AEGIS}}

Excellent written and verbal communication skills. Proficiency for presenting and debating a point under pressure

CFA is a plus

{{Foreign languages desirable for roles in Europe or Asia}}

Series 7 and 86/87 license is a plus. Unlicensed candidates will be sponsored, but expected to complete accreditation within a short timeframe

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Hire a top equity research analyst now.

Toptal is a marketplace for top equity research analysts. Top companies and startups hire Equity Research freelancers from Toptal for their mission-critical projects.

Andy Vietor

Andy was recognized twice as an All-Star Analyst by the Wall Street Journal. He has been a strategist, operating executive, financier, and top-ranked industry analyst. As a freelancer, Andy advises a range of companies—from early-stage and middle-market to large caps—delivering customized solutions including effective investor presentations, dynamic financial models, and project finance structuring.

Yiannis Ritsios, CFA

Yiannis is an experienced investment professional who manages assets for institutional investors globally and has extensive experience in financial analysis, valuation, equity research, and investment management. He has worked on M&A projects for large corporations and startup funding for the European Commission. With an MBA from Imperial College London, Yiannis began freelancing to help top management, investors, and entrepreneurs create value and sustainable growth.

Thomas Robb

Thomas delivered actionable solutions and insights to multi-billion dollar clients across the tech and software industries as a senior equity research associate at Morgan Stanley. As an entrepreneur, he understands the importance of taking extreme ownership of projects and enjoys working with executives to grow their businesses through financial modeling, competitive market analysis, and creative problem-solving.

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The Equity Research Analyst Career Path: The Best Escape from a Ph.D. Program, or a Pathway into the Abyss?

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• “Analyst” is a vague job title that could refer to anyone from entry-level hires in the back office to senior professionals leading teams and managing relationships.
• “Equity” seemingly has 5,192 different meanings depending on the context.
• There are different levels within the Analyst role, and the job also differs based on the company type (bank vs. dedicated research firm vs. hedge fund vs. asset management firm).
• And “Research” itself is a vague term… since all knowledge workers do some amount of research in their jobs.

Here, we’re referring to the Equity Research Analyst role at investment banks and dedicated research boutiques that produce and sell their own equity research reports .

This division is often labeled “sell-side research,” and we’ve covered it in the articles on equity research recruiting , equity research careers , equity research internships , and the equity research associate role .

We’ll pick up the coverage here and move straight to the top of the ladder:

The Equity Research Analyst Job Description

Unlike in investment banking and private equity , where the Analyst is at the bottom of the hierarchy, the Analyst sits at the top in research.

The Analyst’s job is to manage relationships with the companies they cover and the institutional investors that might be interested in those companies.

The division is known for its equity research reports , but Analysts add value mostly by setting up meetings, making introductions, and giving investors new perspectives or information they hadn’t considered.

For many decades, Analysts did this and gave away research for free to encourage institutional investors to trade with their bank, indirectly generating commissions.

Now, with MiFID II in place in Europe , institutional clients pay directly for research, so the role generates revenue more directly (or fails to do so if the clients don’t pay).

Banks in other regions can still use the old business model and give away research for free to generate trading commissions, but these new rules are likely to spread worldwide.

If you look at the main tasks in the research division:

• Speaking with market participants (management teams and investors).
• Doing industry research (e.g., collecting data on market share, pricing, etc.).
• Writing the reports (both short, update reports and longer thought pieces).
• Building models and valuations.
• Determining market sentiment.

Analysts spend most of their time on tasks #1 and #5 – building relationships and generating market insights – and little time on writing reports, building models, or collecting data.

A Day in the Life of an Equity Research Analyst

To illustrate the differences between the Associate and Analyst roles, we’ll walk through a day in the life from the perspective of an Analyst.

Note that this is a “normal day,” i.e., not one during earnings season or an important conference:

7 AM – 8 AM: Arrive at the office, read the news, and look at emails from traders and salespeople asking about a few companies in your coverage universe.

You also start reviewing a few research notes written by your two junior Associates. The numbers look fine, but the commentary is too confusing.

8 AM – 10 AM: You communicate your changes to the Associates when they arrive, and then you ask one of them to research a new digital media company in the healthcare vertical that you might want to add to the coverage universe.

The market opens, but there haven’t been any big corporate announcements or other dramatic happenings, so things are calm as you review your calendar for the day.

10 AM – 12 PM: You take several calls from institutional investor clients: one from a hedge fund Analyst at a mid-sized firm, one from a Portfolio Manager at a large asset management firm , and one from a PM at a start-up hedge fund investing in the TMT sector .

They’re all looking for insights into companies’ earnings announcements in a few weeks; a few also want to meet with the management teams of software and internet companies you cover.

12 PM – 2 PM: You head out to lunch on the other side of town to meet with the CEO and CFO of a newly public Software-as-a-Service (SaaS) company in the consumer retail vertical .

They have solid growth and cash flow numbers and want more institutional attention, so you try to explain investor skepticism toward anything retail-related (well, except for Amazon).

But you agree to make their case to a few institutional clients who have invested in the sector before.

2 PM – 3 PM: On your way over to meet with another company, you take a call in the car from an Associate PM at a growth-oriented hedge fund.

He wants to do a deep dive into one SaaS company’s “true” churn rate because he doubts the official numbers released by management.

You don’t have all the numbers in front of you, so you give vague responses and then refer him to one of your Associates to get more detail.

3 PM – 5 PM: You arrive at the other company: a digital marketing agency and online advertising platform with ~200 employees that is looking to go public in the next few years.

You explain that they’ll need much higher revenue (closer to ~$100 million rather than their current $20 million) to get there and that they’ll need to downplay the “agency” part and focus on the tech platform.

They claim that they have a new technology that will use “AI” to automate client onboarding and campaign setup, but they’re evasive about the details.

You’re quite skeptical, but if this company somehow goes public, it might be worth adding to your coverage. You also make a note to ask around about the feasibility of this technology.

5 PM – 7 PM: Head back to the office and review what the Associates have been working on all day, including a few new notes, updated models, and an Initiating Coverage Report.

You make some edits and then strategize with the one Associate about the super-persistent Associate PM who kept asking for the “real churn numbers” for that one company.

The firm is a good client, but this one guy is so demanding that you’re reconsidering the relationship. You head home after this.

11 PM: As you’re about to go to sleep, an activist hedge fund announces that it has taken a 5% stake in one of the companies in your coverage universe: a security software company.

These types of late-night / last-minute announcements are not common, but they do happen.

You’ll need to have an immediate view in the morning, so you ask your Associate to prepare a few thoughts and come in early so you can send out a short note before the markets open at 9:30 AM.

Why Become an Equity Research Analyst?

The equity research industry as a whole is not in great shape, with falling compensation, headcount reductions, and MiFID II forcing an unbundling of research.

And hardly anyone “interviews for” an Analyst role in equity research – you have to work there for a few years and win promotions up to that level.

So, if you break in as an Equity Research Associate , why would you want to stay in the field long enough to reach the Analyst level?

The short answer is, “there probably isn’t a good reason to do so,” but I like to be fair and balanced, so here’s a quick list of the pros and cons:

Advantages:

• Interesting Work and Solid Pay… for Now – Senior ER Analysts can earn in the mid-six-figures up to the $1 million range, and the work is arguably more interesting and less stressful than what Managing Directors in investment banking All signs point to falling pay, though, so who knows if this will last.
• Potential Exit Opportunities – You’re not quite as “trapped” as, say, a mid-level banker who quits and doesn’t have many other options. You could move to buy-side research roles, go into sales, join a normal company, or go into investor relations at companies or fundraising on the buy-side.
• It’s a Good “Escape Route” from Other Fields – Especially if you have something like an M.D. or Ph.D. in a highly technical field, equity research might allow you to use your expertise to move into plenty of other roles (though you don’t need to reach the Analyst level to do this).

Disadvantages:

• The Industry is Declining – It’s still possible to make money and advance in a declining industry, but it’s more difficult than it is an industry where headcounts and revenue are growing. Also, no one knows how MiFID II and passive investing will play out long-term; the impact could be anything from “neutral to slightly negative” to “apocalypse now.”
• It’s a Huge Grind to Reach the Analyst Level – You’ll have to make it through many, many, many earnings seasons and model/research updates to make it to the top. This process can get quite repetitive, especially if you’re covering an industry less prone to surprises (e.g., not tech or healthcare).

Equity Research Analyst Salary & Lifestyle

There are several different levels within the “Analyst” title, ranging from Vice President (VP) to Managing Director (MD).

At the low end, VP-level Analysts might earn around the $200K to $300K USD salary range at large banks in major financial centers.

Directors move up to the $300K to $600K range, and MDs go up to the $500K to $1 million range.

Around 50% of this compensation comes in the form of base salary, and it’s up to 75% at the lower levels.

These figures will almost certainly fall due to MiFID II and declining research budgets at buy-side firms, but you could still earn into the mid-six figures for the foreseeable future.

As you saw in the day-in-the-life account above, Analysts might work the same amount as Associates: 50-70 hours per week , with ~12-hour days on average, and longer hours during earnings season.

The key difference is that Analysts must travel a lot more , including client visits, conferences, and company meetings.

That means it’s arguably a more stressful job since they also have to review work from the Associates and give them direction.

Recruiting: Pathways into the Equity Research Analyst Role

The Analyst role is a senior one, so you don’t interview for it right out of undergrad or an MBA program.

Most often, people start at the Associate level out of undergrad or a Master’s in Finance program , stay for a few years, and then advance up to the Analyst level… if there’s an opening.

Traditionally, it has been quite difficult to move up by staying at the same bank because Senior Analysts rarely left their jobs voluntarily.

So, research professionals often moved around to different banks and advanced with each move.

Advancing to the Analyst level comes down to proving that you can do the same job that they do: speaking with clients and management teams, delivering insights, and setting up meetings – as opposed to burying yourself in models and reports all day.

Besides this path, some people move into equity research from strategy or management consulting, Big 4 firms , or even corporate finance roles.

However, they join at the Associate level unless they’re already quite senior in their previous industry.

Another option is to complete an advanced degree, such as an M.D. or a Ph.D. in a technical field (physics, engineering, biology, etc.), and then work in a group where technical knowledge is required to understand companies ( biotech , pharmaceuticals, semiconductors , etc.).

But once again, you’re unlikely to join directly at the Analyst level, so you’ll have to demonstrate your accounting/finance/business knowledge to get there and then perform well on the job to advance.

For more on these points, see the article on equity research recruiting .

The Equity Research Analyst Job: Worth the Grind or the Career Change?

In these articles, I usually conclude with an “It depends”-type answer and present both sides.

But I’ll be more definitive here: a long-term career in equity research is probably not worth it in the 2020s unless you truly love it and can’t imagine doing anything else.

Research is still a great entry point into finance because of the lack of a standard, on-cycle hiring process, and the ability to break in as a non-traditional candidate.

But there’s serious skepticism about its long-term future, and I can’t credibly recommend it as an option on-par with careers in investment banking , private equity , or venture capital .

People are also pessimistic about the future of sales & trading , but there’s a key difference: there are still opportunities there if you’re a programmer or you work with more mathematically complex products.

By contrast, there’s less room for programming or advanced math in the fundamental analysis of companies, and the negative trends in equity research affect the industry as a whole – not just specific desks or groups.

So, the Equity Research Analyst job may not be “a pathway into the abyss,” but it’s also not a career I would recommend – unless you’re so enthusiastic about research that you couldn’t imagine doing anything else.

You might be interested in:

• Biotech Equity Research: The Best Escape Plan from Medicine or Academia?
• Fixed Income Research: The Overlooked Younger Brother of Equity Research?

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street . In his spare time, he enjoys lifting weights, running, traveling, obsessively watching TV shows, and defeating Sauron.

Free Exclusive Report: 57-page guide with the action plan you need to break into investment banking - how to tell your story, network, craft a winning resume, and dominate your interviews

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16 thoughts on “ The Equity Research Analyst Career Path: The Best Escape from a Ph.D. Program, or a Pathway into the Abyss? ”

curious to know your thought on ER now? Im an undergrad studying history but am looking at internships in the ER sector for next summer in London. I have already completed a few virtual internships but am now looking to expand my experience in the financial world. Any advice would be appreciated.

I don’t think much has changed. Compensation might be a little different now, but ER is still not a great long-term career path due to MiFID II, falling numbers of boutiques, and lower fees paid for research. It’s still a decent starting option, but you normally want to move into a deal-based role or a buy-side role after spending a few years there.

Now that this report is 2 years old, curious to hear your thoughts on the outlook for ER. It appears that comp in the U.S. has remained the same since before. Do you think that the effects of MiFid II already been “priced in”? Or will comp begin to fall gradually from here on out?

I would be surprised if compensation increases substantially. It’s true that MiFID II has not been the end of the world, but the impacts on ER groups and firms has been uneven, with some growing and some shrinking. It’s probably less bad than initially feared, but still not a great industry outlook.

I’ve been reading a lot on here for the last couple weeks (love it!) and gotten really interested in Equity Research. Thing is, I’m a 35 year old woman living in Zürich with a humanities PhD leaving the academy. What I read about this career suits me to the core, but I don’t want to invest time in learning modelling and other skills if my apps will be rejected out of hand because of my humanities background. Spent 5 years as a postdoc and realised the academy is not for me, but I got my PhD from an Ivy, if that helps. Do I have any chance of getting into ER? I don’t mind the pay or the shrinking prospects. I love the idea of doing crazy amounts of research and finding things people missed, or just packaging the information so other people can get it.

I think it will be extremely difficult to get into ER if you have a humanities PhD and you’ve worked in academia up until this point. PhDs in technical fields like physics, engineering, chemistry/biology, etc., can get in, but it’s much tougher to do that from a non-technical field. You might have better luck aiming for an investor relations role or something else where communication skills are valued more than technical/accounting/finance knowledge.

Can you chime on the prospect of a career as buyside research analyst? For both equity and credit research. I’m relatively junior but have always worried about things you laid out on this article.

I think buy-side research is somewhat safer because MiFID II does not directly affect firms in a negative way, and buy-side firms will always need people to do fundamental research. Yes, fee compression hurts, but that is just one headwind vs. multiple headwinds for equity research.

I would also say that credit research, especially in areas like high-yield or distressed, is probably safer than equity research because it’s tricky to evaluate those types of bonds, and fixed income has seen less automation / passive investing than equities (yes, there are lots of bond index funds and ETFs, but most are investment-grade).

Saying to avoid it may be a little harsh. Maybe compared to IB/PE, sure, upside comp is more limited. But a job where you can work 50 hours a week and make mid 6 figures still sounds a lot better than most jobs in the corporate world. If you are a good enough associate and stick around long enough you are bound to have an open analyst seat to fill.

That’s fair enough. Though I think 50 hours a week is a bit on the low side, and I expect compensation to drop over time. I guess my thinking is that if you really want better hours, less stress, low-to-mid-six-figure compensation, and more stability, something like corporate development is better… assuming you want to work on deals. If you just want to follow companies, sure, maybe equity research is still a good option.

What about the overall future of Asset Management? Is it wise to pursue a career in Asset Management?

I think it’s also not great, but not necessarily “to be avoided” as equity research is because there’s no MiFID II that completely changes their business model. Yes, fee compression and passive investing have hurt AMs, but passive investing could turn into a giant bubble that bursts at some point, and there will always be some demand for active managers. Also, quant-like skills will become more important there. For more, please see:

https://mergersandinquisitions.com/

I’m curious, is there anywhere in the public equities realm (excluding quant roles) that you would outright recommend to someone starting today?

OK, maybe I’m being a little harsh here. It’s not that I would universally recommend against public markets / public equities roles. It’s more that if you can’t decide between deal-based roles and public markets ones, then you’re safer picking a deal-based role because they’ve held up better over time and are under less fee and headcount pressure.

That said, if you are 100% certain you want to do public markets and have the track record and experience, go ahead.

Within public equities, if you exclude quant roles, Analyst roles at any of the big long-only funds are still fine. It’s just that they don’t hire that many people and turnover isn’t that high, so it’s harder to win these roles.

As always, the more specialized you can be, the better… find a niche like emerging market stocks or a specific industry or sub-industry and become the top expert there.

For the record, I wasn’t trying to be critical of your view. It just feels like every discussion of roles in the public equities realm nowadays is very defeatist. As someone that missed the track for private investing (at least until an MBA at a minimum), it gets a bit heavy to read continuously that your career path is in decline. So I was just curious if there was anywhere that you still viewed positively.

I agree with both views on the LO seats, hard to get and not going anywhere. I would also say that if you don’t mind investing in a very short term, market neutral style, that the multi-manager opportunity set is still quite robust.

Sure, understood. I would not take all of these predictions of doom too seriously – everyone out there, including me, looks at recent history and then tries to project it forward. But things can always change, and industries have gone from positive to negative or the reverse fairly quickly. Just look at all the people who thought investment banking would “die” after the 2008-2009 period, or everyone who thought tech startups would “never come back” after the dot-com crash, etc.

If you like what you’re doing and don’t want to change paths, sure, continue on with it. And yes, multi-manager funds can be a good option as well if you like that style of trading. We did cover MM funds on this site once, but haven’t focused on it too much since I prefer long-term, fundamental analysis/investing.

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Equity Research Analyst: A Comprehensive Guide to Career Path and Qualifications

Table of Contents

Introduction.

In the world of finance, equity research plays a pivotal role in providing valuable insights to investors, guiding them in making informed decisions regarding stocks and investments. This comprehensive guide will delve into the career path and qualifications required to excel in the field of equity research. Whether you’re a budding finance enthusiast or a seasoned professional looking to further your career, this article will equip you with the knowledge and tools needed to succeed in this dynamic and competitive industry.

Understanding Equity Research

What is equity research.

Equity research is the practice of analyzing various financial instruments, primarily stocks, to provide in-depth insights into their potential for investment. This involves evaluating a company’s financial performance, industry trends, and macroeconomic factors to make informed recommendations to clients or investment firms or wealth management companies.

The Role of an Equity Research Analyst

Key Responsibilities of an Equity Research Analyst:

• Financial Analysis: Equity research analysts are responsible for dissecting a company’s financial statements, including income statements, balance sheets, and cash flow statements. They assess the company’s financial health and performance over time.
• Industry Analysis: Understanding the dynamics of the industry or sector in which a company operates is essential. Analysts need to identify industry trends, potential risks, and growth opportunities that can impact a company’s stock price.
• Company Valuation: Analysts use various valuation models, such as discounted cash flow (DCF) analysis and price-to-earnings (P/E) ratios, to determine the intrinsic value of a company’s stock. This helps investors assess whether a stock is undervalued or overvalued.
• Recommendations: Based on their analysis, equity research analysts provide buy, sell, or hold recommendations for specific stocks. These recommendations are critical for investors looking to build or adjust their portfolios.
• Report Writing: Analysts produce detailed research reports that summarize their findings and recommendations. These reports are distributed to clients, including portfolio managers and individual investors.
• Client Interaction: Analysts often have direct contact with clients, discussing their research findings and providing insights into investment opportunities. Effective communication is crucial in this role.
• Market Monitoring: Equity research analysts continuously monitor financial markets, staying updated on news and events that may impact the stocks they cover. They need to react swiftly to changing market conditions.

Qualifications for a Career in Equity Research

Educational background.

To embark on a successful career in equity research, a strong educational foundation is essential. Typically, aspiring equity research analysts hold degrees in:

• Finance: A bachelor’s degree in finance or a related field provides a solid foundation.
• Master’s Degree: Many professionals pursue a Master of Business Administration (MBA) or a Master’s in Finance for advanced knowledge.
• Certifications: Obtaining professional certifications such as the Chartered Financial Analyst (CFA) designation adds credibility.

Skills Required for Success:

• Analytical Skills: The ability to dissect complex financial data and draw meaningful conclusions is at the core of this profession.
• Industry Knowledge: In-depth knowledge of specific industries or sectors is essential to understand the nuances that can affect a company’s performance.
• Financial Modeling: Proficiency in financial modeling and valuation techniques is crucial for accurate stock analysis.
• Communication Skills: Analysts must convey their findings and recommendations clearly and persuasively in both written reports and verbal communication.
• Quantitative Skills: Strong mathematical and statistical skills are valuable for data analysis and modeling.
• Economic Awareness: Understanding macroeconomic factors and how they influence financial markets is vital.
• Information Technology: Proficiency in using financial software and data analysis tools is beneficial.
• Ethical Conduct: Equity research analysts must adhere to ethical standards and regulations to maintain the integrity of their research.
• Financial Acumen: Proficiency in financial analysis, accounting, and valuation techniques is crucial.
• Analytical Skills: The ability to dissect complex data and draw meaningful conclusions.
• Research Skills: Conduct thorough research on companies and industries.
• Communication: Effective communication is key to conveying research findings clearly and concisely.

Gaining Experience

Experience is invaluable in equity research. Consider the following steps to gain a competitive edge:

• Internships: Seek internships at financial institutions or investment firms to gain hands-on experience.
• Entry-Level Positions: Begin your career as a research associate or junior analyst.
• Networking: Build a network of professionals in the finance industry to discover job opportunities.

Career Progression

Junior analyst.

As a junior analyst, you will assist senior analysts in research tasks, data collection, and financial modeling.

Senior Analyst

With experience, you can advance to a senior analyst role, where your responsibilities will expand to include making investment recommendations and leading research teams.

Portfolio Manager

For those aiming higher, becoming a portfolio manager allows you to oversee investment portfolios and make high-level investment decisions.

Requirements To Successful Equity Research Analyst

Challenges and Rewards:

While the role of an equity research analyst can be intellectually stimulating and financially rewarding, it comes with challenges. Analysts often work long hours, especially during earnings seasons or when major events affect the market. They also need to adapt to rapidly changing market conditions and regulatory requirements.

However, the rewards include the opportunity to have a significant impact on investment decisions, the potential for a lucrative career, and the satisfaction of continuously learning about finance, economics, and various industries.

Equity research is a challenging yet rewarding career path in the world of finance. Armed with the right qualifications, skills, and determination, you can carve out a successful journey in this industry. Remember, staying updated with market trends and continuously enhancing your knowledge is key to thriving in the competitive landscape of equity research.

Start your journey today, armed with the knowledge and determination to excel in the world of equity research. Your path to success begins with a solid educational foundation, a diverse skillset, and a commitment to continuous growth. Happy investing!

Knowledgiate Team

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Tips on How to Get into Equity Research

#1 perform your own research and analysis, #2 get your research published on seeking alpha, #3 share your published article with equity research analysts, #4 follow up and keep networking, additional resources, how to get into equity research.

Four steps to stand out from the crowd

Getting a job in equity research can be extremely competitive .    Global investment banks and boutique firms only have so many Analysts and Associates, with a limited number of new people they hire each year.  In a competitive marketplace, our guide on how to get into equity research will share some ideas that will help you improve your odds of being hired.

The best way to get into something is to just start doing it.  There is virtually no cost (other than your time) to start looking for investment ideas and performing your own valuation modeling of companies. To get the ball rolling, follow these steps:

• Think of an industry or sector that you’re interested in (genuinely)
• Get a list of companies in the sector from Google finance or Yahoo finance
• Filter the companies down by setting criteria such as geographic location, size, the line of business, valuation, etc.
• Download the three financial statements for 3-5 of the companies from EDGAR or the appropriate filing system
• Put all the numbers into Excel, link the 3 statements , and start performing analysis
• Analyze the historical results and build a forecast based on what you think the company is capable of in the future
• Perform a discounted cash flow DCF analysis to value each company

Luckily (or not) we live in a time where it’s easy to get your content published publicly.  Seeking Alpha is a crowdsourced equity research platform where anyone, regardless of their background or experience, can publish research as long as it meets their quality requirements.

In order to get your research published on Seeking Alpha follow these steps:

• Develop a thesis about one of the stocks you researched in Step 1 above (i.e., stock is undervalued or overvalued due to x, y, and z)
• Write a thorough report (1,000 to 2,000 words long)
• Include lots of charts, graphs, and outputs from your financial model
• Use lots of headings and create a well-structured article
• Generate a bold title for the article the includes your “call” on the stock (i.e., Short: Online Company Inc Overvalued by 40-50%, Target Price is $X.XX per share)
• If your article is not approved, take the feedback provided and keep working on your research and analysis until the report is approved

Once your equity research report is published, you now have a great reason to start contacting Analysts and Associates at companies that cover the stock (or the sector) that you wrote about.  You can also use it in your application form when applying to job postings.

You can do this by following these steps:

• Find job postings at global banks or boutiques that employ analysts in the sector you researched (try looking at efinancialcareers.com for postings)
• In your cover letter (or cover email), include a hyperlink to the Seeking Alpha article you had published, explain your thesis, and why you appear to be correct or incorrect as time has passed since you originally wrote the piece
• Showcase your financial modeling and valuation skills by including the financial model you built to support your research
• Remember to take a very humble approach and explain that you did this exercise for educational purposes and have learned a lot in the process

Networking is by far the best way to get hired (in any industry) and a major component of how to get into equity research.  Networking requires a lot of persistence.  If you meet resistance as you send out your emails, be sure to ask if they know anyone else who has a strong opinion on the stock you researched.

By always asking each person you talk to for a referral, you can have a continual pipeline of new people to connect with.

At the end of the day, it’s a numbers game, and the more people you connect with and share your research with, the better your odds are of getting hired.

Read CFI’s three-part series on how to network effectively !

Thank you for reading the CFI guide on how to get into equity research.  If you follow the above steps, you will learn a lot about what it’s like to be an analyst, and hopefully, improve your chances of getting hired in a super competitive market.

To keep learning and advancing your career, these additional resources will be a big help:

• Overview of Equity Research
• Equity Research Job Description
• Financial Modeling Best Practices
• Analysis of Financial Statements
• See all career resources
• See all capital markets resources
• Share this article

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What is a Equity Research?

Learn about the role of Equity Research, what they do on a daily basis, and what it's like to be one.

• What is a Equity Research
• How to Become
• Certifications
• Tools & Software
• LinkedIn Guide
• Interview Questions
• Work-Life Balance
• Professional Goals
• Resume Examples
• Cover Letter Examples

Start Your Equity Research Career with Teal

Definition of a Equity Research

What does a equity research do, key responsibilities of an equity research analyst.

• Conducting detailed financial analysis and valuation of public companies using various methodologies such as discounted cash flow, comparable company analysis, and precedent transactions.
• Building and maintaining financial models to forecast future earnings and financial performance.
• Writing comprehensive research reports and presenting investment theses and recommendations to clients, sales staff, and traders.
• Keeping abreast of industry trends, market developments, and economic indicators that may impact the sectors and stocks under coverage.
• Regularly communicating with company management teams and industry experts to gather insights and validate assumptions.
• Monitoring news and events that could affect stock prices, including earnings releases, regulatory changes, and macroeconomic data releases.
• Responding to requests for information and analysis from clients, sales teams, and traders.
• Developing and maintaining relationships with institutional investors and presenting investment ideas to them.
• Collaborating with internal teams, including sales, trading, and investment banking, to enhance the firm's product offerings and client service.
• Ensuring compliance with regulatory requirements and ethical standards in the research process.
• Participating in conferences, roadshows, and company visits to gain firsthand knowledge and expertise.
• Continuously improving research methods and staying current with valuation techniques and financial modeling best practices.

Day to Day Activities for Equity Research at Different Levels

Daily responsibilities for entry-level equity research analysts.

• Gathering financial data and market research
• Assisting in the creation of financial models and valuation analyses
• Helping to write sections of research reports
• Monitoring news and developments related to specific companies or industries
• Responding to requests from internal sales and trading staff
• Participating in educational and training opportunities

Daily Responsibilities for Mid-Level Equity Research Analysts

• Independently conducting in-depth industry and company research
• Writing comprehensive equity research reports and investment recommendations
• Building and maintaining complex financial models
• Presenting research findings to sales staff, traders, and clients
• Engaging with company management teams and industry experts
• Contributing to the team's investment strategy and sector outlook

Daily Responsibilities for Senior Equity Research Analysts

• Leading sector coverage and setting the research agenda
• Developing and maintaining relationships with institutional clients
• Providing mentorship and guidance to junior analysts
• Representing the firm at industry conferences and media events
• Driving business development through compelling research and client engagement
• Influencing investment decisions and portfolio strategies at the highest level

Types of Equity Researchs

Sell-side equity analyst, buy-side equity analyst, industry-specific equity analyst, quantitative equity analyst, esg equity analyst, macro equity analyst, what's it like to be a equity research , equity research analyst work environment, equity research analyst working conditions, how hard is it to be an equity research analyst, is an equity research analyst a good career path, faqs about equity researchs, how do equity researchs collaborate with other teams within a company, what are some common challenges faced by equity researchs, what does the typical career progression look like for equity researchs.

How To Become a Equity Research in 2024

Related Career Paths

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Navigating business uncertainties, safeguarding assets through strategic risk mitigation

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Driving financial health and growth, steering company's fiscal decisions and strategies

How to Become an Equity Research Analyst: A Complete Guide

October 17, 2016

I’ve already written more than 10 articles on careers in equity research analysis .  But, I want you to know how to become an equity research analyst. So, this guide is dedicated to you, my dear friend.

Make use of this guide and excel as an equity research analyst.

1. Profiling an Equity Research Analyst

A. who is an equity analyst.

An equity analyst is someone who studies and analyzes financial information and trends for an organization or an industry.

An ER analyst reviews stocks, bonds, and other instruments and writes an unbiased, honest equity research report.

He studies public records of companies to forecast the organization’s impending financial needs.

He writes reports on the organization’s finances and defines the business’s investment potential by giving ratings, like buy, sell, or hold.

He is also accountable for analyzing the budget and making a strategy to get out of debt if the organization is in a poor financial state.

He typically uses technical analysis or fundamental analysis to report, which securities or stocks are expected to be profitable and which are not.

In conclusion, he helps his clients in making good investment decisions based on his reports.

b. What work do you have to do?

As an equity analyst, your work would typically include reviewing of the annual statements (the balance sheet, the profit and loss statement, the cash flow statement, the notes to accounts, etc.), revenue figures and future projections, intelligence concerning key clients, amount of debt the company is carrying, any legal liabilities, present market trends, and the products or services presented by the firm.

After studying all this in detail and analyzing the data, you will have to prepare a crisp but detailed ER report, which will help your clients make optimal decisions about their investments.

The majority of your time will be spent on research. The rest of your time will be spent on modeling and report writing.

It might take some time upfront to build financial models in the first place but once you are done with it you just make minor tweaks and appraise it for earnings announcements and significant channel checks.

In a typical hedge fund or asset management firm you have 1 head person taking the decisions and everyone else below him/her implementing and trying to come up with different ideas.

There is a quasi-mid-level where you could have senior analysts and then just analysts, but it’s much less categorized than say, Investment Banking .

Equity research is more about how good you are at servicing clients and giving insightful ideas – here we don’t need an assembly of people as you do with Mergers & Acquisitions deals.

There are usually 2 – 3 Associates and 1 Senior Analyst on each sector/industry team – so if we’re covering 20 companies, each associate might be covering about 5 companies.

c. Where can you work?

As an equity analyst you would typically work in a brokerage house, securities firm, ER firms or investment banks , commercial or retail banks, NBFCs (non-banking financial corporations), insurance companies, mutual fund companies, pension fund companies, or other such companies.

As an ER analyst, you will have to work on both the sell-side as well as the buy-side.

As a sell-side analyst, you will typically work at an investment bank or with an independent research company, whereas as a buy-side researcher you typically will be working with hedge fund companies or financial management companies.

On the sell side , your research will be motivated by stock or share performance and you will have to develop cash-flow models and earnings of the organizations you follow in a particular sector or industry.

On the buy-side, you will most likely follow some 20 to 25 organizations in two to three industries or sectors.

Here, you will have to focus more on providing relevant intelligence to various portfolio managers who take care of investments for the client.  

ER analysts can find jobs through professional recruiters or job consultants who typically specialize in recruiting in investment banks, private equity , and industry.

Job bulletins and classified advertisements are supplementary methods for finding appropriate jobs in this field.

What prospective employers really seek is for your intangible skill sets to be made tangible .

This realization should empower you significantly because, with this framework, you can concentrate on giving concrete proof that you have the skill set required for being an effective and good analyst.

d. How to give a good interview and get a job

When applying for jobs with these investment banking firms, remember that while covering letters for your resume might be just a procedure for some other jobs, here they’re a reflection of your writing abilities . 

Don’t underestimate the importance the company’s Human Resources will give to them.

In addition to the standard Human Resources generated interview questions, be ready to speak about stocks you like and explain why you like them .

Frankly speaking, remember one important thing – The stocks you choose don’t matter as much as the thought process behind the choice, and what explanation you provide .

You will have to be able to portray a stock in a way that validates sound thinking and an effective thought process.

After all, your prospective job revolves around which stocks you choose to pick and talk about.

Also, be prepared to talk about your opinions on the capital markets and related current topics.

Remember to have a view in everything you say but do not be indecisive, and don’t act like a ‘know-it-all’ either.

Organizations are also looking for those candidates with rational curiosity: people who want to understand every minute detail about an organization or industry and the implications on their customer’s portfolios.

e. How much can you earn?

The average emolument for a typical equity research analyst in the USA is around USD 70,000 to 100,000, while the top ER analysts can earn more than USD 160,000 a year, according to the U.S. BLS (Bureau of Labour Statistics). These numbers include only salary, and not bonuses, benefits, or perks.

Bonuses usually depend on how profitable your company or your team was during the year, plus some performance element measuring how well your stock picks did for the year.

Ranges of base salary can vary widely from company to company, but the average bonus in a typical year is in the range of 25% to 50% of the base.

When it comes to overall earnings an entry-level ER analyst or associate can earn anywhere from USD 80,000 and USD 250,000.

Senior employees such as vice presidents or senior managers can make somewhere in the range of USD 500,000 to USD 750,000, while very senior people like partners or managing directors can make anywhere between USD 800,000 to USD 1.5 million.

Star analysts have been known to take home literally USD 3 million or USD 4 million a year based on their success.

f. How much can you grow?

Advancement typically comes when you leave to join another organization and they promote you, or when you leave to go start your own firm.

Senior Analysts have cozy jobs and few leave readily – but if you do happen to leave and you’re well-respected in the industry, you might get an opportunity to cover your own names.

And if you are able to build a good standing among investors, someone else might just hire you – whether it’s another investment banking firm.

Many times analysts have a difficult time progressing as they tend to bury themselves in Excel sheets all day long– but that’s not the correct approach as no one cares how fancy or elaborate your model is.

Your clients will only care about how insightful your thoughts and suggestions are and how much they understand, like, and trust you.

So you need to get out of the bubble and go out in the industry to meet real people, shape up a reputation, and make worthy decisions if you want to advance in this segment and become a senior equity research analyst.

2. How to Become an Equity Research Analyst

a. Skill sets required

I. education.

For becoming an ER analyst, you should typically have a bachelor’s degree, master’s degree, or a diploma in finance, business administration, or accounting from a reputed university.

Further skill sets required to flourish in this career include good communication skills (both written as well as spoken), an analytical mindset, decisive thinking, and excellent research skills.

If you can combine both – excellent communication, financial analysis , and data analysis skills effectively, you can be very successful in this field like many equity research analysts.

ii. Extra courses (Professional certificates)

Apart from your formal education, for most equity research analysts, it is always a good idea to explore other avenues wherein you can enhance your technical knowledge.

There are various additional professional training courses where you can attend either classroom sessions or virtual classrooms where you can hone your equity research skills and learn various new techniques.

Most of these training courses cover the basics of equity research report writing such as – assessing industry attractiveness, financial modeling , equity valuation techniques, and equity and investment report writing.

Professional certification will seriously increase your chances of getting employment as an equity analyst after completing a formal graduate degree program.

There are institutes such as the CFA Institute that offer the Chartered Financial Analyst credential to contenders who meet the educational necessities and pass three exams.

The exams cover markets, financial accounting, securities analysis, economics, portfolio management, corporate finance , and asset valuation.

Apart from formal education and extra courses, a very important aspect of your learning will be ‘On the job’ training.

You will almost immediately find yourself interacting with portfolio managers, hedge fund managers, the company’s internal salespeople, and traders, as well as communicating the senior analyst’s investment theory after the organization reports its financials .

Important thing is to keep your eyes and ears open and absorb as much as possible.

iii. Internship

A formal graduate degree program might provide the candidate with a chance to complete an internship with a professional investment firm.

These internship programs offer the candidates with ‘hands-on’ guidance in the financial sector and particularly equity analysis.

Employers and other research associates when making recruitment decisions for equity research jobs definitely prefer internship experience in other companies.

A good and successful internship stint can give a lot of ‘on-the-job experience’ and confidence to fresh analysts and can lead to good employment opportunities after finishing their formal MBA program.

This is also why those without any kind of experience in investment banks find it difficult to get hired for research analyst jobs.

I would really insist that all beginners (with no investment banking equity research experience) should always try to seek internships with good and reputed organizations where they can learn new skills and also hone their existing skills.

iv. Understanding of the industry and economy

As an ER analyst, you will have to continually identify and analyze financial information, strategic issues, and trends that affect companies, industries, and markets on a local and universal scale.

You will have to analyze macro factors, various sectors or industries as well as the organizations’ financial results to recognize investment opportunities.

These insights and investment ideas will be used by the readers of your report to develop their strategies and take investment decisions.

Since ER analysts typically focus on a small set of stocks (5-20) within select industries or geographic regions, they become specialists in those specific companies and industries that they evaluate or follow.

Analysts need to comprehend everything about their ‘coverage land’ to give investment endorsements.

Equity research analysts must be conversant with the business regulations and regime policies within the country to decide how it will affect the market environment and business in general.

The more you understand the industries in detail, the easier it will be for you to decipher market dynamics.

b. The attitude he should have to work as a research associate:

 i. patience.

One of the most underrated traits for being a good equity research associate is patience!

Remember haste makes waste.

Your customers trust you and will be basing their buy-sell decisions on your recommendations.

You have to make sure that you do not rush into things but ponder every small detail and try to decipher every tiny bit of intelligence.

You will have to meet various industry participants to talk to them and understand the pulse of the market.

Remember these are professionals and will always be busy. It might happen that even after giving you appointments, they might cancel them due to impending work or meetings.

They might postpone meetings and make you wait for hours together.

But remember that speaking to these experts can give you that edge when you are writing your equity research report .

So you need to pull in all your patience and make sure you don’t divert from your course. If you are persistent and patient, you will be able to eventually get all the interviews you are looking for and add value to your equity research reports.

You will also need all your patience when you are building equity research models .

These models can go from a single sheet to multiple sheets. You will have to link numerous cells and add multiple formulae to create your final model.

Remember to be very patient and concentrate very hard when you are building your models.

One small mistake or one wrong formula can upset your entire model.

Finding that mistake will be a nightmare. It will be like finding a pin in a haystack! So be as patient as possible!

ii. Open to learning all the time

Again it might sound very generic if I say that you need to be open to learning all the time. But believe me, life is all about learning every day .

You have to keep your eyes and ears open all the time and absorb as much as possible.

Another important tip is to read, read, read and read some more.

Read investment reports, read company annual reports, read press releases, read reports on geopolitics, read reports on mergers and acquisitions, read reports on the economy.

In short, read anything that sparks your curiosity, even fiction novels …It’ll help you ignite your mind and thinking out of the box capabilities.

Also, read the daily news and that too from as many sources as possible every single day.

Also, you should start to develop a view of the news and how it affects various organizations, industries, businesses, countries, and even individuals.

The most significant skill set for any ER analyst is to understand and decipher the information. The analyst who can understand intelligence the best and act decisively on that intelligence wins the day.

iii. Understand the subject properly – go into the depth of the matter

For you to provide a recommendation or a direction based on your findings, you will have to be very certain about it.

You’ll have to be able to argue your case soundly for a valuation, in clear and concise terms that your customer can understand.

You need to understand the subject properly and really get into the depth of the matter.

Remember shortcuts will never help you in the long run .

You have to make sure that every statement that you provide in your report has a ‘why’ and ‘so what’ element attached to it.

The reader should be able to understand very clearly what you have proposed and what would happen if he follows your direction.

iv. Verify every piece of information you get

The one thing that is required of you is to be able to establish a passion for investing.

Once you have that passion, you will make sure that whatever you present is of utmost quality and integrity.

To do so you have to make sure that every piece of information that you gather is verified from reliable sources.

Speculation and rumors have no place in this research or rather in any type of research .

You will be collecting intelligence from various sources, so you’ll have to be careful about the quality and authenticity of the source of the information.

It is always better to specify the source of information in your report to add validation to your intelligence.

v. Avoid Conflict of Interest

Conflict of interest can be a major concern in equity research.

Many research firms that create equity reports for their customers are also investment firms, aggressively selling the same shares to them.

This activity makes it very hard to believe that the intelligence provided is completely free of bias.

Hence you have to be very careful that there is no real conflict of interest, and if there is, you have to make sure that it is clearly specified in the report.

c. What should his approach be?

I. he should be unbiased.

You should make sure that the contents of the equity research report should be unbiased.

It should not be partial towards any particular company or a business house.

You have to remember that a lot of people will be making investment decisions based on your reporting.

They trust you and your reporting and you are obliged to provide them with an unbiased opinion.

The more trust you can build with your readers, the more they will vouch for your reports.

ii. Detailed as possible

While writing ER reports, presume that the person who reads is new to the company and he does not have any knowledge about its business.

So, your report should include extensive information about the company, its products, key statements, its management, current market dynamics, future strategies of the company, growth estimates, and the probable risks faced by the organization.

You have to make sure that the information you present is detailed and covers all the above elements properly.

You should not leave any questions unanswered and the reader should not have to go looking for extra information after reading your report.

The best way to approach writing is to write your headlines and subheads first. A strong and impactful headline is critical to enticing readers into looking at your report in the first place.

Solid subheads help to keep the reader engaged, acting as guidelines to keep them go through the remainder of your report.

Make your subheads intriguing as well as informative. Once you’ve written your subheads, appraise them to see what the reader will comprehend if he or she reads only that segment of your report.

Is there a convincing story? Will they get the substance of your report?

iii. Should try to answer ‘so what’

The biggest mistake that most analysts make is just stating the facts in the reports. You have to remember that you are not a reporter but an analyst . The reader expects answers from you – not news!

They want you to give them direction. So you have to make sure that every piece of information you give, has a ‘so what’ attached to it.

For example: Just saying that ‘Company X will have a higher debt-equity ratio in the future as it is planning to take a huge long-term loan’ is not enough.

You have to tell the reader, what will happen because of this. According to you, is this a good strategy for the company or not? What effect will this have on the future revenues and share price of the company?

iv. Consider all the risks applicable

Every ER report should include current and future negative sector and organization happenings that might cause a danger to the investment decision.

Risks can be of various types – operational, financial, economic or connected to legal issues or regulatory procedures.

Though companies are obligated to disclose all the risks which could affect them in their statements, risks are many times subjective and difficult to quantify.

It is your job as an analyst to find out the various risk factors which can affect the performance of the company or the industry and report them in an unbiased manner.

Do not overlook any risk however small or insignificant it might look to you.

Let the readers decide if the risk is worth considering or not – you should report all the probable risks.

v. KISS – ‘Keep it simple and sweet’

This is the ‘Age of Minimalism’. So always remember the principle “less is more”.

This does not mean that you just give a brief snapshot, but explain the concept properly for the reader to make up his mind about the economic strength of the organization.

It means giving precise and relevant intelligence which will assist the reader in quickly comprehending the organization’s money health and take calculated decisions.

vi. Write in such a way that the reader understands clearly

Use simple language which everyone can understand. Do not unnecessarily go for fancy words or jargon which will send your readers running for a dictionary.

You should keep your sentences brief for the same reason you should keep the paragraphs short – they’re easier to read and comprehend.

Pick up any newspaper and observe the writing – you will see short paragraphs everywhere.

They do that to make reading easier, as your brain absorbs information better when it’s divided into small parts.

Every sentence must have one simple thought. More than that creates complications and invites uncertainty.

Another thing to remember is that; don’t keep writing similar stuff over and over again. In other words, write something once properly and definitively, rather than repeating it several times.

When you repeat yourself or keep writing the same stuff again and again, your readers might just go to sleep.

So I think I have tried to be as detailed and lucid as possible in this guide which will definitely help you to become the best ER analyst in the world. Again this is not a shortcut to success, but just a guide that will enable you to plan your journey toward the goal of becoming a very successful ER analyst.

I would like to wish you all the best in your quest to become a successful equity research associate.

Do feel free to send me any queries that you may have.

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Avadhut is the Founder of FinanceWalk. He enjoys writing on Finance Careers topics. Check our Financial Modeling Courses . Contact us for  Career Coaching based on Your Inner GPS.

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How To Do Equity Research: An Actionable Guide

Contents1. Profiling an Equity Research Analysta. Who is an equity analyst?b. What work do you have to do?c. Where can you work?d. How to give a good interview and get a jobe. How much can you earn?f. How much can you grow?2. How to Become an Equity Research Analysta. Skill sets requiredi. Educationii. Extra courses (Professional certificates)iii. Internshipiv. Understanding of the industry and economyb. The attitude he should have to work as a research associate: i. Patienceii. Open to learning all ...

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What does an Equity Research Analyst do?

An equity research analyst is responsible for analyzing stock and securities markets, generating reports and performance projections, and advising clients on the best options for clients' financial portfolios. Equity research analysts should have excellent knowledge of the current stock market trends, especially the availability of the securities to identify investments that would sell in public. They evaluate the clients' needs out of their investment interests and risk appetite. An equity research analyst must be highly-communicative and analytical, especially on responding to clients' inquiries and concerns and informing investment managers on the stock and securities available.

• Responsibilities
• Skills And Traits
• Comparisions
• Types of Equity Research Analyst

Equity research analyst responsibilities

An equity research analyst plays a significant role in evaluating investment opportunities and providing performance projections for clients. They conduct market research, perform fundamental and technical analysis, and develop financial models for various sectors such as healthcare, entertainment, and technology. They also interpret and integrate political and regulatory changes into industry forecasts and valuation models. Additionally, they communicate investment recommendations and contribute to portfolio management processes. As Octavian Ionici PhD from American University states, "Being able to articulate what sparked their interest in the financial field and why they are interested in a chosen role will be an advantage during the hiring process."

Here are examples of responsibilities from real equity research analyst resumes:

• Manage trade executions and broker relationships for all portfolio positions across several banks, prime brokerage accounts and electronic commodities exchanges.
• Perform bottom-up fundamental analysis covering U.S. and European equities focuse on value.
• Experience in client presentation of investment ideas and are responsible of generating detail PowerPoint slides.
• Propose investment recommendations (buy/sell equity securities) base upon a combination of fundamental qualitative and quantitative analysis.
• Support activities including industry analysis, company specific competitive analysis, risk assessment, management assessment and valuations like DCF analysis.
• Develop analytical tools for the traders to analyse volatility and correlation using VBA and SQL.
• Utilize IBM SPSS, a statistical analytic tool, to analyze raw data collect from university applicants.
• Used SPSS to process survey data, generate factor analysis and cluster analysis to determine the internal association.
• Utilize Matlab for calculations and plots relevant for finding detection ranges of submarines and analyzing the sound waves that propagate underwater.
• Participate in securities research program.
• Create and present PowerPoint presentations to both regional and national judg
• Perform fundamental analyses using macro data and company/industry trends to generate actionable investment/trading ideas.
• Provide macro and quantitative analysis to identify investment opportunities for the firm's investment decision making processes.
• Generate, diligence and continuously develop fundamental investment advisory research of public equities as an industry generalist.
• Screen and pitch buying/selling opportunities using extensive DCF and relative value models modify for the unique characteristics of individual sectors.

Equity research analyst skills and personality traits

We calculated that 14 % of Equity Research Analysts are proficient in Financial Models , Macro , and Securities . They’re also known for soft skills such as Computer skills , Math skills , and Analytical skills .

We break down the percentage of Equity Research Analysts that have these skills listed on their resume here:

Constructed and maintained financial models, wrote company and industry-related research notes for publication, and attended industry and company-related briefings.

Conducted macro & micro-economic analyses to identify market trends, industry conditions.

Analyzed potential securities using fundamental analysis and valuation techniques such as Discounted Cash Flow and Relative valuation model.

Monitored current positions in equity portfolios and communicated relevant issues impacting stock holdings to portfolio managers.

Perform bottom-up fundamental analysis covering U.S. and European equities focused on value.

Research methodology was primarily fundamental analysis coupled with a top-down outlook on the economic, competitive, regulatory and legal environments.

"financial models," "macro," and "securities" are among the most common skills that equity research analysts use at work. You can find even more equity research analyst responsibilities below, including:

Computer skills. To carry out their duties, the most important skill for an equity research analyst to have is computer skills. Their role and responsibilities require that "financial analysts must be adept at using software to analyze financial data and trends, create portfolios, and make forecasts." Equity research analysts often use computer skills in their day-to-day job, as shown by this real resume: "established equity research coverage of computer services companies for a regional brokerage firm. "

Math skills. Another essential skill to perform equity research analyst duties is math skills. Equity research analysts responsibilities require that "financial analysts use mathematics to estimate the value of financial securities." Equity research analysts also use math skills in their role according to a real resume snippet: "value-based quantitative analysis and qualitative due diligence on current positions and potential prospects. "

Analytical skills. equity research analysts are also known for analytical skills, which are critical to their duties. You can see how this skill relates to equity research analyst responsibilities, because "financial analysts must evaluate a range of information in finding profitable investments." An equity research analyst resume example shows how analytical skills is used in the workplace: "provide ancillary analytic support for growth equity co-investment opportunities by conducting market research and financial statementand financial multiple analysis. "

Communication skills. For certain equity research analyst responsibilities to be completed, the job requires competence in "communication skills." The day-to-day duties of an equity research analyst rely on this skill, as "financial analysts must be able to clearly explain their recommendations to clients." For example, this snippet was taken directly from a resume about how this skill applies to what equity research analysts do: "generated positive alpha in multiple sectors, including financial services, utilities, telecommunication services, and real estate investment trusts. "

Detail oriented. A commonly-found skill in equity research analyst job descriptions, "detail oriented" is essential to what equity research analysts do. Equity research analyst responsibilities rely on this skill because "financial analysts must pay attention when reviewing a possible investment, as even small issues may have large implications for its health." You can also see how equity research analyst duties rely on detail oriented in this resume example: "analyzed historical financial data and developed detailed financial forecasts. "

All equity research analyst skills

The three companies that hire the most equity research analysts are:

• Bank of America 24 equity research analysts jobs
• JPMorgan Chase & Co. 15 equity research analysts jobs
• Citi 11 equity research analysts jobs

Choose from 10+ customizable equity research analyst resume templates

Compare different equity research analysts

Equity research analyst vs. finance professional.

The primary job of finance professionals is to provide financial services using their knowledge of finance, tax laws, and accounting. These professionals typically help with corporate finance, personal finance, or both. Their duties include helping clients develop financial plans that will ensure their financial stability, developing the company's financial strategy, and forecasting corporate profits and losses. Additionally, finance professionals are responsible for negotiating credit lines, preparing financial statements, and working closely with outside auditors. To become successful in this role, you need to have strong customer service and analytical skills .

There are some key differences in the responsibilities of each position. For example, equity research analyst responsibilities require skills like "financial models," "macro," "equity portfolio," and "fundamental analysis." Meanwhile a typical finance professional has skills in areas such as "excellent interpersonal," "strong work ethic," "financial objectives," and "financial products." This difference in skills reveals the differences in what each career does.

Equity research analyst vs. Investment associate

An investment associate's primary role is to review a company's financial data, recommend investment strategies, oversee the distribution of stocks, and calculate possible risks for business mergers. They also serve as a mediator during agreements between companies during takeovers, monitors stock inventory, sell stocks, and details all financial transactions. In the course of these responsibilities, an investment associate provides administrative support and timely response to client requests as needed, acting as an additional point of communication for clients.

While some skills are similar in these professions, other skills aren't so similar. For example, resumes show us that equity research analyst responsibilities requires skills like "equity portfolio," "fundamental analysis," "technology sector," and "fundamental research." But an investment associate might use other skills in their typical duties, such as, "customer service," "client service," "client relationships," and "wealth management."

Equity research analyst vs. Analyst internship

An analyst internship is a student program where an intern is assigned to assist analyst professionals by analyzing business goals, objectives, and needs. Analyst interns assist in the planning and designing of business processes and suggest recommendations for improvement. They conduct research and analysis to support business operations and resolve issues using systems and data. They also help estimate the costs and benefits of multiple business actions and help the business organization launch new initiatives.

The required skills of the two careers differ considerably. For example, equity research analysts are more likely to have skills like "macro," "securities," "equity portfolio," and "technology sector." But a analyst internship is more likely to have skills like "financial statements," "data analysis," "management system," and "python."

Equity research analyst vs. Finance management analyst

A finance management analyst specializes in performing extensive research and analysis to devise strategies that can help a company achieve its long-term financial goals. Their responsibilities typically revolve around having an in-depth understanding of the company and its services, gathering and reviewing its financial history and other portfolios, and determining investment opportunities to earn a significant profit. Furthermore, a finance management analyst must report their findings and present action plans, providing a comprehensive explanation to officials, all while adhering to the company's policies and regulations.

Even though a few skill sets overlap between equity research analysts and finance management analysts, there are some differences that are important to note. For one, an equity research analyst might have more use for skills like "macro," "equity portfolio," "fundamental analysis," and "due diligence." Meanwhile, some responsibilities of finance management analysts require skills like "financial management," "financial issues," "management reports," and "financial policies. "

Types of equity research analyst

• Finance Analyst

Research Analyst

• Pricing Analyst
• Investment Analyst
• Contract Analyst

Updated June 25, 2024

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The Zippia Research Team has spent countless hours reviewing resumes, job postings, and government data to determine what goes into getting a job in each phase of life. Professional writers and data scientists comprise the Zippia Research Team.

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Equity Research Analyst Related Careers

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An Ultimate Guide to Equity Research

This post was originally published on August 15, 2019 and was updated for relevance on July 29, 2024.

Equity research is a specialized field within the finance industry that analyzes public companies, industries, and the overall economy. It helps investors make informed decisions about buying, holding, or selling investments.

In this guide, we’ll explore equity research, its definition, how to conduct research analysis, what goes into a research report, the various roles involved, key considerations when selecting an equity research firm, career pathways into the equity research industry, and more. 

With that, let’s get started.

What is equity research?

Before we discuss equity research, it’s important to understand the concept of equity. Equity is the full ownership of an asset once its associated debts have been settled. Equity research, or “securities research,” refers to the process investment banks use to understand a company's overall equity or value. 

Equity analysts, often working within an investment bank, lead this process. They create documents that delineate the equity in question within the context of the business, its management, the broader industry, and the economic landscape.

The larger the investment bank, the more reports an equity research team will tend to produce, and the analysis included will be more detailed. Examples of analysis include:

• Review of how the macroeconomic picture is likely to affect the company
• Operational changes or investments that are likely to affect the company’s performance
• Review the company’s financial statements and explanation of changes
• Projections on the status of the company’s revenue (and share price) and where it’s headed
• Recommendations on whether to buy, hold, or sell the company’s equity

How to conduct equity research analysis

Research is the name of the game. An Equity Research Analyst is responsible for providing vetted and trusted insights to make sound and informed investment decisions. This process is typically broken into four stages: 

1. Thorough Research

Equity Research Analysts focus on specific regions and sectors. They leave no stone unturned in conducting extensive research, thoroughly reviewing financial reports, balance sheets in Excel, earnings releases, industry trends, regulatory changes, macroeconomic factors, and more that could impact the companies they are analyzing.

2. Financial Modelling & Valuation

Financial modeling involves creating mathematical representations of a company's financial performance by forecasting future results based on historical data and assumptions. Valuation is used to determine the fair value of a company's stock using methods such as discounted cash flow analysis and comparable company analysis. These tools help evaluate a company's financial health and growth potential to advise on investments.

3. Creating Equity Research Reports

Equity Research Analysts are responsible for condensing their findings into easily understandable reports for investors. We'll expand on this more in the next section. 

4. Communication Skills & Publication

Equity Research Analysts in senior or lead positions often present their findings to their organization or client base. These individuals must be able to simplify complex financial data, so strong communication and presentation skills are essential.

What is an equity research report?

Buy-side or sell-side, an equity research report typically includes the following:

• An industry research overview that covers trends and news related to competing companies.
• A company overview that includes any recent business developments and quarterly performance results.
• The equity analyst provides an investment thesis explaining the reasons behind their prediction of the stock's performance. This section also includes the target share price, which many consider the most critical aspect of the report.
• A financial model-based forecast of the company's income, cash flow, and valuation.
• Risks associated with the stock.

Difference between a career in equity research and investment banking

Investment banking and equity research are similar but have clear distinctions in their intended outcome. Investment banking is all about helping companies raise money through stocks and bonds, offering mergers and acquisitions services, and managing significant financial deals. 

Equity research involves evaluating individual stocks and providing investment advice based on their potential value and performance.

In essence, investment banking focuses on managing financial transactions, while equity research focuses on analyzing and valuing individual stocks.

When considering a career between the two, it's imperative to evaluate the following factors: 

1. Educational Background 

Both career paths require a bachelor's degree in economics, accounting, finance, or engineering. For career growth, a Chartered Financial Analyst (CFA) designation is often required for Equity Research Analysts, while investment banking can require a Master of Business Administration (MBA). Additionally, investment bankers must pass the Series 79 exam , which measures the knowledge needed to perform the critical functions of an investment banking representative. 

2. Career Path 

In investment banking, the career path is straightforward. It starts with being an analyst, then an associate, and climbing to higher positions. In equity research, the career path could be more transparent. Typically, it involves transitioning from associate to analyst, senior analyst, and then to the role of vice president or director of research. Investment bankers have better opportunities to reach top positions because of their involvement in making deals and managing clients. They often go on to work for private equity firms for venture capitalists. Research analysts are frequently seen solely as number crunchers and not thought of as being able to drive substantial business growth.

3. Skill Set 

It should come as no surprise that Equity Research Analysts require strong analytical and mathematical skills to handle complex calculations, build predictive models, and prepare financial statements. They must also be proficient communicators capable of simplifying complex financial data. As for investment bankers, financial modeling and industry analysis are crucial early in their careers. However, as they advance, they transition to a sales-oriented mindset, excelling at closing deals and managing client relationships. 

4. Work-Life Balance 

Equity research is known for long hours, particularly during earnings season, but there are periods of relative calm. Investment banking is another beast, typically requiring brutal hours, often up to 100 hours per week. A recent article in Forbes highlighted that work-life balance has become a significant concern in investment banking. This is particularly after the reported deaths of two Bank of America employees who were said to be working up to 110 hours per week. 

5. Recognition 

Equity research reports offer visibility to associates and junior analysts. Senior analysts are sought after by the media for comments on the companies they cover. Junior investment bankers work in obscurity but gain visibility as they progress in their careers. Visibility for investment bankers significantly increases when they work on large, prestigious deals.

6. Compensation 

Investment banking generally offers higher earning potential compared to equity research. For example, according to Wall Street Oasis (WSO), investment banking associates earn between $150,000 and $200,000 with substantial bonuses, while senior vice presidents or managing directors earn over $400,000 annually. WSO also says entry-level analysts start between $50,000 and $80,000 and have the potential to make up to $500,000 as they grow to leadership positions.

Roles in equity research

In the world of equity research, it is crucial to understand the distinction between a buy-side and sell-side Equity Research Analyst. Below, we'll outline their respective areas of focus and ultimate objectives.

1. Sell-side analysts

Sell-side Equity Research Analysts work for investment banks and provide their clients with sell-side research and recommendations on stocks and other financial instruments. Their primary goal is to generate trading commissions and investment banking business for their firm.

2. Buy-side analysts

A buy-side Equity Research Analyst works for institutions that buy and sell securities, such as mutual funds, hedge funds, and pension funds. Their role involves researching and making investment recommendations for their firm's portfolios.

Best Equity Research Firms 

Below are some of the top-ranking equity search firms. 

• JP Morgan —J.P. Morgan’s Research team uses state-of-the-art technologies and innovative tools to provide clients with top-notch analysis and investment advice.
• Barclays —The equity research teams cover hundreds of stocks across the Americas and Europe, delivering event analysis, stock ideas, and sector themes. They collaborate with other teams to offer clients unique, cross-asset perspectives on industries and markets.
• Credit Suisse AG —The team has original research on over 3,000 companies with thought-provoking thematic analysis, differentiated trading ideas, and coordinated global views. 
• Bank of America Financial Center —The company offers comprehensive research and analysis for both institutional and retail clients. It encompasses over 4,000 companies across 35 global sectors in developed and emerging markets. Its research involves fundamental and technical analysis as well as hedging strategies.
• Morgan Stanley —Through timely, in-depth analysis of companies, industries, markets, and world economies, Morgan Stanley has earned its reputation as a leader in investment research.

Things to consider when hiring an equity research firm

When evaluating an equity research firm, it’s essential to consider the experience and reputation of its analysts, the firm’s track record of accurate stock picks and recommendations, the depth and quality of their research reports, the firm's access to company management and industry experts, their industry specialization, the firm's coverage universe, the timeliness of their research, and the overall transparency and integrity of their research process.

How to get into equity research

If you are considering entering the equity research space, you will likely need a finance, accounting, or economics background. Many professionals in this field begin with a bachelor's degree in finance or a related field. Those seeking career advancement often pursue a master's degree or a CFA designation to enhance their resume.

Research assistant,  junior analyst, or equity research associate are common entry-level roles. Advancing in your career will require gaining experience in financial analysis, modeling, and report writing. Developing a solid network of connections within the industry is also crucial for discovering new opportunities in equity research. Like all areas of business, networking is critical.

Staying up to date on the latest trends and news within the equity research space is important for understanding the workings of the stock market and developing strong analytical and critical thinking skills. This is crucial for ensuring high-quality, long-lasting success in equity research.

The Importance of Equity Research

As we've discussed, equity research is essential for investors as it provides valuable information and investment recommendations. It involves digging into company finances, creating financial models, and meeting with industry experts. 

Equity research supports investment decisions, evaluates securities, and guides investors and fund managers. For example, it helps predict the future growth potential of tech companies, find investment opportunities in the pharmaceutical industry, and understand how macroeconomic trends affect different sectors and stocks.

Final Thoughts 

Equity research is crucial in empowering investors to make informed investment decisions. Through comprehensive analysis of financial data, market trends, and company performance, equity research provides valuable insights that enable investors to identify attractive opportunities and manage their portfolios effectively. By leveraging the expertise of research analysts and utilizing robust analytical techniques, investors can gain a deeper understanding of the risks and potential returns associated with specific investment opportunities. Ultimately, equity research is a fundamental tool for institutional and retail investors, helping them navigate the complexities of the financial markets with confidence and clarity.

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What do you actually do in equity research.

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Equity Research

The specific responsibilities of an equity research analyst can vary quite a lot on a day-to-day basis but still follow a predictable pattern over the course of a quarter. Let's look at what the typical day of someone in equity research looks like.

Broadly speaking, the pace of work you’ll be doing outside of earnings season is slower than the sprint associated with publishing reports during earnings. Let’s start with a normal day outside of earnings first.

Earnings season refers to one of four periods in a year when companies you cover report their results for the most recent quarter.

If you're interested in breaking into equity research, check out our course , which will teach you all of the modeling, valuation, stock pitching, and recruiting strategy you need to get the job.

Outside of Earnings Season

Equity research analysts typically start their day around 7 AM. At most investment banks, that’s around the time when the Morning Call is held, which is where equity research analysts present their most recent actionable reports and trade ideas to the sales team.

As the sales team is generally one of the first points of contact between clients and a new piece of research, they ask the presenting equity research analysts questions to refine their own understanding of the pitch by anticipating what their clients might later ask them.

Attending the morning call is optional, though senior analysts aim to make many appearances throughout the year to broaden their reach. As a junior, you’re likely going to attend to learn from other presenters or to help answer some questions that you're better equipped to handle. On occasion, you might be asked to speak as well.

Keeping Up with News

After the morning call, you’ll spend a large portion of your day keeping up with news and events relevant to coverage.

As a new hire, you’ll spend a considerable amount of time after hitting the desk ramping up on your coverage by reading news and industry reports. You’ll need to have an understanding of overall economic trends and market developments to the extent that they impact the stocks you cover, whether directly or tangentially.

More seasoned employees still spend a lot of time finding insightful news to stay current and continue to refine their views.

Generally, you’re going to get hundreds of emails a day based on alerts you’ve set up to capture any announcements which could be impactful for your coverage, so expect to spend a good amount of time sifting through those to see what matters.

Publishing Reports

These are the most common types of reports you’ll create outside of earnings season:

Company Initiations – Equity research teams publish Initiation of Coverage reports when they assume coverage of a new stock. These reports establish the team’s initial rating and views on a company and include detailed information on its business model, competitive landscape, and key financial metrics. From the reader's perspective, they’re a great source of information for someone who’s starting to learn about a company or industry.

Rating Changes – Published to revise a team's rating on a stock. These reports often have a significant impact on a stock's price especially when the publishing team is well-followed by investors and the broader media. These reports include the rationale behind the rating change and a new price target when applicable.

Price Target Revisions / Model Updates – Issued when a team changes the valuation methodology used to value a stock, or alongside publishing a model update which changes the financial metric inputs into an existing valuation framework. These reports also tend to be stock-moving, depending on the influence of the analyst team.

Thematic Reports / Industry Updates – These reports focus on broad themes specific to an equity research team’s coverage. They are normally longer-term projects that are worked on over several weeks or longer.

Interacting with Clients

Throughout the day, you’ll speak with the sales team to set up calls with clients they manage. You’ll also be expected to keep the trading team updated on certain stock-moving news, especially as traders are spread too thin to keep track of relevant news across all the stocks they trade.

Both sales and trading can be thought of as another client to equity research, as the same rules which govern interactions between outside clients and equity research also apply to anyone outside of the equity research department within an investment bank.

You'll speak with many types of clients on the job which exposes you to different investing styles and stock theses.

What Kinds of Requests Do You Get from Clients?

Data / Industry Model Requests – Equity research analysts often get requests for the large datasets of industry-specific metrics they maintain. Clients often ask for these datasets to use in their own analysis or models and ask equity research to help them interpret any trends.

Company Model Requests – These requests come from clients who want to compare their predictions with your team’s. They also typically ask questions about specific assumptions in your model, such as why you might be forecasting 3Q23 revenue growth that’s 200 basis points higher than management’s most recent guidance, for example.

Industry Calls – Industry calls are requested by investors who are new to the space or by those who have recently picked up coverage of a stock in your coverage. You typically discuss overall market trends, your future expectations, and the nuances of analyzing the industry from your perspective.

Specific Company Calls – These calls happen when a client wants to learn more about your view of a particular company. You would discuss your rating on the stock, talk about recent price movements, and answer questions about potential risks to your view (i.e., what would it take to change your rating on the stock?).

During Earnings Season

Earnings season is the time when publicly traded companies release their quarterly financial reports. These reports give equity research analysts actual data to which they can compare their prior estimates, and provide a new set of data points to inform forecasts for future periods.

Earnings season happens four times a year. It's usually a really hectic time for equity research analysts due to the speed at which they have to synthesize a lot of new information to publish reports.

Responsibilities During Earnings Season

Earnings Previews – During the days leading up to a company reporting its earnings, you’ll write an earnings preview note which gives investors an idea of what to expect from the upcoming release. These notes can be used to reiterate an equity research team's views, or as a final opportunity to change estimates reflecting any new information they may have gathered before an earnings release.

Set Up the Model – The day before an earnings release, equity research juniors set up the models for upcoming releases by building and formatting a variance table , which just shows how actual reported results differed from the analyst’s expectations, consensus estimates, and any previous management guidance.

Write a First Take Note – In the U.S., core stock market hours are from 9:30 AM to 4:00 PM on weekdays. Companies release their financials either before the market opens (generally around 7 AM, or sometimes earlier) or after the close, typically around 4:30 PM .

When results hit, you’ll have ~30 minutes to analyze the financials and publish what’s known as a “first take” note. While there's a lot of stress that comes with writing, proofreading, and publishing a note in such a short time frame, these notes are generally pretty simple. They include high-level takeaways from a company’s earnings results and include a variance table.

Get On the Earnings Call - After an earnings release, a company’s management hosts an earnings call where they discuss the results of the previous quarter, issue guidance, and answer questions from the equity research analyst community.

As a junior, you’ll be using this time to update the model based on any new insight you can gather from the call, and take copious notes which you’ll use to write a final note to wrap up that company’s earnings season. Your senior analyst will be using that time to come up with engaging and insightful questions to ask the management team on the call. You’re likely to do some of this part of the job too, even at the junior level.

Update the Model and Publish a Final Takeaways Note – Finally, you’ll write a key takeaways note to summarize the company’s earnings release and management call, and highlight any changes to your modeling or investment thesis. These notes generally include price target revisions, and upgrades or downgrades to the overall rating when warranted.

Overall, the responsibilities of an equity research analyst can vary quite a lot on a day-to-day basis but still follow a predictable pattern over the course of a quarter. The main responsibilities include keeping up with relevant news and events to inform your views around a group of stocks or industries, which are shared with clients through research reports and live interactions.

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Equity Research vs. Investment Banking: What's the Difference?

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Equity Research vs. Investment Banking: An Overview

Investment banking may no longer be the undisputed first choice for the best and brightest. Instead of streaming into investment banking , many top graduates are now opting for careers in management consulting, technology, or launching their own startups. While the allure of investment banking may have dimmed, due to long hours and a stressful work environment, the industry still attracts many workers. Equity research is also another destination for prospective financial employees.

Equity research is sometimes viewed as the unglamorous, lower-paid cousin of investment banking. The reality, though, differs from this widely held perception. In order to help you formulate your own opinion, here's a head-to-head comparison of equity research (sell-side research that is conducted by the research departments of broker-dealers) and investment banking in 10 key areas.

Key Takeaways

• A career in finance can take many paths, including investment banking and equity research.
• Investment bankers work on M&A deals and issue new securities to the market.
• Equity researchers conduct thorough analysis and research of companies and their share price to issue investment recommendations.
• Each role has different responsibilities and hours, which will suit prospective candidates differently.
• The pay for investment bankers is a bit higher in the early career stage, especially when bonuses are included, and this gap further widens over the course of a career.

Equity researchers analyze stocks to help portfolio managers make better-informed investment decisions. Equity researchers employ problem-solving skills, data interpretation, and various other tools to understand and predict a given security’s behavioral outlook.

This often involves quantitatively analyzing a stock’s statistical data in relation to recent market activity. Finally, equity researchers may be tasked with developing investment models and screening tools that identify trading strategies that help  manage portfolio risk .

Equity researchers are responsible for identifying patterns with current market price changes and using this information to create algorithms that identify profitable stock investment opportunities. The equity researcher should be able to understand the idiosyncratic differences between various international markets in order to cross-compare domestic and foreign stocks.

The low end of the salary range is $52,000, while the high end sits at $147,000. The average salary is over 93,000 as of 2024. Private equity firms and other financial services companies are the chief employers of equity researchers. The majority of these jobs are based in New York City, although firms are increasingly offering positions in major metropolitan hubs like Chicago, Boston, and San Francisco.

Investment banking is a specific division of banking related to the raising of capital for other companies, governments, and other entities. Investment banks underwrite new debt and equity securities for all types of corporations; aid in the sale of securities; and help to facilitate  mergers and acquisitions , reorganizations, and broker trades for both institutions and private investors.

Investment banks also provide guidance to issuers regarding the issue and placement of stock. Investment banking positions can include elements of consulting, banking, capital market analysis,  research , trading, and much more. Each requires a specific skills to be developed.

A degree in finance, economics, accounting, or mathematics is a good start for an investment banking career. However, most investment banking jobs focus their recruiting on elite universities.

Those interested in investment banking should strongly consider pursuing a  Master of Business Administration  (MBA) or other professional qualifications.

Great people skills are a huge positive in any investment banking position. Even dedicated research analysts spend a lot of time working as part of a team or consulting with clients. Some positions require more of a sales touch than others, but comfort in a professional social environment is key. Other important skills include communication skills (explaining concepts to clients or other departments) and a high degree of initiative.

1. Work-Life Balance

Equity research is the clear winner here. Although 12-hour days on weekdays are the norm for equity research associates and analysts, there are at least phases of relative calm. The busiest times include initiating coverage on a sector or specific stock, and earnings season when corporate earnings reports have to be analyzed rapidly.

The hours in investment banking are almost always brutal, with 60-80 hours per week being a baseline for investment banking analysts (the lowest on the totem pole). During busy times, work weeks can be up to 100 hours or more.

There has been a growing backlash against the atrocious hours demanded by investment banking analysts. In response, Goldman Sachs has enacted a rule guaranteeing that bankers will not have to work between 9 p.m. Friday and 9 a.m. on Sunday. These restrictions may do little to change the "work hard, play hard" culture of investment banking.

The most common complaint of those who have quit investment banking is that the total lack of work-life balance leads to burnout. That complaint is seldom heard from those employed in equity research.

Major financial jobs tend to be concentrated in major financial hubs such as New York, Chicago, London, and Hong Kong. This is no different for equity research analysts and especially investment bankers, many of whom are paid to relocate to their firm's home city.

2. Visibility

Equity research is the winner in this area as well. Associates and junior analysts often receive recognition for their work by being named on research reports that are distributed to a firm's sales force, clients, and media outlets.

Since senior analysts are recognized experts on the companies they cover in a sector, they are sought after by the media for comments on these companies after they report earnings or announce a material development.

Investment bankers, on the other hand, toil in relative obscurity at the junior level; however, their visibility increases significantly as they climb the investment banking ladder, especially if they are part of a team that works on large, prestigious deals.

3. Advancement

Investment banking wins in this area. There is a clear path with defined time frames for career progression in investment banking. This begins with the analyst position (two to three years), then transitions to an associate position (three-plus years), after which one is in line to become a vice president and eventually director or managing director.

The career path in equity research is less clearly defined but generally goes as follows—associate, analyst, senior analyst, and, finally, vice president or director of research. Within the firm, however, investment bankers probably have better prospects for reaching the very top, since they are deal makers and manage relationships with the firm's biggest clients.

Research analysts, on the other hand, might be viewed as number crunchers who do not have the same ability to bring in big business.

4. Job Functions

Investment banking probably wins here as well, albeit only over the longer term. Equity research associates start off by doing a lot of financial modeling and analysis under the supervision of the analyst who is responsible for the coverage of a specific sector or group of companies.

Also, associates also communicate to a limited extent with buy-side clients, top management of the companies under coverage, and the firm's traders and salespeople. Over time, their responsibilities evolve to less financial modeling and a greater degree of report writing and formulating investment opinions and theses; however, there isn't a great deal of variability in the job functions of associates and analysts. What varies is the relative time spent on these functions.

Investment bankers, on the other hand, spend the first few years of their careers immersed in financial modeling, comparative analysis, and preparing presentations and pitchbooks . But as they climb the ladder, they get the opportunity to work on exciting deals such as mergers and acquisitions or initial public offerings.

Research analysts only get this opportunity occasionally, when they are brought "over the wall" (the "wall" refers to the mandatory separation between investment banking and research) to assist on a specific deal involving a company that they know inside out.

5. Education and Designations

A bachelor's degree is a must for any aspiring equity research analyst or investment banking associate. Common areas of study include economics, accounting, finance, engineering, computer science, mathematics, or even physics. While it is possible to get hired with just a bachelor's degree, further qualifications can be used to get hired. They are also great for furthering one's career.

The difference between an equity researcher and an investment banker is determined by what post-graduate credentials are usually obtained. Most equity researchers earn a Chartered Financial Analyst (CFA) designation and most investment bankers get a Master of Business Administration (MBA) degree.

The CFA, widely regarded as the gold standard for security analysis, has become almost mandatory for anyone wishing to pursue a career in equity research. But while the CFA can be completed at a fraction of the cost of an MBA program, it is an arduous program that needs a great deal of commitment over many years. Being a self-study program, the CFA does not provide an instant professional network as an MBA class does.

The MBA curriculum, by virtue of being more business-oriented and less investment-oriented than the CFA, makes it more suitable for the investment banking profession; however, the competition to get into the best business schools—which is where most Wall Street firms hire their associates—is intense. Many aspiring investment bankers enter into some other financial field, perhaps working as analysts or advisors, and work toward their MBA.

Investment Bankers are required to pass the FINRA Series 79 Investment Banking Representative Exam.

6. Skill Sets

Both jobs require a great deal of analytical and mathematical/technical skills, but this especially applies to equity research analysts. These analysts need to be able to perform complex calculations, run predictive models, and prepare financial statements with quick turnarounds.

As noted earlier, financial modeling and in-depth analysis are common to both investment bankers and research analysts in the earlier stages of their careers. Later on, the skill sets diverge, with investment bankers required to be adept at closing deals, handling large transactions, and managing client relationships.

Research analysts, on the other hand, need to be effective at both verbal and written communication and have the ability to make balanced decisions based on rigorous analysis and due diligence .

7. External Opportunities

Successful research analysts and investment bankers generally have no shortage of external opportunities because of their experience, knowledge, and skills. Research analysts are likely to gravitate toward the buy-side (i.e., money managers, hedge funds, and pension funds), while seasoned investment bankers usually join private equity or venture capital firms.

8. Barriers to Entry

Both investment banking and equity research are difficult areas to get into, but barriers to entry may be slightly lower for equity research. Investment banking tends to draw more applications, due to prestige and higher pay.

9. Conflicts of Interest

Although investment bankers and research analysts both have to steer clear of conflicts of interest , this is a bigger issue in equity research than in investment banking. This was highlighted by the U.S. Securities and Exchange Commission's (SEC)  enforcement actions against 10 leading Wall Street firms in 2003, relating to analyst conflicts during the telecom/dot-com boom and bust of the late 1990s and early 2000s.

Under the settlement, the firms paid disgorgement and civil penalties totaling $875 million, among the highest ever imposed in civil securities enforcement actions. The 10 firms also had to agree to undertake a host of structural reforms designed to completely separate their research and investment banking arms.

10. Compensation

Both investment banking and equity research are well-paid professions, but over time, investment banking is a much more lucrative career choice.

Investment bankers are famous for their high pay and large signing bonuses. According to the online finance community "Wall Street Oasis," summer interns earn the equivalent on a pro-rata basis of around $77,000, plus a signing bonus of around $6,000 . First-year analysts earn an average salary of $80,239 in 2024, plus bonuses, according to PayScale.

Total compensation will vary greatly depending on job location, company, and the employee's performance review.

The real moneymakers, however, are investment banking associates, who earn between $150,000 and $200,000, with a 50% to 100% bonus. It is not unusual for total compensation for a senior vice president or managing director to exceed $400,000 annually.

The average equity research analyst earns over $93,000 in annual compensation in 2024, according to PayScale, plus a bonus. While it's higher than investment banking analysts starting out, this profession doesn't typically see the same magnitude of bonuses or salary growth as the career progresses. Research analysts indirectly generate revenues through sales and trading activities that are based on their recommendations.

The reputation of a firm's research department may be a significant factor in swaying a company's decision when selecting an underwriter when it has to raise capital. But even though the investment firm may make a substantial amount through underwriting fees and commissions, research analysts are prohibited from being compensated directly or indirectly from investment banking revenues.

Instead, research analysts are compensated over and above their salaries from a bonus pool. These periodic bonuses are determined by a number of factors including trading activity based on the analysts' recommendations, the success of such recommendations, the profitability of the firm, and its capital markets division and buy-side rankings.

Nonetheless, due to larger bonuses, entry-level investment bankers may receive total compensation that is higher than their research counterparts, and this gap may widen markedly over time.­

Is Equity Research the Same As Investment Banking?

No, equity research is not the same as investment banking. Both jobs have similarities but clear distinctions in overall purpose. Equity researchers evaluate companies with the goal of making investment recommendations. They analyze a company in all aspects, from its financials to its competition to its industry outlook, and its share price, to determine how the company might perform in the future and how its share price might move. Investment bankers also analyze companies in a similar fashion, but their goal is to determine whether a company is suitable for a merger or acquisition.

What Skills Do You Need for an Equity Research Job?

The skills required for an equity research job include an understanding of finance, economics, and accounting. An equity researcher must be able to analyze a company's financial statement. Equity researchers should also know financial modeling, Excel, and valuation methods. In addition to the quantitative skills required, equity researchers should be able to write well as they will be writing investment recommendations based on their quantitative analysis.

How Many Hours Does an Equity Research Associate Work?

An equity research associate typically works 55 to 60 hours per week, which can increase to 70 to 80 hours per week during earnings releases. Typically, equity researchers do not need to work weekends. The hours for an equity research associate or analyst are often less than that of an investment banker, who often has to work weekends.

Overall, if one has to make a choice between embarking on a career in equity research versus one in investment banking, factors such as work-life balance , visibility, and barriers to entry favor equity research. On the other hand, factors like prospects for advancement, job functions, and compensation tilt the scales in favor of investment banking. Ultimately, however, the choice comes down to your own skill set, personality, education, and ability to manage work pressures and conflicts of interest.

Payscale. " Average Equity Analyst Salary ."

Mergers and Inquisitions. " The Equity Research Associate: Remnant of a Dying Industry, or the Hero That Gotham Deserves ."

Career Principles. " Investment Banking Hours: The 100-Hour Work Week ."

Forbes. " After Complaints of ‘100-Hour’ Workweeks, Goldman Sachs Is Allowing Bankers To Take Off on Saturdays ."

FINRA. " Series 79 – Investment Banking Representative Exam ."

U.S. Securities & Exchange Commission. " Ten of Nation's Top Investment Firms Settle Enforcement Actions Involving Conflicts of Interest Between Research and Investment Banking ."

Wall Street Oasis. " What Is a Summer Analyst (SA)? "

PayScale. " Average Investment Banking Analyst Salary ."

Wall Street Oasis. " Investment Banker Salary & Compensation, Average Bonus in Banking ."

PayScale. " Average Equity Analyst Salary ."

U.S. Securities and Exchange Commission. " Commission Approves Rules To Address Analyst Conflicts; SEC Also Requires Edgar Filings by Foreign Issuers ."

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The 6-8 Tactics for Being a Successful Equity Research Analyst

At the end of a typical work day, do you feel as though you achieved most of what you set out to do that morning?  Are you regularly being acknowledged, or even rewarded, for doing a great job?  If you answered “yes” to these questions, read no further.

But if you’re like the majority of equity research analysts I meet, they’re spending 50-70 hours at work each week, yet are not seeing an improvement in their stock picking performance or, for the sell-side, are not gaining more client votes.

One of the quickest ways to resolve this common challenge is to follow these 3 steps:

• Step 1: Set two professional goals
• Step 2: Utilize 6-8 tactics to achieve those goals
• Step 3: Once a week, review one week back and one forward to see if your day-to-day activities are perfectly aligned with steps #1 and #2 above

The best paid analysts ensure all of their day-to-day activities are supporting these 6-8 tactics

Let me take you through an example of how these three steps almost always guarantee success.  Let’s first start with Step #1 above.  Having coached hundreds of equity research analysts on time management, I’ve concluded there are only two primary goals:

• Generate alpha (for your firm or clients)
• Get recognition for your stock insights or picks (from your boss or clients)

Now that we have Step 1 out of the way, moving onto Step 2 – there are 6 to 8 tactics for achieving these goals:

• Distill macro, industry and company information to identify the most important critical factors for your assigned stocks (see this post for the “how to”)
• Build/contact network of informed/accurate information sources to identify/validate your out-of-consensus views for your critical factors (see this post for the “how to”). It’s worth mentioning that calling a company’s IR contact or simply accepting management’s guidance does not fulfill this tactic.
• Generate a financial forecast(s) more accurate than consensus by using unique insights not held by consensus
• Apply the most appropriate valuation method(s) and multiple(s) to create a price target(s) more accurate than consensus (see this post for the “how to”)
• Ensure you’re getting into or out of a stock at the ideal time (not early or late)
• Effectively communicate your stock recommendations, including unique insights and catalysts

Sell-side analysts have these two additional tactics:

• Create research and events valued by clients on topics not being discussed by others in the financial market or media
• Identify and build relationships with new clients likely to provide profitable contribution

The chart below contains the responses from 50 buy-side and sell-side analysts I surveyed on this topic, ranking the eight tactics’ importance in helping the analysts achieve their goals.  The results are sorted from “most important” to “least important” based on their responses.  It’s interesting to see the highest-rated tactics are from the sell-side for supporting their client facing goals:

I share these results:

• To show not all tactics are considered equally important
• To question aloud, could part of the mass exodus from actively-managed funds be due in part to analysts placing a relatively low priority on tactics that pertain to stock picking (the three lowest-ranked tactics above)?

Getting back to the original goal of this post, the toughest part of making the most of your professional time is ensuring all of your day-to-day activities support the 6-8 tactics above, and in the right weighting.

I’ll use the Jenga game to illustrate this point, which starts with 3 blocks on 18 levels, for a total of 54 blocks.  Imagine each block represents 10 minutes of your day (equivalent to a 9 hour work day).  How many would you remove for activities that don’t directly support the 6-8 tactics above?  (And for this illustration, we’re not going to stack the extra blocks back on the tower…consider them time lost forever.)  Would your tower look solid? Like Swiss cheese? Or worse yet, fall over? Be careful not to mischaracterize more of your time as “supporting a tactic” than is realistic. As I discuss in this post , a good portion of reviewing emails, voicemails or news that’s widely disseminated doesn’t truly support the tactics above.

If you think there’s room for improvement (I find over 90% of analysts I coach want help in this area), go to Step 3, by setting aside 15 minutes every week to have a meeting with yourself.  Ensure it’s at a quiet, uninterrupted time when you have access to your calendar and to-do list (e.g. Saturday morning, Friday afternoon, Sunday evening).  At each meeting, look at your calendar and ask yourself these questions:

• What did I do this past week that supported the 6-8 tactics above?
• Are my activities ensuring all of my key tactics are being supported?
• What do I have scheduled on my calendar for the next week that will support my key tactics above?

The best analysts fill their days with the right balance of activities that ultimately support all of their tactics, which in turn allows them achieve their goals.  They are all aligned like the pyramid below.  This post may help if you’re looking for steps to get more efficient with your time.

If you want to make improvements in this area, I challenge you to immediately open your calendar (before finishing this post) and create a recurring event for your 15-minute meeting going forward (mine is at 9 am every Saturday). If, after four weeks, you don’t see a major improvement, let me know because you’ll be the first analyst I know where following these steps didn’t have a meaningful impact.

This Best Practice Bulletin™ targets #6. Productivity of GAMMA PI™, within our Pathway to Success Framework

Let me know if this Best Practice Bulletin™ helps and how I can improve upon this best practice. If you’re interested in exploring this topic further, AnalystSolutions provides equity research training with a specialized workshop to help Maximize Your Time for Alpha Generation .

Improve you or your team’s stock picking and communication skills with our equity research analyst training tools, which includes workshops such as the one above, as well as our GAMMA PI™ assessment and one-on-one coaching .  Also, consider ordering the book that inspired the founding of AnalystSolutions and the Best Practices Bulletin: Best Practices for Equity Research Analysts .

Visit our new Resource Center to find more helpful articles, reference cards, and advice towards your growth as an Equity Research Analyst.

©AnalystSolutions LLP All rights reserved.  James J. Valentine, CFA  is author of  Best Practices for Equity Research Analysts , founder of  AnalystSolutions  and was a top-ranked equity research analyst for ten consecutive years

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