Getting a Job as an Equity Research Analyst

If you’re currently an equity research analyst, I hope you realize how blessed you are to work in such a rewarding field.  It’s fast-paced, challenging and opens doors to meet some of the greatest minds in the business world (not to mention the job pays well in most countries).

If you’re looking to get hired (or re-hired) in an equity research role, I should probably also mention the darker side, namely the industry is in decline (likely on a secular basis) and if active money management performance doesn’t improve significantly, there’s no reason to expect the trend to reverse.

Landing a job as an equity research analyst can be difficult, but the positions are out there for those who are passionate and persistent

With that said, there are always openings in this field, especially for entry-level positions.  I started my first post-college job search for an equity research job in the midst of a recession and was told I would never find a job on Wall Street only to receive interviews with five NYC firms–all for entry level roles.

When searching for a job as an equity research analyst, I recommend answering these questions first:

1. Where (geographically) do you want to work? If you’re flexible, find the cities that have the most analysts because if you outgrow your job with one employer you’ll have plenty of other local options.
2. Which firms could you see yourself working for? Buy-side is very different than sell-side while long-only are very different than hedge funds.  Furthermore, some shops expect their analysts to be deep dive experts while others are looking for nimble generalists.
3. What initial role are you seeking? Are you willing to start as an “associate” or are you expecting to have full coverage the day you arrive?  Like most fields, there are more entry level roles open than senior roles.

Here are some tips on finding that role:

1. If you’re flexible on location, I’ve found the largest population of traditional buy-side and sell-side equity research analysts are in these cities:
   1. New York
   2. Boston
   3. San Francisco
   4. Chicago
   5. Toronto
   6. London
   7. Frankfurt
   8. Paris
   9. Tokyo
   10. Hong Kong
   11. Seoul
   12. Singapore
   13. Sydney
   14. Shanghai
   15. Mumbai
2. I’m not a big fan of looking on job posting sites/boards, but it can be a good place to start (see my preferred method below). Look for postings on the big sites (e.g. ZipRecruiter, Monster.com, etc. in the U.S.) as well as the CFA Institute’s Career Center.
3. My preferred method works the other way, by finding the firms where you would like to work and then canvass everyone you can find within the firm to ensure you’re considered for any potential openings. If you’re in the U.S., you can find the names of most sell-side and even some buy-side firms using the SIPC directory (type the city name in the search box): http://www.sipc.org/list-of-members/
4. Target firms that employ a large amount of CFAs (buy-side or sell-side) because they usually have cultures that reward good research. If you narrow your search down to a few firms in a given city, use the CFA Institute’s on-line directory to search for CFAs by firm name which will come back with a list of chartered financial analysts (not necessarily all working in equity research)
5. If you’re looking for buy-side firms:
   1. The top investment firms can be found on Institutional Investor’s site (search the Internet for “Institutional Investor 300” for a direct link…you may need to sign up for a free account to access)
   2. Another way to find the largest buy-side firms is to use Bloomberg’s HDSM function. Enter 5-20 stock tickers of the largest companies in a sector and it will yield a list of the largest holders (note some of these are passive investors and will not have analyst roles)
   3. Even better, FactSet has an “Ownership” report that provides a similar list of the largest buy-side firms that hold a stock, and also provides a field that explains if the holdings are active or indexed as well as the contact name for the fund
6. If you’re looking for sell-side firms:
   1. Even though Institutional Investor requires a subscription to access the details of its annual analyst rankings, it provides free access to a list of the top firms in each region (search for the page with the “All-American [or other region] Research Team” and when found, look for “The Leaders” which should be within the right column navigation pane).
   2. If you’re interested in covering a specific sector, search to see which firms cover a given stock, which can be done by reviewing sell-side coverage through any market data provider (use the EEB function in Bloomberg). If you don’t have access to a market data provider, review the transcripts from some of the larger company’s recent calls where the Q&A section usually includes the names of those asking questions (who typically are covering the stocks)
7. Once you’ve decided on the firms you want to target, avoid going through the human resources departments, which means you’ll need to find at least one good primary contact at each firm. This can be done a few ways:
   1. If you’ve recently left a firm (buy-side or sell-side), utilize the institutional salespeople you know because:
      1. They are more plugged in than almost any other role within our industry
      2. They often work hard in filling empty roles because they get instant loyalty from the person they place (i.e. future votes and commissions)
   2. If you have experience in a specific field outside of equity research, which may (or may not) help you, send your resume to all of the sell-side analysts who cover the sector(s) and mention they can pass along your resume to buy-side clients if they know of an opening. Your experience may intrigue the sell-side analysts who receives your resume, but even if he/she doesn’t have an opening, they often know of other openings in their firm and are always looking for ways to help their buy-side clients (I landed my first job in equity research because the analyst who received my resume passed along to a colleague who was looking to hire)
   3. Use the CFA Institute directory mentioned above to find CFAs within the firms you target because they often include a firm’s senior thought leaders
   4. Send your resume and cover letter via email (assuming you can find the contact’s email address) AND via regular snail mail (these days, receiving a hard copy resume can be a real stand-out compared to all your competitors seeking the same job)
8. Ensure your resume is well written
   1. It shouldn’t be more than a page unless you have at least 15 years of experience working in three or more very different roles (and even then, I’m not sure why it needs to be more than page)
   2. Focus on results, not experience. If you have relevant experience, explain “Generated 100 basis points of alpha in my universe of stocks.” If not, highlight how you made a difference such as: “Was rated top intern among 15 eligible, due to my processing time being 25% above average.”
   3. Have at least two friends (or college professors) proof your resume for mistakes and grammatical improvements
   4. Once your resume is clear of any mistakes, if you have access to industry professionals, ask at least two to review from a marketability standpoint (AnalystSolutions provides coaching in this area if you’re seeking help)
   5. Highlight only the most important relevant roles, starting with most relevant. A resume is not a legal document of everywhere you’ve worked but rather should highlight your key accomplishments as they relate to the job for which you’re applying. Only start a resume with educational experience if you don’t have any relevant work experience
   6. If you have experience in financial services, but not equity research, highlight that you’re “part of the club” which may help get your foot in the door. For example, noting you were an intern for a financial adviser of a prominent firm will show you were skilled enough to get past a rigorous screening process.
   7. Don’t over focus on prior experience in a specific sector (e.g. aerospace engineer, consumer product marketing manager, etc.) unless you’re targeting an open role that would cover that sector. If you’re applying for a role that will be working under a senior analyst (such as the sell-side), avoid trying to outsmart them with your industry knowledge because you run the risk of them finding missing pieces in your understanding, or if you are very experienced, they may feel threatened that you know more than they do (this may seem ridiculous but I’ve seen it happen).

While on the topic of building a resume, I should probably address this common question I get asked “Should I get a CFA or MBA?”  I would definitely not recommend spending two years getting an MBA if the goal is to be an equity research analyst because most employers aren’t looking for this.  If you feel compelled to get a graduate degree, focus on finance (after spending a year working on an MBA, I switched to a master’s degree in finance because I realized that’s where my true passion lied). As for the CFA designation, I strongly recommend working towards passing the first level before beginning to send out resumes, because it shows you’re more serious about this field than 90% of the other resumes the prospective employer receives.

Let me know if this Best Practices Bulletin™ helps and how I can improve upon it. If you’re interested in exploring this topic further, AnalystSolutions provides one-on-one coaching to help with all aspects of equity research, including getting a job (resume reviews, mock interviews, etc.)

If you’re looking to improve your stock picking or communication skills, consider 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