buddha Wrote:
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> ^
> One thing the I notice people mention alot less is
> that, yes, the Sell Side research field is tough
> money right now, but what do you expect?
>
> All these firms who are axing their MDs and
> promoting no names to lead analyst
> *cough*MS*cough* can’t really expect to be paid as
> well, right?
there were a number of other banks besides MS that have done the same thing. it made a lot of sense for MS as it was a way for them to purge the huge salaries that were being paid out to managing directors, but for the junior guys, it also gave them an opportunity to move up and take their own coverage. layoffs are never pleasant, but they created a lot of opportunity for junior personnel to become coverage analysts and in that regard, i really don’t think too many of the junior folks would disparage MS’s move in this direction. again, everything is economically driven and if you can get a younger senior analyst to work harder for less pay, why not?
luke77 Wrote:
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> Numi, I’m curious as to what you think will happen
> in ER if we enter a serious, extended downturn as
> I believe we will. I get the feeling at my bank
> that job cuts across the industry will continue,
> the banks will shrink, and outsized bonuses that
> have been the norm for the past few years are
> going away. However, it seems that the demand for
> ER would be fairly consistent regardless of
> economic conditions. Do you see the industry
> shrinking (at a more rapid pace than it already
> is) if we enter a serious downturn?
it’s tough to say. i don’t think sell-side research will disappear completely anytime in the foreseeable future – they’re an essential part of the vetting process when it comes to potential banking transactions, and i’d argue that another one of their most important purposes is to provide buy-siders with access to senior management. as it is, i think ER at your bank is getting to be pretty leanly staffed, but there’ll continue to be a push at your bank as well as others to trim out the sectors that don’t generate a whole lot of trade volumes.
let’s put it this way – equity research is going to be one of those areas on the sell-side where the future really isn’t all that certain, but i wouldn’t say that the futures of other things like institutional sales or equity trading are any more certain as trading automation becomes more common and buy-siders continue spending time building up their in-house networking and expertise. so personally, i find any aspirations of building a career on the sell-side as a coverage analyst, while still potentially lucrative, will still have to face the whims and volatility of the industry as a whole. that being said, i still contend that the skills that you develop as a junior equity research professional are very useful and versatile, so while i would advise someone to think long and hard before making a mental commitment to becoming a senior analyst on the sell-side, i still think the associate role is a very good financial training ground.
what is your take on this? what have others at your bank been saying?
.