How to Break into Equity Research from Commercial Banking?

The fields of commercial banking and equity research are poles apart.

The main agenda of commercial banks is to manage public money deposits such as savings accounts, fixed deposits and checking accounts. The commercial banks issue loans to the public and earn from the interest with which loans are issued. They are governed by federal authorities as is established in all countries.

On the other hand, equity research is about studying currency market positions, stock market performances, inflation rates, industry performance and influencing economic environment factors that impact key financial decisions within a company.

1x1.trans How to Break into Equity Research from Commercial Banking?

As an analyst, you need to have a keen eye to observe biggest industry players and fresh start-ups to prepare financial reports on equity stocks.

The report is generated for various stakeholders for them to inspect, clarify, and understand the facts and principles governing influencing situations. The work profile involves evaluating organisational value and guiding clients towards making profitable business decisions.

In short, equity research is all about studying market dynamics influencing financial decisions. It has nothing remotely related to mainstream commercial banking transactions.

Transitioning from commercial banking to equity research is not easy. Education, industry knowledge and industry experience are going to be major hindrances.

We often receive queries requesting help to switch from commercial banking to equity research. Here are some interesting pointers.

1) Connect with Former Commercial Bankers

The number of people switching from commercial banking to equity research isn’t high; however, you need people to mentor and guide you into this transition. As such, finding former commercial bankers who are now well established into equity research career will undoubtedly help.

How can you locate such people?

  • Look into your current network. There can be seniors who have undergone this switch. Talk to them and ask for guidance. Again, don’t just network for help. Build relationships which will help in long term.
  • Look into the LinkedIn network. If you don’t have a profile there, create one now and start networking with both commercial bankers and equity researchers. Either of the categories must know people who have switched from commercial banking to equity research and with some amount of relationship building and knowledge of your intent, they would be willing to recommend you.

Networking with former commercial bankers help in two ways:

  • They act as a guidance factor.
  • It helps in getting recruited. People who have made this switch are more likely to empathize with your current situation and be willing to give you a chance, which is what is needed right now.
  • You might get recruited in the same organisation as the mentor.
  • You might get recommendations from former commercial bankers for other organisations.

Connecting with former commercial bankers should be your first agenda. Otherwise, starting from scratch and going the traditional hiring process is tough, with low success rate. Most of the time, you’ll have a hard time convincing the recruiter why you want to switch from commercial banking to equity research. The ‘right’ push through the ‘right’ networking process works wonders.

2) Learn Equity Research Thoroughly

Acquiring equity research skills should be your second prime agenda. Go through our in-depth guides published here.

Read through the guides in detail. We mention some other important points here as well.

  • Do MBA in Finance. We understand that MBA isn’t a necessary qualification in commercial banking but you need to do this before thinking of switching to equity research. Join MBA course for professional careers.
  • Enroll for equity research certificate courses. Depending on your location and its equity research professional requirements, a certificate or diploma course helps too. Try clearing CFA levels.
  • Get an internship. Just to be sure you’re ready to take the plunge into equity research from commercial banking, you can join middle-market banks and boutiques and work for 3 or 6 months to gain some experience. Getting an internship may not seem like a good idea if you’re a middle-level professional but think of this as a litmus test. The interning experience will open up recruitment offers. Check out our guide on finding equity research internship opportunities.

3) Cultivate Equity Research Skills

Potential employers look for specific equity research skills and since you’re already into commercial banking, there could be some transferable skills suitable in equity too. Experience is a factor in skill requirement and since you’re already banking professional, requirements for you are going to be higher than what is expected from freshers.

Begin by learning equity concepts and Excel. You need to have keen analytical skills and logical bent of mind to prepare balance sheets, income statements and perform ratio analysis.

Critical thinking capacity is mandatory to assess the strengths and weaknesses of existing problem. Working knowledge of financial modeling and smooth report writing skills work wonders. Report writing skills are important for communication because a major portion of your job responsibility will entail preparation of research reports and other work-related documents.

You need to have independent thinking capability, ability to take decisions, complex problem solving skills.

The field has high learning curve so you need to process and analyse new information fast because you’re responsible for decisions.

You need to gather and assimilate information, and possess inter-personal skills like coordination power, negotiation, social perceptiveness and the ‘right attitude’.

It’s also a skill to remain abreast of industry trends and analyse how they are going to effect the financial situation of a company.

Team building skills are also necessary. You have to work with a team and take independent decisions too.

These are a gist of skills that an equity research employer looks for in a new candidate.

4) Clearing Interview Stage with Clever Strategies

Even before you meet the interviewer, he/she will have assumed three things about you:

  • You weren’t clever enough to break into equity research right after college.
  • You don’t have equity research skills, especially financial modeling skills which, assumedly, aren’t up to the desired level.
  • You don’t have the mindset and attitude of an equity researcher.

These are not personal perceptions but professional perceptions about your capabilities and you’ve to break every single one of them if you want to enter the equity research industry.

Perhaps the interviewers won’t talk about these directly but you need to address them, directly or indirectly. Otherwise, the perceptions will become facts for them. Do you want that? NO.

You have to refute them with evidence.

  • For the first one, you can honestly state that you weren’t aware about equity research industry during college and had no industry knowledge and guidance to pursue it further.
  • For the second one, state what education (degrees and certificates) you acquired to get into equity research. Talk about mock financial modeling tests and if you did an internship, don’t forget to talk about that experience. Also, talk about acquired skills and transferable skills from commercial banking.
  • For the third one, bring in skills again. State that you have read about equity research lifestyles and that you’re ready to invest long hours in it. In fact, commercial bankers spend a lot of time working so it’s surely going to be an advantage.

These are certain situations which you need to anticipate in advance and refute with evidence. Make it a point to focus on skills.

Trying to convince interviewers will be tough because of your unconventional working background. Proving that you can belong in equity research will take time. Be ready for ‘why switch from commercial banking’ question.

Obviously, preference will be given to those who studied and worked towards this field that someone who is switching over but don’t worry, many people have jumped from commercial banking to equity research with élan and you can do too with quick wittedness, clever networking and strategizing.


The decision to break into equity research from commercial banking is a tough one. If you’ve decided, make sure to follow the correct steps – educational, experiential and communication – to land the best of equity research jobs.

Try for middle market banks, boutique firms and finance groups rather than bulge bracket banks in the initial stage. Once you gain few years of experience, you can move towards top market finance groups.

How Much to Rely on Primary/ Secondary Research for Your Equity Research Report?

A lot of you have written to me stating that you have read and appreciated my earlier article – ‘Which is the best way to collect information for your equity research report, wherein I had explained how to go about collecting and collating information for your equity research report.

Many readers said that they tried the methodologies I had suggested in the article quite successfully and were able to collect excellent data for their equity research reports.

But I did get a few mails wherein some readers were still not very sure which is the best type of data collection methodology – secondary research or primary research.

They were not sure how much to rely on secondary research and how much on primary research when they were writing their equity research reports.

I know this is a quandary faced by many analysts when they are gathering information.

In today’s times of limited resources, where analysts are supposed to churn out equity research reports on a regular basis, it becomes extremely important for them to decide when to stop, how much is enough and what to trust.

Believe me these are not easy decisions to make.

This will definitely come to you with more experience as you write more and more equity research reports.

But I thought that I’ll try to use my experience and write another article where I will try my level best to tell you guys how to use the information that you get from secondary as well as primary research techniques.

Which information to trust more and when to stop the process of data collection!

Secondary Research

Secondary research techniques include techniques where you collate information from something that is already out there – something which is previously published in any public platform.

That information could have been printed in the company financial or accounting reports, press releases of companies, websites of various organizations and associations, industry and segment reports, research reports by different associations, tabloid articles, research report by market research firms, and other such published literature.

Though secondary research techniques seem to be quite unassuming, you need to be able to mine the World Wide Web resourcefully and optimally to get the best possible intelligence accessible out there.

Do not be lazy when you are searching the Internet.

Most people do not go beyond page two or page three in a Google search.

But believe me do not stop at that.

Many good and useful articles might not have been SEO (Search Engine Optimization) tagged properly and you might miss out on them if you do not show patience in mining the Internet properly.

The biggest problem with collecting information through secondary research is that the information available could be out-dated or old and hence could result in inaccurate outcomes.

Another thing to consider is that the previous studies that were conducted may not have targeted the same issue that the current research project requires.

So you have to be careful to figure out how dated the data that you find through secondary research is.

Also remember that you need to provide the correct and appropriate sources for all the data that you collect from secondary research to authenticate it.

Also be clear as to which sources you are using for your data collection.

Do not trust anything that you see on the Internet blindly.

Especially beware of propaganda used by various corporate entities.

Do not fall into their trap.

Many times companies will put stuff like “we are the leading company in Europe”, or “We have nearly fifty percent of the market share in Europe” or “we are the number one company in Europe” on their websites.

Do your research properly, find the actual facts and only then publish your findings.

Primary Research

Primary research techniques mean collecting the information directly from the horse’s mouth!

It includes speaking to several key participants in the industry, interrogating them and gathering latest intelligence about the organization as well as the industry.

You do not depend on any other earlier published sources of information.

Primary research can be quite challenging as you need to first identify the correct respondents you would want to interview, then somehow persuade them to dialogue with you and then actually interview them in depth.

This requires a lot of elicitation skills and you need to practice this.

You might have to follow up with these respondents again and again and might also need to offer them incentives to talk to you.

The biggest drawback of primary research is that it cannot be verified or audited.

Many times respondents are ready to share information but anonymously.

They don’t want to be quoted or traced back to the source of the information.

So it becomes very difficult to source your information and validate it.

Also many times respondents can also take you for a ride.

So you need to be very careful as to what information you get and how authentic it is.

Also another important thing is to understand exactly whom to choose as a respondent and what questions to ask him or her.

Do not believe what a single person tells you and always try to verify it by talking to multiple respondents.

That way you can increase your level of confidence when it comes to data collected from primary research.

I always believe that primary research starts where secondary research stops.

They have to be used as complementary research techniques rather than competing or alternate research techniques.

1x1.trans How Much to Rely on Primary/ Secondary Research for Your Equity Research Report?

You should always be prepared with your secondary research, before you start collecting information through primary research techniques.

Primary research should be used to fill in the lacunae that are there in the information that you find through secondary research.

I have created this below simple table where I have clearly tried to depict how secondary research techniques and primary research techniques fare against each other when compared across various parameters.

I am sure you will find it easy to understand and extremely useful while deciding which technique to use for your data collection:

Key difference between secondary research and primary research

1x1.trans How Much to Rely on Primary/ Secondary Research for Your Equity Research Report?

So if you ask me there is no obvious yes-no kind of answer to the question whether primary research is superior or secondary research is superior.

An efficient equity research analyst will quickly identify how to utilize both these types of research methodologies – primary research and secondary research in his data collection and how to synthesize the data collected through them in a systematized manner.


But to end this article I would say that you should always rely more on secondary data which is augmented by information that you can elicit from your primary research techniques.

I hope I have been clear about the importance of primary research and secondary research when you are collating information for your equity research report.

Just to reiterate, you have to use both of them together to get the optimum value for your findings.

They might not be in a position to provide sufficient intelligence to you.

Do let me know if you have any questions regarding this article and as usual I will be more than happy to answer them.

How Different Is It Working as an Equity Research Analyst and an Investment Banking Analyst?

How different is it working as an equity research analyst and an investment banking analyst

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