Have you ever thought of taking up a job as an equity research analyst?
Well, then you are not the only one!
Many recent graduates want to become equity research analysts because it offers them the opportunity to use their critical thinking skills in a dynamic environment.
The job also comes with tons of perks like travel, a good salary, large end of year performance bonuses, flexible spending accounts, discounts at selected entertainment venues like restaurants, museums, etc.
What does the equity research analyst job involve?
The equity analyst job is a good gateway into the financial world.
Equity research analysts are primarily responsible for analyzing and forecasting company performance and financials.
Many analysts are also required to observe, analyze and predict macroeconomic trends for factors like GDP or FDI across several countries.
It is also common for analysts to be responsible for studying assets classes and commodities like currency, gold or coffee.
Equity research analysts then use their research and critical thinking abilities to make recommendations on what assets and stocks investors should be buying, selling or holding.
Equity research analyst jobs can be buy side or sell side. Sell side analysts usually focus on a much smaller number of companies and publish regular reports on their performance.
Sell side analysts might cover only one company or a few companies in one particular sector.
Buy side analysts on the other hand cover a much larger number of companies and don’t publish their research.
They manage client portfolios and are responsible for selecting stocks based on individual client needs as well as its overall suitability to the portfolio.
The end of year performance bonuses that analysts get are usually dependent on how well the stocks the analyst recommended performed as well as on how well his or her particular group or division in the company performed.
What’s the job structure and salary like?
Now that I have told you a little bit about the equity research analyst job profile, let me get to the main part: What does the compensation structure for equity research analysts look like?
Equity research analyst salaries differ across geographies, job roles and companies.
Fresh graduates typically start of in the associate or junior analyst position, depending on their academic credentials.
From there, a good analyst in few years can progress to the senior analyst position.
The senior analyst level positions usually require a minimum of 5 years of work experience and a MBA or finance based degree from a reputed college or the CFA charter.
After the senior analyst position, superior analysts can aim for higher positions like portfolio manager or vice president.
At the higher positions the variable component forms a significant chunk of the salary.
To get a better understanding of these factors, let’s take a look at the salary structure across some of the largest financial districts in the world:
Equity research salary in New York and Chicago
The biggest financial district in the United States is New York City, home to Wall Street.
Most of the current and aspiring equity research analysts someday dream of “working on Wall Street.” New York is the Mecca for many a young analyst since all the financial giants of the world like Credit Suisse, Deutsche Bank, Goldman Sachs have offices in New York.
New York also houses a large number of mid-sized equity research firms as well many small-sized boutique equity research firms.
The salary for the associate level in New York on an average varies from $50,000-$80,000 per annum depending on academic background and prior work experience.
For the analyst position the average salary range is $70,000-$160,000 per annum.
Chicago is another city in the United States that has a booming financial district and an abundance of equity research companies.
It has a similar range of salaries with the average pay for the associate position ranging from $45,000-$80,000 and the analyst level salaries ranging from $70,000-$140,000.
Equity research salary in London
London is not only the capital city of the United Kingdom but also the financial capital of the country and one of the most important cities in Europe.
It offers a wide range of job options to financially able and intellectual curious youngster.
The average salary range for associate position in London GBP 20,000-60,000 and for an analyst with several years of experience the salary can range from GBP 30,000-110,000.
Equity analyst salary in India
Increasingly India is becoming one of the major financial hubs of the world as more and more companies look to invest in emerging markets.
As of January 2013 the total market capitalization of the companies listed on the BSE index was USD 1.32 trillion.
Thus the Indian markets offer an excellent opportunity to equity research analysts.
For the entry level associate positions in India most companies require the MBA Finance degree with the CFA charter providing an immense added advantage.
A student who has cleared the 2nd level of the CFA exam and has an MBA degree from a reputed college can earn anywhere between Rs. 6-8 lakhs per annum.
At the analyst level the average salary range is between Rs.8-12 lakhs per annum.
India being a very popular outsourcing destination also has equity research jobs available in the back offices of large equity research firms, credit rating agencies and investment banks.
While these jobs might not pay as much as a front office one, they provide a good starting point into the higher paying jobs.
The salary range for entry-level equity research analyst back office jobs ranges from Rs. 1.5-3.5 lakhs per annum.
Equity research salary in Singapore
The bustling city of Singapore is often called the “New York of Asia” and rightly so for it offers a large range of finance related jobs and houses local offices of the all of the major financial companies of the world.
For the associate position salaries in Singapore range from USD 35,000-60,000 and for the analyst position USD 50,000-120,000.
Equity research salary in Australia
The big continent down under offers many and exciting job opportunities to equity research analysts.
Many equity research firms like Morningstar, JP Morgan Chase, AMP and Macquarie have offices in Australia.
Equity research analyst jobs are largely concentrated in the financial hubs of Australia like Sydney, Melbourne and Canberra.
The average salary range for the associate position is AUD 40,000-AUD 65,000 and for analysts it is AUD 45,000-160,000 per annum.
I hope this article has answered all your queries about the equity research analyst job profile and salary structure and you are able to fulfill your dream of working in this dynamic and rewarding sector!