First of all, what does equity research entail? The main function of the equity research division is to conduct detailed financial analysis and research on a specific investment and make important recommendations to the investors. These recommendations are based on whether the fair value of each particular investment is greater than or smaller than the current market price, allowing the researcher to make a decision as to whether the investment is undervalued or undervalued. The division plays an important role to the rest of the firm in providing the necessary information of an investment between its buyers and sellers, ultimately attempting to help generate maximum profits for the buyers. Companies such as Macquarie, UBS, JP Morgan, Credit Suisse, Goldman Sachs and many others offer careers in the equity research field. So now you are aware of the background details, what are the pathways available to breaking in?
The first pathway is directly after graduating University with a Bachelors degree in a related field such as economics, finance, accounting, engineering, science, mathematics, etc. Keep in mind, the equity research job market is highly competitive with only limited spots available. This means that candidates who are selected for an interview will need to be well equipped, particularly with some very impressive technical knowledge and skills to increase chances of standing out in the crowd.
If you were unable to make it in the first time around, or you happen to desire a career change into the equity research field later, there’s a few ways to try and get in. The first is a qualification that is now very common amongst equity research employees, being a Master of Business Administration (MBA) or a Chartered Financial Analyst (CFA) certification. An MBA is a common method for individuals that desire a career change or an increased skillset as it provides a stronger foundation of knowledge and experience than a Bachelors degree. The CFA can be used as a tool to significantly enhance your understanding of investment analysis and is valuable to employers as it shows your discipline and commitment to the equity research field. A more practical method is to accept a competitive graduate position in a similar field within finance, economics or accounting, and potentially others. This will allow you to build some practical skills and knowledge within a similar environment. Equity research divisions will find this experience valuable if you can prove the skills you have developed are transferrable, and you are committed to the type of work that is entailed.
It must be kept in mind that the ratio of job availability to applicants in the equity research field is very small, and its competitive nature means candidates need to do all it takes to stand out from the crowd. However, if you are genuinely interested in the career path and believe you have the self-motivation to succeed, this may be a great option for you to explore.