How much am I worth? Buyside credit analyst, leading international house

A panel of specialist headhunters give their assessment of typical London pay packages: Senior buyside credit analyst, leading international house - salary 75,000-100,000; bonus - 60%-100%.

The classic question often asked of professionals - would you rather work long hours and earn more, or put in fewer and more regular hours, earn less but actually have a life - used to perfectly sum up the difference between sellside and buyside credit analysts.

The sellside employee earned big bucks and worked investment bank hours specialising in a sector or a limited range of companies, often becoming a stranger to the family at home.

He/she was answerable to numerous bosses including trading and origination, buyside fund managers and external clients. Probably as a result there was little job security.

By contrast, buyside analysts have traditionally looked at a wider range of sectors/companies and have had but one boss, the fund manager. Earning less than their sellside counterparts they can nonetheless reasonably expect to be home for the Channel 4 News at 7pm.

This clear distinction between the roles is now breaking down, in some ways at least, and sellside analysts are nowadays more willing than before to move to the buyside.

The reasons include job security at investment banks becoming rarer than ever, together with a slump in sellside bonuses. In the last few months there have been a number of high profile defections from the sellside to the buyside.

They include a move by Elissa Johnson, a high-grade credit analyst at Merrill Lynch, to the fixed income specialist Pimco.

"The bonus portion of sellside analysts' remuneration has been steadily decreasing, with 2002 a particularly poor year, yet we have not seen a huge change in pay for buyside analysts," notes James Richardson of Napier Scott.

There are other reasons why analysts are moving to the buyside, however. "Buyside analysts are able to form a more independent opinion and do not have to write reams of research that quite often does not get read," says Emily Gummer of Alexander Mann Global Markets, adding that the recent scandals over the integrity of sellside research is encouraging some staff to look for a new employer.

Some sellside analysts still experience difficulties in expressing an unbiased view, while compliance regulations are getting tighter.

Gummer says some buyside salaries are moving higher towards sellside rates, with organisations prepared to pay what it takes to attract high calibre individuals.

Base salaries are now pretty close, with directors pulling in somewhere between 75,000 and 100,000, although buyside bonuses still tend to be lower than sellside ones (at between 60%-100% of base, with most firms currently paying out at the lower

end of this scale).

So what do you need to become a buyside analyst - apart from a desire not to have work take over your life?

Ironically a good background in sellside research is an excellent foundation, though many cost-conscious organisations prefer to recruit from rating agencies, where salaries tend to be much lower.

You will also have to be prepared for more direct scrutiny than on the sellside. "The analyst's role on the buyside is more transparent, and the performance can often be more directly measured...there is a certain amount of accountability that an analyst might not have had to contend with on the sellside," says Napier Scott's Richardson.

For those wanting a better lifestyle and more job security - not to mention a narrowing salary gap with sellside analysts - it doesn't sound too onerous a change.

Figures and commentary by Napier Scott Group and Alexander Mann Global Markets.