Q&A: Head of Global Securities Research and Economics, Merrill Lynch

A Q&A with Candace Browning, senior vice president and the Head of Global Securities Research and Economics for Merrill Lynch. She discusses opportunities in research, the kind of background she seeks in analysts, and the role researchers play with firms and clients.

Candace Browning's group provides Merrill Lynch and its clients with investment insights and ideas, industry and company overviews and asset allocation recommendations. Until February 2003, she served as director of Equity Research for the Americas region, with responsibility for research coverage in Canada, the U.S. and Latin America.

How would you describe your role?

I am responsible for making sure that Merrill Lynch's Global Research group develops and provide the best investment insights for clients. To do that, we focus on obtaining the most talented analysts - recruiting, retaining and developing them. We have to do that in order to come up with investment ideas and solutions for our clients.

What's a typical day like for a senior equity research analyst in your group?

First, our senior equity analysts are much more focused on client interaction than the juniors. I'd say a senior analyst spends about 40 - 60 percent of their day on client interaction. Junior analysts would spend the majority of their time - say, 80 to 90 percent - analyzing data and supporting senior analysts with the basic preparation of fundamental reports.

In general, a senior research analyst's typical day would involve formulating and writing investment ideas, interacting and speaking to company officials, and conducting primary research. This would include talking to independent industry contacts, such as regulators, consultants and other professionals.

Analysts also speak to internal clients, like our traders and salespeople, as well as institutional clients. Also, they may organize conferences for investor clients, and visit clients with company management. They depend on gathering information and distilling it into investment insights, which is widely distributed to clients.

This is a fun job, one that is highly entrepreneurial. You're not sitting at a desk. You interact with people in your industry and have contact with companies. It's an active and stimulating career.

What are the core skills you look for in a research analyst?

We aren't looking for a specific profile. If you look at our senior analysts in the U.S., they possess a broad set of backgrounds and training. These include areas such as history, marketing and astrophysics. The one thing they all have in common, whether they focus on investment strategy or fixed income, is a strong level of intellectual curiosity.

In research, we look for people who will ask the next question, as if they were investigative reporters. It's also critical to have appropriate financial and mathematical training, which is necessary to analyze the asset class they cover. These skills are important, however we will teach them on the job. We'll hire someone with a bachelor's degree and train them, and we will also hire Ph.D.s. They just have to have an interest and aptitude for research.

To recruit, we're building a stronger campus program and developing relationships with various universities and colleges. We also utilize a variety of industry organizations to assist us with our recruiting efforts and maintain a strong employee referral program.

What type of professional is successful in research?

In putting together a roster, we look for diversity - well rounded people with diverse experiences, educations, thoughts and backgrounds. We want a team that will put forth the best business results, particularly because the opportunities in terms of investments are in non-traditional areas, such as emerging markets.

We've been successful in hiring diverse people. We've put people in different parts of the world. For example, we've had people with Mandarin language skills develop here in the United States, and then moved them into growing regions such as China.

We also want to be able to retain people. So, we're cognizant of allowing people to maintain a work-life balance.

What are some of the areas of growth you expect?

In 2007, we're hiring research analysts in every region in the world. We're doing more hiring in Europe, the developing markets and the Pacific Rim than in the U.S. We are also doing more hiring in fixed income research.

We're looking for people in structured finance in Latin America, Asia and Europe. We're also looking to further build out our derivatives teams (in credit, equity and rates) around the world, and our commodities franchise. We're also seeking country analysts for the Middle East, South Africa and Turkey. In the Pacific Rim, we're looking for research analysts who can cover small caps, primarily in countries such as Japan, India and South Korea. We're also looking for a closed-end analyst for the U.S.

Which qualities do you think work best for research jobs?

We look for presentation skills. It's important that our research analysts be able to communicate and interact well with an array of people such as our client base and our own business partners, such as sales and trading. So, human interaction skills are critical.

Also, it's important to have sound judgment. In any job, particularly research, we deal with conflicts. The ability to deal with them in a mature, balanced and non-emotional fashion is critical.

Finally, to be successful in research you need to be hungry. You need to focus on working hard and developing great ideas, and have a strong desire to be recognized for making a contribution. The best research analysts are entrepreneurial. They can look at something - for example, an industry that may be experiencing problems - yet because of their entrepreneurial skills, they're able to figure out a way to help clients.