So you want to work in institutional equity sales? Really? Rarely has a job been more roundly proclaimed a thing of the past. Rarely have more senior people trickled out onto the market and been unable to find new employment. - But this doesn't mean you should give up on institutional equities sales altogether.
Equity sales “is dying – it has been dying for some time – but it’s not dead,” said one director at a boutique New York research firm. He says there are a number of reasons that the job has gotten more difficult, but money is still there to be made and the job comes with some unique perks. Before you throw it all in and become a barman, this is what you need to know.
Pro: It’s a ‘warm’ sales job
The worst part of a sales job is cold-calling: picking up the phone upwards of 50 times a day with the hope of one person agreeing to a face-to-face meeting, with the other 49 essentially hanging up on you.
In equity sales, most firms bring junior people along much more slowly, letting them watch and learn while taking part in some of the less nuanced aspects of the job: setting up lunches, distributing reports etc. Junior salespeople are then eventually given current clients to work with while they slowly try to expand their business. This differs from most any other sales role including others in financial services, like wealth management, where you have to eat what you kill.
Pro: Visibility and exit opportunities
Working in equity sales gives you visibility over the entire cycle of financial services, the same director said. You’ll work with banks, hedge funds, larger asset managers and people at every level of the business.
After a few years, plenty of exit opportunities become available if you want them. You’ll develop a near-limitless number of contacts within the industry. Many institutional equity salespeople end up working at one of their former clients, he said. It’s also a sales position that’s looked upon with a certain level of gravitas, opening up opportunities in other industries. A junior person at his firm recently left to work at a cloud computing startup, for example.
However, once you reach a certain level, leaving the job can be tough, even if you stay within the industry. If you’ve made it to a senior position, you’ll be making well into six-figures, will have a book of consistent business and would need to work much harder for significantly less money for at least a year.
Pro: You don’t need the perfect resume
“As an English major, the work gave me a crash course on how financial markets operate on a transactional level,” a more junior New Yorker said. Being a sales job, equity research allowed him into a field where his background may not otherwise have allowed. He obtained his MBA before landing the job but said that only three of the 15 people in his group went to business school. A CFA is a good substitute, he said.
Pro: Working hours
Compared to other jobs on Wall Street, the hours aren’t too bad. Like traders, people who work in equity research sales tend to work around the hours of the market. You’re up early, but you’ll make the 5pm train from time to time. Weekend work is rather unusual and, once you reach a senior level, you can usually make your travel plans fit around your own schedule.
Of course, there are also downsides to working in equity sales. Key among them is the second iteration of the Markets in Financial Instruments Directive (MiFID), which requires a new level of transparency around what clients are being charged. Clients are even now fearful that of being charged for taking a phone call from a salesperson, a London staffer told us.
Though the regulations aren’t applied in the U.S., similar pain points are being felt. Another New York salesperson said MiFID II has changed expectations globally with most clients no longer just paying generic invoices.
Sales can also be humbling. “At times you are nothing more than a concierge,” the director said. “Oh, you need everything to be gluten-free? Not a problem!” he said sarcastically looking back at a recent dinner.
“I’m nearly 40. Being talked down to be a 26-year-old nerd takes patience,” he added.
There's also the problem that while equity sales people are selling trade ideas based on research, there's plenty of research out there now that's free. “At the end of the day, you are only as good as what you’re selling,” the director said.
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