Equity research is very hot. But before getting overexcited and grabbing at any old equity research role going, it is advisable to do some research on it.
Some of this can be done in advance. And some can be done through the use of cleverly targeted questions during an interview.
According to one reader of eFinancialCareers, there are two questions that are mandatory during an equity research interview.
1) How long will it take before I cover my own stocks?
2) Will I be allowed to cover peripheral stocks in the sector that I join within a year?
However equity research headhunters suggest these may be insufficient. Jonathan Evans, chairman of Sammons Associates says equity research candidates may want to ask a few supplementary questions. For those of you thinking of attending an equity research interview soon, he recommends:
3) Who's the head of the team? What's their background?
4) What type of research is required? Is it fundamental, top down etc?
5) What length do you expect research reports to be? And how frequently are they produced?
6) What's your sales force like? How many generalist and specialist sales people do you have? [Specialist salespeople are considered preferable.]
7) Are you P&L or ranking driven? [P&L is best for the firm (and your bonus), but ranking is best for your career and will make it easier to transfer elsewhere.]
8) Are you driven by internal rankings or client rankings? [Internal ranking is good for pay. External ranking helps the firm get corporate business and will increase your fungibility.]
9) To what extent will I be expected to attend road shows? [Ideally you probably do not want to attend many, as they will involve travelling and staying in corporate hotels. However, this may not apply if you are a recent joiner and want to 'see the world'.]