RESEARCH
One of the primary products of certain financial services firms is research. Research is can generally divided into "Sell-Side" and "Buy-Side" (see Investment Management section for "Buy-Side" explanation). Research can cover macroeconomics, geographic specific economics, complete sectors or industries, and specific stocks and debt instruments. Firms differentiate themselves on their research coverage and capabilities. The following description is from the point of view of an Equity Research Sell side associate but is also similar for debt research as well. SOM's Investment Management Club is the definitive source for research information and recruiting.
Equity Research Sell Side Associate-An equity research associate supports an analyst that covers a specific industry. The primary role of the associate is to help the analyst deliver information about the industry and the stocks in that industry to the buy side clients. The associate becomes an expert in an industry and is responsible for communicating this industry knowledge to all parties. The associate writes industry reports which help the clients understand the major drivers and trends in the industry. The associate also writes First Calls in response to noteworthy news, earnings or merger announcements. An associate could be responsible for speaking at the morning meeting about news in the industry.
As mentioned, this role has recently changed on the "sell-side." Equity Research focuses on publishing quality research for bank clients, and is no longer involved in supporting investment banking transactions. The business model for this role will likely change in future years.
Some Research Skills:
INVESTMENT MANAGEMENT
In investment management, your sole goal is to select stocks and/or strategies that will outperform the market (or a particular benchmark). MBA students are typically hired as analysts after they graduate. They may be assigned to cover a specific industry, like technology, or they may cover a group of stocks, like small-cap stocks. In both cases, the analyst builds valuation models and learns everything there is to know about the group of stocks he/she covers. To keep abreast of the latest developments in the industry, an analyst speaks with company management, analysts from investment banks, industry consultants, and other people familiar with the particular industry. With this information, the analyst presents investment recommendations to the firm's portfolio managers. Unlike analysts at investment banks (the "sell-side"), "buy-side" analysts share their opinions only with their own portfolio mangers. Over the long term, analysts usually have a choice of either continuing their career as analysts or becoming a portfolio manager. The SOM Investment Management SIG is a great resource for student interested in learning more about this field.
PRIVATE CLIENT SERVICES
PCS involves offering a range of financial services to high net worth individuals. The services can run a broad range; brokerage is relatively standard, and additional services offered by some firms include access to alternative investments (private equity, hedge funds, and real estate), trust and estate advisory, and tax advisory. People who tend to do well in PCS have strong sales skills, are entrepreneurial, and have good market knowledge (or the ability to learn it fast). A high ethical standard and excellent interpersonal communication skills are also important. It is not a good place to build quantitative skills, e.g. valuation or modeling.
The hours tend to be tied to the market in most offices, with a few hours on each end. Client meetings run throughout the day, including breakfast, lunch, cocktails or dinner. Thus, a typical day could be 7:30 am - 6:00 pm if you don't have evening meetings, or until 10:00 pm if you do. As the services offered vary by firm, so does compensation. The first 12 to 24 months almost always involve a salary and bonus plan, with most firms then switching to compensation based on commission plus fees (of the assets under your management). JPMorgan is the exception to this rule; the compensation remains salary plus bonus throughout one's career.
Most firms encourage self-designed teams, which can range in size from two partners to a multi- tiered structure with 20 - 30 people. The functional roles taken by people on these teams are idiosyncratic; some have a fixed- income specialist paired with an equity specialist; others have a tech specialist paired with an old- industry specialist. At least one firm has a regionallyorganized business, with functional experts working together on regional teams.
Things to consider: