Equity research associates (associate is the entry level position within the research department of an investment bank) work closely with the analyst, whose job is to make investment recommendations on stocks in a specific sector. Responsibilities include building and maintaining proprietary financial models and comparable company spreadsheets, researching industries and companies, identifying sources of information, and communicating analysis and investment recommendations to clients in research notes and reports. The desired background for a research associate will vary depending on the needs of the research analyst. Regardless of whether an associate is hired straight out of university or laterally with several years of work experience in the industry, he or she must have the ability to process a large amount of data, identify what is relevant, formulate an informed opinion, and communicate it effectively in written and oral format to the analyst.
MUST DO
Engage in writing intensive coursework
In this job, your writing, style, grammar, spelling, and wordsmithing skills are crucial. You will be most marketable if you have engaged in some intensive writing work while at your undergraduate institution. Make sure you have at least 2 stories to share about meaningful writing you have done.
- Possible coursework includes: writing seminars or junior colloquiums.
- Volunteer to help a professor who conducts lab research and write up a report.
- If your school has the option, elect to complete a senior thesis. Choose a topic that you are thoroughly interested in as this will be a year-long time commitment. Likewise, choose an advisor who will be willing to spend time with and with whom you are compatible.
Take a research-intensive course or sign up for a research project
Are you resourceful in finding the information you need? In most work environments you will not be told explicitly where to go to get the information you need. Initiative, resourcefulness, and an ability to synthesize research are important traits employers are looking for in their hires.
Make sure you have at least 2 stories to share about meaningful research you conducted, how you identified the appropriate sources, and the conclusions you reached.
- Volunteer to help a professor who teaches a marketing, finance, or other business course.
- Volunteer to do some market research or competitor analysis for a local business.
- Take courses that require research projects.
Seek finance related work that will require the development and analysis of corporate financial forecasts and statements
The income statement, balance sheet, and cash flow statements are the primary components or financial underpinnings of any company. You should be able to look at these financial statements and with some calculations, draw accurate conclusions about the operations of a company, identify inconsistencies, problems and opportunities. This analysis also includes calculating basic ratios such as return on equity, return on assets, days receivable, etc. Production of a financial forecasting model that projects a company’s income statement, balance sheet and cash flows 3-10 years is quite important. Producing a model that integrates all three financial statements into each other and is driven by a set of changeable assumptions will give you an incredible understanding of each line item on a financial statement.
Take a course to build understanding of key business calculations
Financial ratios and other calculated metrics offer valuable snapshots of the health of an organization and business trends. Everyone from managers to investors and lenders looks at company ratios. The more senior you are in an organization, the more your compensation will likely be tied to your ability to positively impact these ratios within your company.
Any number of books or websites can offer you the simple formulas to calculate common ratios, but understanding what these ratios means starts with an entry-level course covering financial statements. Courses that might be good starting points might have titles similar to the following:
- Financial Statement Analysis.
- Financial Modeling.
- Marketing course requiring building demand models.
- Introduction to Financial Accounting.
- Introductory Accounting.
Take an additional corporate finance course such as investment management, valuation techniques, financial management or real estate financing
If you have already taken an introductory corporate finance course, you should seriously consider advancing your knowledge. Although not a requirement, the more knowledge you have, the more comfortable you will be in the interview process. The ability to be highly conversant in finance will improve your prospects tremendously.
SHOULD DO
Join toastmasters or the debate team to build and exercise your powers of persuasion
You will need to interact with other functional areas that don’t report to you or your boss, so persuasive abilities are key to achieving product goals. If you aren’t a natural salesperson, don’t worry. There is actually a lot of “science” to persuasion, and these techniques can be learned. The key is to put them into practice after you learn them. You’ll be surprised how much can be negotiated.
Take a course or workshop on public speaking to build your powers of persuasion and presentation skills
You will need to interact with other functional areas that don’t report to you or your boss, so persuasive abilities are key to achieving product goals. If you aren’t a natural salesperson, don’t worry. There is actually a lot of “science” to persuasion, and these techniques can be learned. The key is to put them into practice after you learn them. You’ll be surprised how much can be negotiated.
Check with career services to identify an individual or group locally that does strategic planning and offer to work for free
This will give you practical experience performing quantitative and qualitative analysis of data to address businss problems. Both quantitative (e.g. estimating market size, profitability) and qualitative factors (e.g. competition, customer tastes) must be weighed to determine the best approach to achieving an organization’s long-term goals. In this job, you must be adept at identifying key variables and translating them into models and other forms of analysis to inform decision-making.
Ask professors you have if they are working on any projects you can help with requring collecting and analyzing data, particularly if it is around a business issue
This will give you practical experience performing quantitative and qualitative analysis of data to address businss problems. Both quantitative (e.g. estimating market size, profitability) and qualitative factors (e.g. competition, customer tastes) must be weighed to determine the best approach to achieving an organization’s long-term goals. In this job, you must be adept at identifying key variables and translating them into models and other forms of analysis to inform decision-making.
Get a summer experience doing strategy consulting, equity research or strategic planning
This will give you practical experience performing quantitative and qualitative analysis of data to address businss problems. Both quantitative (e.g. estimating market size, profitability) and qualitative factors (e.g. competition, customer tastes) must be weighed to determine the best approach to achieving an organization’s long-term goals. In this job, you must be adept at identifying key variables and translating them into models and other forms of analysis to inform decision-making.
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