EQUITY analysts are the lifeblood of investment banking, providing the research that strategists and traders need to buy and sell on behalf of their own bank (proprietary trading) or institutional clients. It’s a demanding and fast-moving job that requires a good grounding in maths, economics and accounting. Expect to earn £30,000-£40,000 with a top employer, plus an annual bonus of up to 50 per cent.

You need to be passionate about business and quick to translate everything from detailed company statements and global economic trends into buy or sell recommendations. And you need to develop a sixth sense, tuning in to and investigating rumoured mergers and acquisitions, which can either ramp up or knock down the share price of the acquiring company, the target, and sometimes both.

Analysts specialise in different types of companies by geographical region, such as Pacific, Latin America, UK and US, or by sector, for example manufacturing, IT or retail. Sector analysts also focus on broad categories of companies defined by size. The descriptions small, mid and large cap refer to market capitalisation the stockmarket value of a company calculated by multiplying the number of shares in issue by their market price.

Top analysts can still earn six-figure salaries but recent regulatory changes have stemmed the flow of cross subsidies from corporate finance, so research has to earn its own crust. The global investment banks still have a floor for analysts who write massive tomes on individual companies, but many of the specialist research firms put their analysts to work on the trading floor. This is a very different environment and requires short snappy responses to the constant flow of news.

“There’s still a relatively strong demand for equity analysts but the job is evolving,” says Sarah Butcher, editor of eFinancialCareers.com. “Until recently most analysts worked in ivory towers and wrote lengthy research reports about particular stocks. Today an increasing number of analysts are situated on the trading floor where they’re expected to come up with ideas on a daily basis. If you get it wrong you’re out, so it’s a lot more pressured than prospective analysts might think.”

Sammons Associates, a search firm in the equity research market, reports a big increase in demand for analysts over the past 12 to 18 months.

“There’s a huge lack of talent and there’s more scope for promotion for those with two or three years’ experience,” says Jonathan Evans, the managing director. “The traditional jobs are still there among the investment banks, but if you’re working on the trading floor you need to be dynamic and ideas-driven.”

So, there are jobs for the academic and the opportunistic alike, but make sure that you choose wisely. “I prefer the more traditional research environment,” says an equity analyst with a specialist UK investment bank. “But in my new job I don’t have time to get out and about and meet company boards I’m tied to my desk responding to a constant stream of news.”

For those working in the sectors most affected by economic cycles, the job has distinct highs and lows. “The hardest thing is when your sector is out of favour,” says an IT analyst. “Even if you’re making all the right calls and having to tell your colleagues and clients to sell, it can be very demoralising. But when your sector’s in favour it’s fantastic.” Debbie Harrison is a senior visiting Fellow at Cass Business School.

Read previous articles in the series at www.cass.city.ac.uk/thetimes . For a guide to salaries go to www.michaelpage.co.uk and www.robertwalters.com For insight into a day in the life of the analyst go to www.vault.com .

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