US
Pay at ratings agencies isn’t great compared to banks, but they’re supposed to offer a better lifestyle. That’s only partly true.
That ratings agencies pay less than banks does seem to be the case. While banks are well known for dishing out bonuses that equate to salaries for structured credit analysts and the like, bonuses at ratings agencies rarely hit more than 50%.
In fact, London-based recruiters say an intermediate-level credit analyst at a ratings agency can expect to earn between 60k and 65k with typically a 20% bonus.
So why would anyone work for a ratings agency? It’s all down to training and variety of work, according to Standard & Poor’s (S&P). “We provide more rigorous training than they will get anywhere else…,” says Martin Winn, S&P’s director of communications. “Employees will get a much broader experience than at an investment bank.”
Rumour has it that ratings agencies are also more chummy places to work than investment banks. But one credit analyst who’s done both says this isn’t entirely true: “They get you there with claims that you’ll work less hard, but after a few months you realise this is rubbish, and you might as well be paid more working for a bank.”
However, Adam Seward, head of recruitment at Fitch Ratings, says it’s all wrong to think that working for a ratings agency means working less hard. “We try to focus on providing challenging roles and the opportunity to develop… It’s more about that than work/life balance,” he says.
Ratings offer great experience and an opportunity to move into a better bank, but should be seen as a temporary path. Stay too long and you are tainted with being not ‘deal focussed’ and as no good for IB.
The experience will buff up a tarnished CV, especially those with no UK experience or those with academic but little practical experince, just don’t kid yourself you can walk into any banking role after – a large product knowledge gap awaits.
Lastly beware the great base salaries at ratings at mid-snr level mask bad bonuses and lack of opportunity for career progression.
An Investment Bank will never match a Ratings VP on a 85-100k basic if they have no trasaction or products skills, no matter how good you are!
What positions are typically filled by a (former) rating analyst when he joins a bank ?
Equity or fixed-income analyst ? Corporate banking analyst ? Thanks for your answer.
Work is work, Investment banks pay more and offer better training. Period.
What kind of pay one might expect at the entry level at a rating agency?
Does anyone know how a role as a CDO analyst at a rating agency would evolve in terms of offering banking opportunities in the future?
1-2 years analysts who rate CDOs and want to work at a bank are generally hired by structuring desks at junior level. This is because of relevant experience in the rating aspect of the structuring process. Also, analysts usually cover several banks so they gain new product knowledge and see different structuring strategies which may be valuable. On the flip-side, RAs have no exposure to the commercial side of CDOs ie origination and marketing. A typical analyst only understand their agency methodology with very little grasp of their competitors’ approach.
I work at Fitch 30 k euros to start as analyst.
RA’s strength lies in the exposure that an analyst will get, especially at junior levels. At the same time, RAs usually have a good/friendly working environment where you have time to really think/analyse and learn. Basic pay varies amongst RAs and dept – 26K to 38K for entry-level positions. Former rating analysts can occupy various positions in banks, some become equity analysts, others/more often occupy a fixed-income/debt related job either in the market or investment banking side.
Answered like a typical investment banking idiot who believes is god until reality hits with lay offs. Let’s talk in two months and see if yous till have errmmm…work.
Ratings agencies can actually match investment banks on bonuses. I have worked with candidates who have received anything up to 500,000 on bonus day. One in particular had been with S&P for three years and was awarded a bonus of 400,000 on top of a 2m base salary.
Any 1knows the recruitment agencies which recruit for rating companies like S&P, Fitch and Moody’s?????????/