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Help! Should I work on the buyside? Should I work on the sellside?

“I have been working on the buyside for three years as an analyst and am looking at potentially moving to the sell side. I’m an equity researcher and moving to the sellside would probably mean joining at the associate level. On the other hand, if I stay on the buyside I’ll probably be able to move into a junior portfolio manager role. How do salaries, hours and career progression compare?”


A senior sellside analyst says:

“The perception is, that the buyside offers easier hours and less money. This will almost certainly be the case if you’re working for a long only institution like Fidelity. Lifestyle aside, the buyside might be more appropriate if you’re interested in covering multiple sectors and multiple countries. By comparison, if you want to get ahead in the sellside, you’ll need to keep specialising more and more the further up you go.”


Another sellside analyst says:

“If you work on the buyside, you’re obviously responsible performance, which can be quite an onerous responsibility. If you work for a long only firm you will also not be paid very well. Arguably, the job can be more intellectually rewarding on the buyside, but I don’t think intellectual curiosity has ever been a motivation for working in the financial services industry.”


Jonathan Evans, chairman of search firm Sammons Associates says:

“It all depends what you want to achieve. Working as an analyst on the sellside is both very similar and very different to working as an analyst on the buyside. On the buyside you will generally cover more than one sector. Rather than creating in depth stock specific coverage you will often find yourself writing something more akin to a thematic or strategic market overview for internal use.

On the sellside, the rates of pay can be substantially higher. However, job security is considerably lower and you will be expected to travel a lot more frequently for both client and company visits. The buyside analyst can be seen as a less high profile role than the sellside equivalent due to the requirement to capture client votes on the sellside; but it generally involves less stress, less travel, and shorter hours.”


Samantha Donald, head of asset and wealth management search at Shepherd Little, says:

“We don’t see a huge amount of movement between the buyside and the sellside. This is because the salaries are now so different. On the sellside, an analyst with 3-4 years’ experience can earn a salary of up to 150k. On the buyside it’s more like 75-85k.

Equally, it’s worth bearing in mind that on the buyside everyone wants the CFA, but the qualification is less common on the sellside.

When people do move from the sellside to the buyside, it’s because they want to get closer to the decision making process. If you’re working with a portfolio manager, you will have the satisfaction of actually influencing the investment decision.”


Alex Williams, managing director at search firm Pelham International, says:

“If you’re working as an equity analyst on the sellside, it’s as much about the quality of your research as your ability to market that research to external clients. It’s a very different role. On the sellside you can expect to spend a lot of time travelling, meeting clients (often buyside analysts) and presenting your ideas.”

Comments (6)

Comments
  1. What advice would you give someone looking to switch from buy to sell side. 3-4 years of experience, solid academic background (two Masters degrees from top schools),VBA, solid financial modelling skills….is there a point in doing CFA? Having in mind that there is still a lot of unemployed sell side analyst around, what is the best strategy to get noticed?

  2. Is sell-side really paid that much higher than buy-side? The salaries mentioned in this article seem to be miles apart…

  3. There are so many different factors from firm to firm its impossible to generalise and the result is a misleading article.

    You dont even differentiate between a sell-side desk analyst and a sell-side publishing analyst.

    A sell-side publishing analyst is unlikely to earn materially more than a buy-side equity analyst.

  4. As a former sell-side analyst who has made the switch to the buy-side, I think that one of the key points is whether the “buy-side” one refers to is a traditional long-only shop (Fidelity, Capital, JPM Asset Managemt) or a leading hedge fund (GLG, Brevan Howard or Lansdowne Partners).

    In the former case, as a sell-sider moving across you will most likely have to take a significant paycut. However, the upshot will be the better hours, less stress and the pleasure of having sell-siders sucking up to you and offering management access and various entertainment. If you work hard in your job, learns the sectors well and, aided by luck, generate a good track record you should be eventually presented with opportunities to join a hedge fund (if that is your ultimate goal).

    In the latter scenario, where a sell-sider goes straight to a decent hedge fund, he could end up making a lot more money almost immediately (provided markets and fund performance are good) but the job itself would be a lot more stressful as your performance will be constantly measured and you may end up on the street after a bad spell with few others willing to hire you.

  5. how much total comp can a buyside long only analyst earn?

  6. Stadns back from the keyboard in amazement! Thanks!

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