You know when the job you're doing in financial services is falling out of fashion - people around you start disappearing, you're paid less, the head of your department stops doing deep throaty laughs in your presence and looks at you like you're a huge cost base. But however crappy it gets you're usually paid something if you're in work. Except in equity research.
As an equity researcher, I attended a job interview where they were offering to pay me nothing at all.
The interview wasn't with a major bank. Although banks' research teams are being squeezed by MIFID II, banks still know better than to pay nothing. It's the 'equity research boutiques' you want to watch for.
I interviewed with one of these boutiques. It was founded by a bunch of senior equity researchers from a mid-sized bank who'd been dinged and decided to monetize their research by selling directly to clients. Great idea - except they didn't have the cash flow to cover my salary as a new hire, and so they asked me to work for free.
The idea was that I would do six months for no pay. The rest of them drew salaries for a commission sharing agreement where they got a proportion of the research they sold. They figured it would take me three to six months to get up speed - first I'd have to produce something, then I'd have to sell something, then someone would actually have to pay for that. After six months they assumed I'd be a fully functioning member of the team.
The worst part of this story isn't actually the fact that I was asked to work for nothing though. The worst part is that I accepted, and then they rejected me after having second thoughts about the fact that I wasn't ranked in the top 10 by Extel. They wouldn't even give me a job if I worked for free.
I can't help but feel that this should be a warning to equity researchers everywhere. Ok, I'm not a top ranked equity researcher. But nor am I bad equity researcher. I've made some good calls and if I'm not ranked, that's as much to do with the market and to the difficulty finding a good equity research seat now as anything else. Equity research is the worst job in finance: I could earn more on a building site. The situation is already bad and can only get worse under MiFID II. Personally, I'm trying to leave research behind and make it in Fintech - although that seems to involve a lot of free labour too....
Owen Morgan is the pseudonym of an equity researcher in London.