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EVOLUTION OF FRONT OFFICE RESEARCH ANALYSTS

Posted on 22/05/2018

While front office jobs are grouped together, it is important to be aware that there is a range of jobs on offer in the front office. Not all these jobs are as glamorous or as exciting as people would like, but in recent months, one job is being seen as a more interesting role.

Equity research is a role that has often been left to people who have a passion for research, analysis and writing reports. This isn’t a dream job for many people, perhaps reminding too many people of school days. There has also been research into the fact that this a tiring job. Many roles of this nature pay well, but people in the role need to work hard to earn money and some would say that their effort is not remunerated properly.

The value of this role could be changing though, and equity researchers are benefitting with more time to focus on their core roles. The introduction of MiFID II at the start of the year has had a hugely positively impact because analysts are now spending much time trying to promote and sell. Heading into the summer of 2018, clients are paying for research and are not looking for the additional features, they only want the core research. This means equity researchers are receiving their pay for less work, which is always something that is of benefit in a role.

MAJOR ORGANISATIONS IN THE US HAVE MADE SUBSTANTIAL CHANGES

In the United States, some of the leading banks have changed their pricing structure for research. Morgan Stanley and J.P. Morgan are two institutions who are charging notable prices for research work and to have a meeting with analysts. Morgan Stanley are charging up to $2,500 per hour for clients to meet with analysts while J.P. Morgan is charging clients $10,000 but this is only for a written research product, there are no meetings included with this price.

Placing these prices into UK context, the hourly rate that Morgan Stanley are charging is the equivalent of £1,850 while the J.P. Morgan charge for written research comes in at £7,400. These are rough calculations based on the exchange rate of Wednesday 16th of May.

It is not only the number of meetings with clients that have fallen, it is also the number of calls with clients. A client doesn’t want to risk receiving a sizable bill for a phone call, all they want is the main body of work.

SOME CHANGES HAVE OCCURRED IN LONDON TOO

This has also been found in London, with various sources in the UK and European banking scene stating that the volume of calls has dropped. Not every company is saying the same and there will be some firms who view this is an opportunity. There is a lot to be said for face-to-face meetings and the extras that come with reports, but not at an inflated price. However, there will always be a company or a professional who is willing to take a hit financially to gain orders, so there will be firms still operating in the same manner.

The evolution of roles in the front office is nothing new, and it is a smart move to stay in touch with the latest developments. At City Wharf Financial Recruitment, we ensure you stay up to date with the latest recruitment news and developments.

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