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Equity research and investment banking play a vital role in the capital markets by providing clients with analysis and recommendations about stocks, bonds, and other financial instruments. This article will help you decide which of these careers might be right for you.
Although bothwork in the security industry, their responsibilities are fundamentally different and diverse.
Equity research analysts generate research reports, estimates, and recommendations concerning companies to a substantial extent. On the other hand, investment banking analysts advise their clients on how they can generate massive increases in profits by making deals with publicly- owned firms. .
Equity research is a form of financial analysis that involves forecasting and interpreting stock prices, studying market trends, conducting earning estimates, or monitoring important news about companies.
Equity research can be divided into two categories:
The key task of an equity research analyst is to accumulate information about a company, its management, competitors, products, and financials to produce high-quality research reports for use by clients. These are used as a basis for making sound investment decisions.
Investment banking is a specialized division of banking concerned with capital creation, debt underwriting and equity for corporations of all types, assisting with the sale of securities and facilitating mergers and acquisitions, restructurings, and broker trades for both institutions and private investors.
Investment banks assist in large and complex financial transactions. They can suggest how much the company is worth and how best it is to strike a deal if the investment banker's client wants to make an acquisition, merger, or sale.
It may also include issuing securities to raise capital for client groups and preparing documents required for a firm to go public.
Investment banks may employ bankers who can help firms, governments, and other groups plan and manage significant projects and save money and their clients' time by identifying the risks connected with the project before advancing with the client.
When choosing your career path, knowing if you would be more comfortable working in a bank dominated by sales and trading or whether the research side suits you better is essential. Both sides have their benefits.
This guide will explain the significant differences between investment banking and equity research jobs.
Equity Research Analyst | Investment Banking Analyst |
Equity research analysts generally have a backend job | Investment bankers completely stay in the limelight |
Equity research analysts are independent of their clients | Investment bankers work with one client at a time |
To create an unbiased analysis of a stock that highlights its strengths, weaknesses, risks, and opportunities | Provide a rating on stocks they are involved with |
Work on both buy-side and sell-side | Work on the sell-side |
Provides analytical reports of shares, company, and profit-loss | Provides broking and trading, underwriting, mergers, and acquisitions services |
Capital control in an entity that is not publicly traded or listed | Wealth generation for other businesses, governments, and other institutions |
Low-pressure work investment | High-pressure work investment |
Average compensation as per industry standards | Lucrative compensation as per industry standards |
Needs good analytical mindset, decisive thinking, and great research ability | Needs specific financial capabilities, statistical talents, and the ability to work extremely long and arduous hours |
Similarities Between Equity Research and Investment Banking
While the two finance careers have several key differences, some similarities and links exist.
Becoming an equity research analyst is a challenging proposition. Having a financial background and advanced knowledge of market research and the business world, is crucial. To become an analyst, it is important to specialize in finance, mathematics, and analytical reports.
Today, the demand for equity research analysts is increasing in every industry with the growing market. Therefore, their role in the stock market is also increasing. While these professionals study their target companies closely, based on the data, they also get to know about the likes and dislikes of their target customers.
Apart from this, they are also responsible for marketing a product, advertising, sales trends, and finding new possibilities in the market. And, based on all this, they prepare a report. Equity research professionals collaborate with data scientists and marketing professionals to accomplish the task.
Average Equity Analyst Salary in India
The Indian economy has witnessed steady growth in the past few yearsDue to this, the demand for investment bankers has increased a lot.
In today's time, commercial banks are considered to be the most significant job source of investment banking. You get many job options in this sector. You can search for jobs in the capital market or trading firm. Apart from this, there is a demand for investment bankers in various lending companies where you can work as a professional portfolio manager.
Investment bankers are in high demand in international corporations also. An Investment Banking consultancy is also a lucrative job prospect.
Average Investment Banker Salary in India
Roles and Responsibilities in Equity Research
The following are some of the best equity research positions to opt for in your career:
If you have a strong interest in banking, you can pursue a career in this industry. Some of the best job summaries are listed below:
Apart from that, an investment banker has the following job roles:
An equity researcher's previous work experience should be related to equity interpretation. The required skills are:
Skills Required for Investment Banking
The following are crucial skills to have if you want to specialize in investment banking:
Sometimes, what is important is not your understanding of the nature of the business, but how you can present it clearly to a wide variety of audiences.
Equity research analysts and investment bankers provide clients with financial analysis, recommendations, and coaching on their current portfolios. If you are interested in either of these careers, then Hero Vired's Integrated program in Finance and Fintech would be the perfect first stepping stone.
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