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Buy Side or Sell Side – Which Career Path is Right for Me?

So you want to be an equity or credit research analyst, do you want to work on the buy side or the side?

Part 1 - The Sell Side described sell side research analysts, Part 2 - The Buy Side described buy side research analysts, and Part 3 will help you determine which path is right for you.

Part 3 – Buy Side or Sell Side?

If you are just starting your career, the entry-level responsibilities are virtually identical: financial modeling and assisting with stock recommendations. Besides, picking a side at the start of your career is probably irrelevant since you can jump to either side down the road.

However, I will note that you typically see sell side analysts jump to the buy side, but you rarely see buy side analysts jump to the sell side. Why? I’ve heard many different reasons from the people I know who’ve made the jump, but I generally think it’s because most analysts want to see their hard work implemented instead of simply selling it off to someone else to use.

There are some other issues to consider if you are looking at the sell side. For example, if you are a sell side analyst at a firm that has an investment bank (think any bulge bracket firm), you will be expected to add input to the bankers on pending IPOs and other capital raising activities. Sarbanes-Oxley strengthened Chinese walls to help avoid potential conflicts, but the potential is still there. Regardless, these activities and the associated compliance issues can be a drain on your time when all you want to do is research and analyze securities.

One benefit of Sarbanes-Oxley was that it lowered the importance of the sell side analyst recommendation at investment banks. This lowered importance has sometimes led to lower pay at many of these firms.

Wait a minute! Lower pay – how is that a benefit??

Well, this forced a number of top-notch sell side analysts to leave the big banks and set up shop on their own. We’ve seen a lot of newly formed, boutique sell side firms start with a sole focus on providing research. This freedom from investment banks has allowed these analysts to improve their research and that has led to some very high quality product.

So, if you decide to include the sell side in your career search, be sure to include these niche focused, boutique firms and not just the bulge bracket names. You might be surprised at how much better life is at a small firm compared to a large firm.

So which path will you choose: buy side or sell side?

{ 13 comments… add one }
  • Tan

    Great site. I have a question:

    I’m doing an MBA right now, I have passed CFA level 3. Which is a better option for trying to go into equity research analyst roles?
    1) Summer internship at boutique private equity firm
    2) Summer internship at Corporate Finance advisory (e.g. KPMG type)
    3) Building up my own portfolio of equity research (so that I can showcase my interest in investing to potential employers, and also be able to pitch a stock well)


    • Option #1 definitely trumps #2. Doing #3 on the side is a helpful addition that you should pursue to demonstrate your investment process and passion, but it is not a substitute for the real world experience in either #1 and #2.

      With CFA Level 3 completed and an MBA, you are in a good position. Good luck.

      • Tan

        Thanks. I don’t seem to have much luck getting an internship though. What advice would you give for someone like me to get into equity research? I have about 7 years of working experience, but not in the finance/investment field. I had actually tried looking for equity research jobs before my MBA (i.e. with my level 3 CFA), without much success.

        One of the options I am considering is to set up my own fund – do you think this is a feasible option? (Assuming I manage to get sufficient funds, maybe a small one to start off)

        • At this point, you just need to really find a way to leverage your school’s alumni base. With an MBA and CFA completed, the credentials are there. At this point it is all about networking.

        • Andreau

          How did you get past CFA Level 3 if you do not have any working experience in the finance/investment field??

  • Gabriel Rez

    Hi! Awesome site!

    I just flunked my CFA Level III Exam (results came out last night). I’m based in the Philippines, and I’ve worked as a corporate finance analyst at a boutique i-bank here (4 years) and want to break into investment management in Hong Kong or Singapore. Do you know anything about those areas? Do I need to wait another year to complete the CFA before I start networking and applying, or can I start now? I’m also turning 30 this week. Am I too old to build a good career in investment management? (I worked 3 years in non-profits and 1 year in a restaurant before my i-banking stint).

    This site is great! Totally appreciate the advise!

    Gabriel Rez

    • First, don’t despair about the CFA exam. The pass rates are so low that everyone has to expect failing at least one of the levels. Sign up for Level 3 again – most people pass the second time around since the material is already familiar.

      Second, you need to start networking and applying for jobs now and not wait until you’ve passed Level 3. By making it to Level 3, you’ve already shown you are serious about the CFA and investing. Start by joining your local CFA scoiety and attend the networking events. You’ll likely meet people with connections in Hong Kong and Singapore.

      Good luck.

  • Mich

    Hi thanks for the very informative site!

    I’m a Masters in Finance graduate (top european target school) with a BB internship experience who is having a lot of obstacles getting a full time job this year in Europe. My primary goal was to get into research on the sell side, but I would obviously prefer the buy side if I get lucky enough- Also, from what I’ve seen this year, the sell side is not necessarily easier to get into this year in Europe since practically noone is hiring.

    I’ve been looking at graduate programs from the likes of Fidelity etc, and want to improve my candidacy. I’m going to the CFA level 1 this summer, and also want to secure a research internship, even if it’s unpaid. What are some ways I can look for boutique ER firms in my city? Should I just try to cold call/cold email them to ask for an unpaid internship? Also, completely unrelated, but would something like a microfinance internship abroad be helpful at all by adding depth to my experiences?

    • What are you doing for networking? I suspect you need to pound the pavement and meet more people in the business. If you are sitting for CFA Level 1, your local CFA society is one place to start.

      For finding more ER firms, pick a few public companies located near you and go to the Investor Relations portion of their website. Companies usually have a list of the analysts covering them, so you might find some ER shops you haven’t heard of before.

  • I would actually rcmmoeend attending a business college. Forget about an unrelated general degree just go straight to a business school and go for a bachelors degree in finance, accounting, or economics. If you can double-major that is even better. After you earn your bachelor’s, you might want to further your education with a master’s or MBA and pursue professional certifications such as the CFA or CPA.Challenge yourself in college. Take difficult classes and try to get involved in business student organizations. Work hard to land an internship and get real business experience. Private equity is a challenging career, but it can pay off enormously to those who succeed.Good luck!References : Was this answer helpful?

  • Sachin


    Really good site !!! very practical and insightful info.

    I have done MBA (Finance and Banking) and have 12 yearss for workex in Accounts and Financial and Banking operations.

    I would like to move to Investment Management domain.

    Would like to know whether courses like Business Analytics (SAS), Financial Modeling (using MS-Excel and VBA) would help me to get a head start.

    Or, courses like CFA, CAIA or FRM are the only entry passes in the investment management domain?

  • AJ


    Great information as always. I’ve been an avid reader for the past 2 months. I am currently in the process of career change. I am working as a healthcare professional in the hospital but starting my MBA in University of Toronto next year. I am looking to take as many finance electives as possible with an eventual goal of landing a buy side ER job. Apart from networking, learning more and more about the trade, what else do you recommend? I am not your traditional 20 year old, I am 32 and moving away from healthcare into ER.

    Thank you

  • Jason

    Thanks for the article. I was hoping that you might be able to lend a hand in clarifying some things. My ultimate goal is to become a trader, where would that fit in to all of this?

    I know certain prop firms handle investments working in collaboration with the buy-side analysts to place trades. But there are also the prop trading firms (not arcades) that are short term minded and use the capital provided by the firm to seek short term gains using a specific system of rules. I would prefer doing the latter, but beggars can’t be choosers.

    I have a dual-degree with 4 majors. I have been trading on my own but so far have an inconsistent P/L. Would it be a good idea for me to go get my MBA? CFA?

    Thanks for your input.

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