Would you take the cut and take this opportunity to work as an investment analyst for a respectable equity buyside name?
No.
No way. 10-20% cut maybe. if you’re doing well in sales, stay there.
If you can afford it, I would say yes. You can always go back to sales if it doesn’t work out. Especially if it is real security research. If it is manager selection I would say it isn’t worth it. But if it is equity/credit research, your future earnings potential could actually increase.
Depends on your life situation -
Married with kids & Mortgage? Maybe not…
No kids? Go for it man.
Depends what you’re doing now and how badly you want to get to the buy-side. Also, is the buy-side firm not able to pay you something closer to what you’re getting already? It’s possible they’re low-balling you but it’s also possible that you don’t actually have the relevant skill set to move, and that is what the market is willing to bear. There are too many variables to answer your question in a way that makes any practical sense without getting more info about what the role is and more importantly what you bring to the table. Also, what are you making now (I’m talking about $ and not % as you expressed)?
FYI I know many people that are “interning” or working on a “trial basis” for free at funds just to get their foot in the door. They are usually MBA students or recent grads but it’s still a tough market on the buy-side so who knows.
60%? Hell no.
Thanks for the comment. I m 28 and not married. The role will be doing bottom up equity research. Likely to be earning back where I am now in four years time according to the CIO/manager. Very tempted to move though
Thanks for the all comments. I m 28 and not married. The role will be doing bottom up equity research. Likely to be earning back where I am now in four years time according to the CIO/manager. Very tempted to move though as I think I should enjoy the buyside role more than the current one although I haven’t worked on the buyside before
Dollar terms currently is about USD6k monthly for base ex of bonus
So if you haven’t worked on the buy-side before, then I don’t think the 60% haircut is that scary. Obviously you want to be earning something in-line with what you’re getting now, but how does the employer know whether you’ll be any good at the job? BTW you still haven’t told us what you’re doing now, so to honestly say you should take this job is something nobody can really do without information on what you’ve been doing day to day, what your skills are, etc. There are many different types of equity salespeople, some of whom are really only good at schmoozing clients and developing “business” (not that there’s anything wrong with this at all), yet others that are highly analytical and seem to know their sectors better than even buy-side analysts.
I can see an argument why you could be paid more than what you’re getting. For me, *I* would not take a 60% haircut because before I moved to the buy-side, I already had relevant experience on the sell-side and had some other alternative exit opportunities. So because I have no idea what you’re doing today, how can I really tell you whether you’re getting lowballed versus whether it’s a total blessing that you’ve even been offered a buy-side job?
I’d say take it. Depends how important your style of living is to you and where you live. From what I gather you live in SE Asia, so I most of us can’t relate too well.
If getting to the buy side is your priority, this may be your best chance. On the other hand, if you actually like sales, that can be pretty lucrative too. The world pays its rainmakers well. Also, if the buy side investment side doesn’t work out for you, you can usually get back to sales if you have to, once you’ve demonstrated a good track record in sales, that’s all you really need to get back in to a sales role.
And there may be sales opportunities to switch into on the buy side too. With returns looking muted going forward, asset gathering may end up being more lucrative than alpha generation.
Two questions, can you afford to live on 40% of your previous compensation, and does that 40% figure include total comp, or just base salary?
Either take a 60% paycut or take a hacksaw to the sack.
Choose.
I moved from Sell-side research to Buy-side research with a 45% pay-cut.
This was in mid-2011, I was 30, married with a kid and a large mortgage at that point of time.
Was earning slightly more than what you have quoted above at the Sell-side.
In Indian context that was a decent salary for a 30yr old.
Thanks for your comments everyone. I m turning 29 and no family, no mortgage as well. I think I ll give it a shot.
google boy? Did you ever regret taking the switch?
No I do not regret making the switch … however to be honest there are days when my lower salary level hurts a bit … days when i am planning a discretionary spend
The main reason for the switch was that i was utterly frustrated with my work at the sell-side. It was my 4th year there and i had graduated from being an associate to a lead analyst a year back. However this promotion meant that my job content changed significantly from developing models, writing reports to client servicing … I absolutely hated this change … I was so frustrated that I was literally counting days during the last 2-3months before the switch … and had i not found this opportunity i would have quit my job without having another in a month or two … The worst part of all this was that it was impacting my personal life
Hence the choice for me was not between X and X/2 … rather X/2 and 0 … X being my earlier salary.
I know most these points are not relevant for you … since you have not started a family yet and do not have a mortgage either … but the point i am trying to make is that the reason for my switch was not my Love for buy-side … rather it was my hatred for sell-side that made my take this call … Had i not been frustrated with my sell-side role so much … I wouldnt have take such a drastic step … and I am not saying that the sell-side profile is sh1t … just that i was not comfortable doing it anymore … So please keep im mind my personal circumstances which made my take this step.
When i do a gain/loss analysis of this move i conclude that making the switch was the right thing for me.
We deliberated at home as to what it meant to take such a sharp paycut …
It meant liquidating some other assets to bring down the mortgage level … cutting back on some of the discretionary spends … and no savings for 2 years … We were fine with these … and hence decided to switch
What was on offer
Amazing worklife balance … 9 hour days … 5 days / week … Not a single Saturday in the past 2 years … At the sell-side 2/4 Saturdays a month and even Sundays during Quarterly earnings and major report releases was the norm.
Lots of research and very little servicing … i only have to service the fund managers of my firm at my local and foreign offices … and the best part is that i do not have any revenue / client vote targets
It has also opened up lots of lateral buy-side opportunities … which would not entertain a sell-sider given the different salary levels.
Hope that helps … but again please keep in my personal circumstances before drawing any inferences from my case
Great insights googleboy. Sounds similar to other anecdotes I’ve heard from people that left the sell side at the coverage analyst level. I myself left for the buy side while I was still a senior associate but my life on the sell side was sometimes untenable for similar reasons you mentioned. Glad to hear all is working out for you.
Thanks for the input googleboy.
sell side is a hard life. especially with lower payouts these days. The incentives are not what they used to be
Is anyone able to speak to a jr. equity sales while you’re getting up and running?
I understand that a lot of it potentially is grunt work, which is okay. I’m wondering what the expectations are and when they start monitoring your performance for generating revenue.
Not trying to hijax this thread, just seemed like everyone is much more informd than I am. Thanks in advance.