Measuring the suits

An
analyst’s job can be a tense one, but the adrenalin rush of predicting a
leading trend and the high salary outweighs the pressure. Nic Paton reports.

Long
hours and high pressure make investment analysis by and large a young person’s
game, with the majority of front-line analysts aged in their mid-30s.

By
the time they hit their 40s, they have either become senior analysts, moved
into investment relations, corporate equity consulting or even public
relations.

"By
your 50s, you are either a complete guru or else you are deemed to be crap
because you are still there," argues Jim Wood-Smith, head of research at
stockbroker Gerrard. Standard contracts tend to last for three years.

And
there tends to be a direct correlation between stress levels and the amount you
earn, he argues. "If you go for the megabank end of the scale, you can
expect to have a pretty crappy life."

Rewards

Having
said that, the rewards can be huge, too. A typical package for a 28-year-old
analyst with three years’ experience is around £105,000 with a £100,000
guaranteed bonus. Senior analysts can be raking in £500,000 and the top tier
will be into the millions.

Then
there is the adrenalin rush of your hunch being proved right, of leading the
direction of the market that day, seeing your name splashed across the next
day’s papers and, critically, knowing you’ve made a packet for your clients.

Analysts
also tend to be high-flyers who relish at least some degree of pressure and
thrive off the 13-hour days. This means the idea that investment banks churn
through their research staff, leaving them burnt out through over-work after a
few years, is wholly false, asserts Alexander Campbell, head of HR for
investment bank UBS Warburg in London.

In
fact, investment banks recognise that equity research departments are a vital
cog in their continuing success and that maintaining and developing the talent
within them is crucial.

UBS,
for instance, has run a project with the London Business School looked at issues
such as its physical working environment, levels of stress and pressure, team
organisation and issues such as knowledge management.

Among
its findings, UBS found the firm was not being as innovative as it could have
been on issues such as work flexibility and remote working. "If we offered
those sort of arrangements more frequently, it would help us retain people
more, particularly women," says Campbell.

Academy
aims

The
company is considering introducing an internal "academy" in the next
year to establish competence levels for its analysts.

It
also, like many City institutions, has a private medical centre, which can make
referrals to GPs or counselling services if considered necessary.

And
it offers a corporate concierge service to reduce day-to-day pressures such as
getting the dry cleaning done or the washing machine serviced.

"It
is very, very stressful, but very exciting. People who go into those analyst
jobs understand that. The average age of retirement from some places is 45. It
is not just burnout, it is about wanting to bring younger people along,"
adds Lynda Gratton, professor of organisational behaviour at LBS.

A
senior analyst will spend half his time on ideas, half on dealing with clients
and half talking to banks and corporations, jokes Tim Huddart, director of
research EMEA, for merchant bank Merrill Lynch. "Everyone wants to have a
piece of you, and then the media want to talk to you too. Suddenly you have
three jobs."

Despite
this, he believes there is not that much burnout. At Merrill Lynch, more and
more people are taking up flexi-working and some working from home.

"Most
of our analysts are equipped with laptops linked to the network which they can
use from home. They often have to spend weekends away so we do not worry about
them spending time at home if, for instance, they have been away for a
weekend," he says.

Management
training

The
company also runs management training courses for when analysts are moving into
less front-line positions. "They often come back charged up and refreshed,"
he says.

Unless
they are in a particularly skilled sector, such as biotechs, analysts are
rotated on a regular basis to expose them to different firms, skills and
outlooks. It also helps to keep them from getting stale. There is a mentoring
system aimed to bring on and develop the younger analysts.

When
things are going well, and you are being feted by clients and commentators, the
buzz can be immense, but when your sector plunges, as with high-tech stocks
over the past couple of years, it can feel as if you’ve been kicked in the
teeth, says Huddart. "We have to be careful to nurture those people and
make sure that their confidence has not been shattered," he adds

Teamwork

Where
things do get too much, Merrill Lynch sponsors a confidential helpline, he adds.

"It
is a very team-oriented game. When someone is struggling with something, either
personal or professional, you will find, almost inevitably, one or two
colleagues will be there to help out."

Other
banks offer employee assistance schemes and well-being programmes, counselling
or information services. Many will have private medical screening and annual
health days with voluntary screening. One bank is even planning to launch a
health intranet site next year for its staff.

The
analyst’s day is a long one. Nick Bubb, long-standing retail analyst at SG
Securities, says "The job is demanding. I get up at 5.30 every morning and
it wears you out."

Bubb
often works through to 6pm, unless he has to attend a corporate event, and will
also spend his Sundays reading reports.

But
the upside outweighs the tiredness, stress and pressure. "It isn’t
compulsory. You don’t have to do it," he says.

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