An equity research position entails providing analysis on securities information to portfolio managers to aid in the investment process. A person working in this field uses problem-solving skills and an understanding of the securities industry to successfully interpret data in a meaningful manner that offers clear information to the individuals who ultimately make the decisions regarding investment choices.

Other variations of the equity research position involve face-to-face interactions with portfolio clients. The equity researcher is responsible for explaining to clients why modeling and key coefficients are important in the implementation of successful portfolios, and the underlying significance behind financial information.

The basis of the research conducted for the equity research position is quantitative in nature and involves identifying and then evaluating the significance of the information in conjunction with recent market activity. The purpose of the research is to aid the inspiration for trading strategies and portfolio selection.

The equity researcher may be asked to develop investment models and screening tools to identify a usable trading architecture that further manages the risk of portfolio selection. It is in the hands of the equity researcher to decide the direction of research and how the information should be codified in a presentable manner to portfolio managers.

Average Salary of an Equity Researcher

The average annual salary for an equity research job is $97,000, according to A majority of the positions in equity research pay less than that, though, with the lower end of the range at $65,000. The high end of the range is around $158,000. A vast majority of the equity research positions are located in New York City, although firms are hiring in major cities such as Chicago, Boston, San Francisco and Milwaukee. The companies that often hire for the equity research position are private equity firms and other financial services firms.

Understanding Trends

One duty required of the equity researcher is to note repeating patterns and trends of current market price changes and create quantitative models or algorithms that attempt to identify profitable opportunities in the selection of stocks. The equity researcher should be able to identify the unique environments that exist in separate international markets and identify the current trends in foreign equities if those markets offer the opportunity to outperform domestic markets.

Understanding portfolio designs is also critical for the equity researcher, and the position may entail identification of diversification methods to support portfolio managers toward their ultimate goal of creating profit-optimizing vehicles for investment through portfolios.

Experience and Education

Companies looking to hire for this position seek candidates with three to six years of experience in data analyst roles, with previous experience in the financial services sector desired. Hiring companies may be more interested in equity experience than data analyst experience, depending on their specific needs. The equity researcher's previous work experience should be related to equity interpretation. The ability to analyze macroeconomic data in a meaningful manner should be proven through previous work experience or likewise-related experience.

The equity research's education on investment and financial theories should ultimately support the development of tools and ideas that can be used to aid the investment workflow. A master's degree in quantitative finance or business is preferred, but a bachelor's degree in computer science, mathematics, finance or other quantitative field is also desirable for a prospective employer.


Candidates should have the ability to quickly read financial income statements, balance sheets and other key summary report statements issued by publicly traded companies as a means of surmising the valuation of equities. The candidate should be familiar with warning signs of poor future performance and other abnormalities in a company's statement of earnings. An understanding of fundamental accounting principles is also required, as well as an understanding of macroeconomic and microeconomic functions.

Strong communication skills are a key requirement of the equity research position, as the researcher needs to be able to translate difficult-to-understand financial coefficients to the portfolio manager and others to clarify why certain financial data is meaningful to the investment process.

The equity researcher should also be organized and employ high analytical skills that provide for an in-depth understanding of the meaning behind extrapolated financial data and have the ability to create new quantitative information that offers additional understanding of the potential direction of prices.

Through frequent use and manipulation of financial data, equity researchers need to be able to locate data from different sources and have literacy in preferred data manipulation software and other programs used in the storage of data sets. Report writing is a key function of the equity research role, and candidates should be able to summarize information and important findings to be used as future reference for equity firms.

Licensing for an Equity Researcher

Some hiring companies may desire candidates to have Certified Public Accountant (CPA) or Chartered Financial Analyst (CFA) certifications to demonstrate proficiency of concepts, but since an equity researcher is not handling client interactions, explaining concepts to clients or placing buy or sell orders on behalf of clients, he does not need certifications or licenses such as the Series 7 and Series 63 to be in compliance with the Financial Industry Regulatory Authority (FINRA).

In the variation of the equity research position in which client interaction is a more integral component of the role, certain certifications to satisfy FINRA requirements for compliance standards need to be obtained. The specific licenses are dependent on the duties expected of the employee.

Job Outlook

There may be more equity research positions opening in the future as quantitative models of trading strategies to mitigate risk become increasingly important in the management of commercial and retail portfolios. While the majority of positions in this industry are located in New York City, as other cities create more robust equity sectors in states such as California and Texas, more openings will be made available. The branch of mathematics that supports the quantitative development of equity and financial information is becoming bigger as the largest of companies look to quantitative data over qualitative data to solve problems.

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