Only The Good (/Bad) Die (/Quit) Young

Posted by Bess Levin, May 21, 2007, 4:11pm

We already know that there’s an extremely high turn-over rate at Forbes.com because of the “sweatshop”-like conditions, but would somebody like to explain the attrition rate of 50% among analysts at Citigroup, Credit Suisse, Goldman Sachs, Lehman Brothers, Merrill Lynch and Morgan Stanley? Surely Dick Fuld isn’t making anyone stitch t-shirts by hand for 16-hours a day as part of his partnership with the Gap. (He knows plenty of less uppity kids in Vietnam).

So what then? Institutional Investor reports that 47-62% of analysts at those firms, who published research in 2003, dropped all coverage by 2006. There was no indication of who switched to other firms, went buyside or retired. The study noted surprise at such steep attrition rates and attributed the highest factors to “commission compression, the sell-side business model changes brought on by the Global Research Settlement, and increased competition for research from the buy-side.” But we want more details—did associates peace because their jobs sucked? Because Lloyd Blankfein was/is too palsy with his employees? Because they wanted to be shepherds? Let’s hear if from the horse(s)' mouth(s).


50% Of Analysts Dropped Out Since '03 [Daily ii]

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Posted in: Analysts

Comments

Posted by AJ, May 21, 2007 4:46PM

It's because you can't make real money in research anymore. Everyone jumped buyside or into banking.

Posted by , May 21, 2007 4:52PM

bess levin has a smart mouth and i like it!

Posted by BSD, May 21, 2007 4:59PM

AJ is right. Isn't it pretty much assumed now that sell-side research is nothing more than a training ground for the buy-side? There have been quite a few reports on how sell-side research is dying, I think DB even published a few.

Posted by , May 21, 2007 5:00PM

no, it really is b/c they wanted to be shepherds. db knows too much!

Posted by AJ, May 21, 2007 5:06PM

Well, according to the WSJ, being a shepherd is a great way to get a greencard so don't knock it: http://online.wsj.com/article/SB117950868133407707.html?mod=googlenews_wsj

Posted by hedgie, May 21, 2007 6:15PM

No joke. There are little Peruvian shepherds working with goats in the hills in Laguna Beach. The goats keep the grass short, to help prevent brush fires. I can see these little dudes when I'm out surfing.

Posted by anonymous, May 21, 2007 6:27PM

"Because they realized they weren’t associate material?"

Associate is a lower position than Analyst in research.

Posted by , May 22, 2007 7:32AM

wow is it possible there is more than one title structure than in banking?!

yes, associates do not publish research, analysts do, although the associate's name does frequently appear on the research beneath the analyst (assuming said assoc has passed her 86 and 87) so this is probably what the study is counting, not senior analysts most of whom are making pretty good coin to basically be travelling salespeople

Posted by , May 22, 2007 7:33AM

once again demonstrating how little we understand, idolizing wall st but never really getting it?

Posted by anonymous, May 22, 2007 9:59AM

Anonymous 7:32, the study is clearly referring to Analysts, not Associates. Everytime an Analyst initiates/drops coverage or upgrades/downgrades a stock, the change is recorded in IBES database under the Analyst's name (not under the names of the Associates who helped out).

As for the title structure is universal in sell-side finance: in Investment Banking the pecking order is Analyst to Associate, and in research it's Associate to Analyst.

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