I'm probably one of the few people on here that has done both. So I thought that I would share a guide on the pros/cons of both. A lot of these items have been covered in other posts so I'm going to focus on the nuisance and specific details which others often leave out. I don't want to make this a book so I'll split it into different parts over a few weeks. I hope you find it useful.
Work Life Balance Basics
As most of you have likely read, you can expect an average of an 80 hour work week in IB compared to about 60 to 70 hours in ER. However, the hours aren't exactly apples to apples. In IB, you're under what I would consider a mid-level of stress at all times. In IR, you're under a low-level of stress most of the time but are occasionally hit with extremely high levels of stress when a press release comes out., you are really put on the spot and have to figure out things quickly and write a note right away. In IB, you are rarely put in that sort of situation. Sure, your associate or VP can make you feel like the sky is gonna fall, but usually it's really not.
Another work life balance issue is earnings season. A single week of earnings in ER is worse than anything that I ever experienced in IB. You work about 100 - 110 hours under very high stress levels. In IB, I worked plenty of 100+ weeks which were hell but still not this bad. The stress is much higher when five companies report earnings in a single day and everyone wants an analysis now and those five reports have to be published tomorrow. I find that much more stressful than having a presentation due in three days time but you don't even have a shell ready yet. Both scenarios are not good but the intensity during earnings is way higher.
As far as schedules go, also keep in mind that depending on your time zone, you could be waking up every day between 3 am to 6 am in equity research. I've known West Coast analysts who have quit their jobs just for this reason. You start having a really weird schedule. At first, I thought that I would get used to it quickly, but man, there's just something about waking up that early. It probably took me two years until I was really in the groove.
However, speaking of schedules, weekends are much different in equity research. Saturdays are sort of sacred and untouched. More than working 10 or 20 hours less than banking, this is the biggest perk. You can really plan out your life a lot better with a single almost guaranteed day off each weekend. Furthermore, Sundays are usually half days with just some prep for the next week. In IB, I had a few stretches were I worked every single day for five weeks, and I never knew when there would be a day off. So that Saturday is a big deal.
Nature of the Work
Also another great part of equity research is that although the work hours are similar to banking, the work is very different. In equity research, you're always doing meaningful work that has to be done. A press release comes out and you have to update the model and you have to write the report. For industry pieces, you can spend weeks gathering info, but it is all stuff that must be done and adds value to the final product.
In banking, I spent so much time just doing stupid bullshit like staying up until 2 a.m. because the MD wanted to change the presentation's theme from medium blue to light blue or he wanted to add another 10 slides which added absolutely no value to the presentation. In equity research, you're really treated a lot more like a human being and a colleague in the early career rather than an emotionless machine that churns out pitchbooks regardless of the time of night.
Progression of Work Life Balance
With that said, the progression of hours is worse in ER. I started in ER working about 60 hours per week. By my third year, I was probably working 70 hours per week or maybe a little more. As you get better at your job, the analyst typically hands over more of their responsibility. Sure, sounds great at first, but after a while, you are just doing more and more work while the boss is doing less and less.
Furthermore, if the bank starts giving you your own coverage (which is great right?), your work life balance can get really out of whack because you're doing 60 to 70 hours for your analyst and then you're putting in more time for your own coverage. This is one of the reasons that young analysts typically have pretty bad research reports. It's not that they're inexperienced - it's that they're all written off the clock. If you get to this transitional stage between full ER analyst and associate, you can start saying goodbye to some of your free Saturdays and Sundays. So in comparison to banking where life gets easier over time, in equity research, your life starts easier, gets worse, and then if you become a full analyst starts to improve again.
Do also remember that the work/life balance has a certain floor in ER. Even as a full analyst with 20 years on the Street, you're still going to be working at least 60 hours per week waking up at 3 am to 6 am. So it never gets better than that. I have seen some analysts that start delegating more and more work to very good associates to the point where they work only 50 hours per week, but then the work product begins to suffer.
Overall, ER is definitely a better lifestyle. Like I said earlier, the free Saturdays are huge regardless of the rest of the week and you are also just treated a lot better as a person. I could work ten years as an equity research associate and be OK with it for the most part whereas anyone would lose their mind after ten years as an IB analyst.
Anyways, I hope that this was helpful or instructive. Watch for my post next week on ER vs IB exit ops.
Mod Note (Andy): top 50 posts of 2017, this one ranks #41 (based on # of silver bananas)