Equity Research vs Investment Banking: Which Is Right for You?
8 min read
The Core Difference
Investment banking is about transactions. You advise companies on M&A deals, IPOs, debt issuances, and restructurings. The work is project-based, deadline-driven, and team-oriented. When a deal is live, you work intensely until it closes.
Equity research is about analysis. You cover a sector (e.g., European technology), publish research reports on specific companies, and provide buy/sell/hold recommendations. The work is more individual, more writing-intensive, and more intellectually independent.
Day-to-Day Comparison
Investment Banking
- Building financial models (DCF, LBO, merger models)
- Preparing pitch books and client presentations
- Managing deal processes (data rooms, due diligence, negotiations)
- Working in teams of 3-6 people on each deal
- Client-facing from associate level onwards
Equity Research
- Building and maintaining financial models for covered companies
- Writing research notes and earnings previews
- Attending company management meetings and industry conferences
- Publishing investment recommendations with price targets
- Speaking to institutional investors (buy-side clients) about your views
Hours and Lifestyle
IB: 70-90 hours per week during live deals. Unpredictable — a deal can blow up your weekend with no notice. The intensity is real but comes in waves.
ER: 55-70 hours per week on average. More predictable — earnings seasons are busy (quarterly), but you generally have more control over your schedule. Weekends are more protected.
Compensation
IB: Higher total compensation, especially at the junior level. First-year analyst all-in (base + bonus) is typically £80-120K at bulge brackets in London.
ER: Lower than IB at equivalent levels. First-year associate all-in is typically £60-90K. The gap narrows at senior levels, and top-ranked analysts can earn significantly.
Exit Opportunities
IB: The broadest exit options in finance. Private equity, hedge funds, corporate development, venture capital, and more. IB is the classic "two-year programme" that opens every door.
ER: Narrower exits, but deeper in certain areas. Buy-side equity roles (long-only asset management, long/short hedge funds) are the primary exit. ER analysts who become sector experts can become highly valued portfolio managers.
Which Is Right for You?
Choose IB if you want deal experience, broad exit options, the highest near-term compensation, and you thrive in team-based, high-pressure environments.
Choose ER if you love deep company analysis, want to develop a public voice and investment thesis, prefer more intellectual independence, and are targeting buy-side equity roles specifically.
Neither is objectively better. The right choice depends on what kind of work energises you and where you want to be in 5-10 years.
Take Your Preparation Further
For comprehensive IB interview prep covering technicals, behaviourals, and deal discussions, see the IB Interview Bible. Track your target firms and applications with our free Firm Research Tracker.
Ready for personalised feedback? Book a 1-on-1 mentoring session with an experienced IB/PE professional.