Not long ago, senior equity researchers were on the scrapheap. In 2013, banks cleared out expensive senior researchers and replaced them with less costly mid-ranking and junior staff. Thanks to new regulations, this is now changing.
"With MiFID II approaching, banks know that they need good researchers," says Alex Williams, an equities headhunter at search firm Pelham International. "Under MiFID II, clients will need to justify their research spend. This is making banks a lot more open to hiring senior researchers than they have been before."
MiFID II is due to come into effect across Europe in January 2017. It will mean that the money clients spend on research is 'unbundled' from the money they spend on executing trades. If research is to be worth the price, it will there need to be good.
Jonathan Evans, chairman at search firm Sammons Associates, says research team structures are likely to change as a result: "MiFID II makes it more likely that banks will end up with research teams comprised of two high profile senior people than five mediocre juniors."
Research recruitment has already been animated this year. There was an eruption of hiring in May and June as Citi hired Martin Wilkie, a research analyst at Deutsche, UBS hired luxury goods researcher Helen Brand from Barclays and Morgan Stanley hired Ben Maslen from BAML as co-head of EMEA capital goods research. Other recent moves include banking analyst Jason Napier, who's going from Deutsche to UBS, and Nik Oliver who joined UBS from BAML as head of consumer goods research in June.
Evans says that hiring in the sector remains busy as we go into the second half. "There's a lot more primary corporate finance activity this year, and so banks need to have a good analyst to support that effort. A lot of investment banks have already been looking to upgrade the quality of their analysts."
Zaki Ahmed at Financial Search, a research-focused search firm, says sectors like consumer goods and financials are experiencing more hiring than others. Evan says hiring is across the board in research: "There are still a lot of gaps out there, but there's no particular bank or sector where is hiring is stronger than others."
Banks are certainly advertising for equity researchers in London, although not all current openings are senior. J.P. Morgan has analyst/associate level vacancies in European business services and utilities. Deutsche is looking for European insurance and real estate analysts at associate or VP level. Exane is looking for capital goods and insurance analysts. Citi is looking for a new head of capital goods research, along with a senior associate for the same team. And Morgan Stanley is looking for a VP level steels analyst.