If markets go down, will equity researchers go up?
According to Financial News this week, research is less highly valued when markets are at high levels. When markets go down, it says research recruitment goes up as banks seek to boost flagging equity sales.
Not true, say recruiters. Zaki Ahmed, a consultant with equity search firm Sammons Associates says flagging equities are more likely to focus employers' attention on the quality of researchers than on adding numbers to increase the volume of research produced.
Mark Shirley, a Director at Sheffield Haworth, agrees. If markets fall, he says firms will simply become more choosy about the talent they employ.
Ahmed says companies are already interested in hiring a new species of 'maverick' researcher. Firms are, "Looking for more of an entrepreneurial approach to research, for analysts who can think out of box and can add value to research," he tells us.
Unbundling is to blame. Fund managers are now being forced to account directly for the cost of research and to justify research expenditure by correlating it to the performance of recommendations.