How to Break into Equity Research from Commercial Banking?  

Commerical Banking to Equity research

Commercial Banking to Equity Research – Commercial Banking is all about management of bank accounts, fixed deposits, credit, mortgages etc. Equity Research on the other hand is about financial statement analysis of the company for Buy/Sell Recommendations. Both the options are very different from each other. So, how do you break into Equity Research from Commercial Banking?

In this article, we try to understand how a successful career switch can be made for commercial banking to equity research.

Commercial Banking

Commercial banks are engaged in providing an entire range of retail banking services to individuals and businesses including checking and savings accounts, fixed deposits and other products along with offering a line of credit to its customers. Most of the commercial banking roles require a good level of communication skills, knowledge of finance and technical expertise would be an added advantage. However, the exact nature of prerequisites depend on the kind of role taken up. Some of the most common positions in commercial banking include trust officer, loan officer, bank teller, mortgage banker and branch manager along with others.

Equity Research

Equity research essentially involves in-depth stock analysis employing a number of useful tools and preparing detailed reports on the worth of a specific investment. Equity research analysts need to have an expert knowledge of financial modeling and the principles of valuation on which a major proportion of their work is based. Equity research holds great value for the industry at large as some of the key investment decisions by individual and institutional investors is based on the work of these analysts. To be successful at it, one should have incisive analytical abilities, expert knowledge of financial concepts and a great deal of clarity in complex concepts related to valuation and other areas to be able to make an objective assessment of investments based on relevant factors.

Those planning to make a shift of career from commercial banking to equity research might already have a good idea about both of the areas but we have attempted to broadly define the professional roles for a reason, to enable one to see the difference between these two.

Commercial Banking vs Equity Research

As we can see clearly, these are two completely different areas of finance, with little direct co-relation, one of them exclusively dealing with provision of banking services to clients and the other dealing with comprehensive analysis of certain stocks including their valuation, which is not an easy task by any means.

Let us chalk out a few major differences between commercial banking and equity research here:

  • Commercial banking involves dealing with clients on regular basis whereas equity research has little in terms of regular public engagement. One needs to be able to work independently in equity research.
  • While commercial banking does require a good knowledge of finance and banking practices, equity research requires a whole different level of acquaintance with financial principles for stock analysis, financial modeling and valuation.
  • Equity research also requires a detailed knowledge of economic factors influencing the stock movements and most of the knowledge acquired as a commercial banker may not be of much use.
  • Equity research requires a higher level of patience, self-discipline and ability to assimilate complex set of factors into a coherent whole to be able to prepare a study which can be of great utility to investors. One should also excel at writing and be able to prepare detailed reports based on the research work undertaken.
  • Equity research also requires a higher level of work ethics as analysts are routinely required to interact with top-management of the firms whose valuation they are working on. This essentially involves a tightrope walk to not alienate the management while maintaining complete neutrality in stock valuation. There are few such comparisons in a commercial banking role.
  • In commercial banking, risk-reward component is rather low as most of the decision making is by consensus with other team members or those in higher positions. On the contrary, in equity research there is a much higher risk-reward component and independent decision-making and problem solving skills play a key role. Growth opportunities could largely depend on the success of recommendations made by an equity research analyst.

Now let us get to the part where we discuss possible ways to make a successful switch from commercial banking to equity research.

To begin with this arduous task, it could be critical to find some useful practical advice and assistance, which most likely can come from professionals who have already made a switch from commercial banking to equity research. Understandably so, it may not be the easiest of things to be able to zero in on the right individuals as few actually make a leap of this kind in terms of career roles. However, with the right kind of networking it may not be that much difficult to locate someone who has made a switch, and successfully so.

Apart from your professional network, it could be very useful to scour through professional networking sites including LinkedIn, of course, which could be of great utility in this respect. These individuals could help you immensely with this professional transition and you could benefit in these ways.

  • Learn from their experience of transition
  • Receive useful guidance
  • Prepare for obstacles you might encounter along the way
  • Most importantly, they can better appreciate your point of view and might be able to help with recruitment as well.
  • Alternatively, you could benefit from their recommendation for equity analyst role in a good organization.

One of the primary reasons behind the significance of such a find is that conventional hiring process is unlikely to work in your favour most of the time. Here, networking could help you out more than anything else.

Earn the Right Credentials

This could be one of the most important steps in making this switch, as you may not be able to make real progress in the desired direction without possessing suitable credentials. Some of the relevant choices include:

  • CFA (Chartered Financial Analyst) could perhaps be the single most significant certification which can help validate your skills in equity analysis, financial modeling and valuation techniques. Completing CFA program is not going to be an easy task by any means but you can plan and focus on clearing individual CFA levels and by the time you complete the certification program, you could well be in for the long ride. This would surely help open up a number of opportunities in the field of equity analysis. You can checkout the Complete CFA Exam Guide here.
  • Alternatively, getting an internship in equity research could also help, and might prove to be an even better option than pursuing a certification program as it brings along the added benefit of practical exposure to the field. This might be considered a rather risky move, especially if you are already a middle-level professional but it could really be worth it.
  • Also, you can enroll for professional courses on Equity Research that will help jump start on equity research skills.

Acquire Necessary Skills

  • This could be the most difficult part of the deal, since you must already possess the basic skills required and can only work on refining them to your advantage.
  • Some of the key skills needed for an equity research analyst include the ability to make independent decisions and complex problem solving among other things.
  • An equity researcher would be required to think critically to be able to paint a clear picture of the prospects of a certain investment through fairly detailed equity research reports.
  • This brings us to equity research report writing, another important skill for the job, as one might have to prepare a number of documents including well-researched reports focusing on a specific investment.
  • Financial modeling holds the key to successful application of the principles of equity research and if you can be good at it, it would add to your chances of success.
  • You must have expert knowledge of Excel, as an indispensable tool for performing a number of operations.
  • You have to be really good at preparing and analyzing financial statements and performing ratio analysis along with other tasks of mathematical nature.
  • Also, you should master valuation skills especially the Discounted Cash Flow, FCFF, Comparable Comps, Relative Valuations etc.
  • Should have the ability to express rather complex ideas in a simplified manner and should possess excellent interpersonal skills to be able to communicate effectively across levels.
  • Should be aware of industry-relevant tools and trends and be able to assess how industry-level changes influence a certain business.
  • For further details, you can look at these Top 5 Equity Research Skills
  • You may also consider this Equity Research Course by WallStreetMojo

Cracking the Interview

If you do manage to have an interview scheduled, it is imperative to be able to strategize and develop an effective approach to handle more difficult queries with success.

Now we might take a look at what you have in your arsenal to counter these queries and whether it would really work.


One of the possible queries could be related to commercial banking being your first career choice instead of equity research and why do you want you make a switch now. These questions might sound simple enough, but tackling them the right way could hold the key to making any real headway.

Response: To be able to tackle the most important query about equity research not being your initial choice, you need to work on an original response based on what you really feel about it. Interviewers usually have enough experience and industry awareness at their command to be able to see through any superficial responses, which may not be helpful for you. You should better admit if you were not aware of equity research as a specialized field or somehow could not make an entry due to lack of necessary credentials or any other reasons. It is here that one could learn and truly benefit from the experience of former commercial bankers who have gone ahead to adopt equity research as a career.

Why you wish to enter equity research now is a separate question from the first one, although closely related. So be prepared with a response you really believe in, because if you do not have enough confidence in what you say, another person might scarcely believe you.


Next comes the question of key skills for the job. Most likely the interviewer would put your abilities in equity analysis and knowledge of financial modeling to test before moving ahead.

Response: As far as key skills are concerned, you may need to showcase your knowledge of financial modeling and financial analysis by fielding a few tough questions. Expect the unexpected and be prepared for anything. If you are comfortable with the concepts and know how to apply them, you should fare well in general.


Credentials are a must to make an impression with your interviewer. You must possess relevant certifications as well which would help create greater trust in the eyes of prospective employers.

Response: You should have completed CFA or other relevant certifications we have discussed earlier. It would also be highly useful if you have taken an internship in equity research with a good firm. It could afford an invaluable advantage in terms of helping you acquire practical skills along with the theory.


Last but not the least, the interviewer could call into question whether you have the ideal outlook to be successful at equity research.

Response: To handle queries of this nature, you should be able to display a real interest in exploring equity research and be comfortable at it. You can also talk about some of the transferable skills from commercial banking which work for you in equity research as well, but you have to keep in mind that most of the time, equity research requires a higher level of self-discipline, dedication and self-motivation to succeed. You would need to draw on your knowledge and whatever little experience you might have in the field, maybe in the form of an internship or an entry-level job, which would come in handy.


The decision to switch your career to a more competitive area as from commercial banking to equity research would invariably be a challenging task. However, with the right kind of preparation in terms of acquiring necessary knowledge, skills and credentials, you can make a concerted effort in the direction which might well pay off. The single most important thing is to have confidence in your abilities to be able to see through this career transition successfully.

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