Would You Pay $2,500 For One Hour With An Equity Analyst? This I-Bank Seems To Think So...

Tyler Durden's picture

Wall Street equity analysts are paid 'yuge' salaries to employee the finance skills they picked up from their business school professors to value various corporate securities and asset-backed securitization structures, among other things.  And while their valuations of those securities have served as a frequent source of comic relief for many of us over the years, no bastardization of basic financial concepts tops recent attempts by the financial elites of the world to place a value on their own services.

As evidence of that fact, we present to you 'Exhibit A' from a Bloomberg article published earlier today suggesting that Morgan Stanley, who is still trying to figure out how much their equity research is worth to clients after nearly a year of internal cogitation, is considering asking hedge fund clients for $2,500 for the extreme pleasure of spending just one hour with one of their esteemed research analysts.

Fund managers will have to pay about $2,500 for an hour-long, one-on-one meeting with some of Morgan Stanley’s equity analysts once Europe’s MiFID II financial rules kick in, according to people with knowledge of the plan.

 

The fee is on top of the annual rate Morgan Stanley plans to charge some clients for basic access to its equity research portal once the regulations come into force in January, the people said, asking not to be named as the negotiations are private. The bank also quoted a small client $25,000 annually for five users for basic equity research access and five total hours of analyst time, another person said.

Equity Research

Of course, any I-banking summer intern could easily spot the outlier in Morgan Stanley's proposed $2,500 hourly billing rate when matched up against comps from the legal industry.  According to the National Law Journal, even the priciest partners at the best law firms can only command hourly billing rates equal to roughly half of what Morgan Stanley wants.

Meanwhile, the 'median' partner at any given law firm only gets paid about one-fifth of Morgan Stanley's proposal.

As McKinsey & Co. recently pointed out, the end result is that new European regulations designed to separate research and trading revenue for investment banks will likely cost them more than $1 billion as clients become pickier about what they pay for. 

Of course, ultimately the market will set a clearing price for the 'value add' of equity analysts...and we're almost certain it's going to surprise some folks.

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Raffie's picture

Good luck with that.

HRClinton's picture

Only is she is the most amazing physical specimen, and has unsurpassed sex skills.

covfefe MICdotard's picture

golf balls & garden hoses come to mind here

NoDebt's picture

If I had a guy I thought was so smart he was worth $2500/hr the last thing I'd do is rent his brain out to any Tom, Dick and Harry that wants to chat it up with him for a while.  I'd hide him away in a the darkest corner of the building, have him so nailed down with non-disclosures and non-competes he couldn't take a piss without my say-so and pay him wheelbarrows full of money to whisper in nobody's ear but my own.

In short, the rent is too damned high.

 

philipat's picture

The real price (value?) for Sell side BS (We don't want to offend our Investment Banking clients or potential clients so everything is rated a "Buy" or "Buy the Dips")? Approximately zero. These people have become so full of their own hubris it's comical.

espirit's picture

She better be hot, real hot.

...and give me an aortic rupture.

peddling-fiction's picture

This guy you mention, No Debt, hidden away somewhere, would train people worth $25 bucks an hour with an attractive script, that then will charge you the $2.5K an hour. That is how it is done folks.

Davidduke2000's picture

I doubt too many people understand what you are saying , maybe they never heard of that expression. 

torak's picture

I'd spend $2500 for an hour with Nina Hartley even at her age.  Experience over youth is my ballywick any day of the week.   And needless to say, one of the nicest posteriors in the business! <sigh>  A financial analyst?  Only if her name is Nina Hartley.  "So Nina, how can I position myself not to get fucked in the ass, errr, finacially speaking.. And speaking of which, what do you have going on right this moment?"  <laughs>

New_Meat's picture

Can't really think of anything that is worth that much for the "experience".

Much cheaper at the 15 minute or 1 hour increments, probably more satisfying.

 

YUNOSELL's picture

Let the market decide -- If they give more value than the $2500 for that, then great, clients will keep coming back -- but in this environment now I can't see them being worth it -- I mean shouldn't cost $2500 to advise someone to BTFD

Iconoclast421's picture

Well it only takes 2 seconds to say BTFATH so when you break it down it dont really cost that much! $1.38 to be exact.

dirtyfiles's picture

isn't that with golmansocks already?

847328_3527's picture

I did not pay even that much for my last car.

 

So count me out.

marketheretic's picture

10 years ago at MS my clients had to do at least $500k annually to get one on one with an analyst. If not at that level I had to put together a business case as to why MS should allocate analyst time. fwiw

artvandalai's picture

You've got to be kidding. I've got a better idea. I'm going to take my $2500 and flush it down the toilet. If I watch it go down real carefully I'll realize as much value as an hour with an analyst. Perhaps more.

Downtoolong's picture

 

What the fuck are hedge fund managers doing to earn their 2/20 if they still have to pay an equity analyst $2,500 / hour for advice?


  

NoDebt's picture

A very valid question.

 

natxlaw's picture

Neo Anderson, can you get me in at the friend rate?

razorthin's picture

So you need an analyst to tell you if it's not made of metal, it's going up?

Yes We Can. But Lets Not.'s picture

$2,500?  Does that entitle the client to preferred trade settlements, Hillary-style?

hsun85's picture

No way I am spending $2500 so they can tell me to long AAPL.

Albertarocks's picture

Hahahaha... no shit!  I laughed so hard at that that I nearly farted.  And to "buy AAPL" is most likely the drivel they'd serve up for you as well.

messystateofaffairs's picture

An "equity analyst" couldn't pay me $2,500 to put up with him for 15 minutes.

Last of the Middle Class's picture

If an equity analyst had any information worth $2,500/hr he damn sure wouldn't share it with you or anyone else for that matter. Damn people are dumb. IDKWTMITIY!

JustPastPeacefield's picture

$2500 for an hour. Hmm, will she do anal?

Secret Weapon's picture

Does she have nice tits?

 

ali-ali-al-qomfri's picture

Paid $2,500 and the analyst said I should have bought Bitcoin years ago.

Advice was spot on accurate.

 

SweetDoug's picture

'

'

'

Buy low, sell high.

OJO

V-V

 

peterk's picture

Only 20% of people in investments make money.

Of those, prehaps 70% just  do average, 25% do very well... that leaves 5% of the  top 20% who make a killing.

There is no longer term market for that analystsservices.. only selling to newbies time and time again... and fat wealthy  fools who are going to looe their money anyway

Cluster_Frak's picture

I worked in the industry. I had to be paid to work with these idiots. I would not pay to listen to them. They are for most part puffed up and have little to offer unless the trend is clear. Also, why would you want to take advise from a guy with no skin in the game. You want me to buy Tesla, well show me your portfolio. If you have 5% invested in Tesla, sure I will listen. Otherwise, fuck off.

Sanity Bear's picture

Simple math says that if you're paying $2500 for an hour of time to a person who works full time but pulls in less than $5 million a year, you're an idiot.

But a person who makes $5 mil a year doesn't need your $2500 and isn't putting his hours out on a shingle for hire. He's too busy to meet with you for $2500.

After all, he himself is dropping ten times that on some Congressional aide who is curiously permitted to engage in legal insider trading.

NMA's picture

2500 per hour... shes going to have to be really good for that.....