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

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.


NoDebt covfefe MICdotard Wed, 10/11/2017 - 20:29 Permalink

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. 

In reply to by covfefe MICdotard

torak HRClinton Thu, 10/12/2017 - 07:26 Permalink

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>

In reply to by HRClinton

marketheretic Wed, 10/11/2017 - 20:12 Permalink

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 Wed, 10/11/2017 - 20:15 Permalink

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.

peterk Wed, 10/11/2017 - 22:13 Permalink

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 Thu, 10/12/2017 - 00:08 Permalink

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 Thu, 10/12/2017 - 00:55 Permalink

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.