Financial research analysts offer investment advice to individuals and businesses. They may work for banks, securities firms, pension funds, insurance companies or other investment firms. According to the Bureau of Labor Statistics, 250,600 financial research analysts were employed in the United States in 2008. Growth is expected in the field, but the industry can be affected by market conditions because fewer investments tend to be made during economic downturns.
Financial research analysts study data and offer suggestions on how investors should organise their portfolios. In many cases, analysts use statistical software to examine information and prepare reports for clients. Financial research analysts may specialise in researching and analysing a particular industry. They consider all issues that affect the industry and the prices of stock. Analysts may analyse industry trends, new products and prices in the market as well. They compare company earnings with other stocks in the industry and may visit company offices to interview executives to get a better sense of how a company is run. Financial research analysts must also consider a company’s track record and study yearly earnings figures. Once they gather the data, they attempt to make educated predictions about how a company will fare in the future. Then they make investment recommendations.
Financial research analysts must have a bachelor’s or graduate degree. Most analysts study a field related to finance, such as accounting, business, economics or statistics. For advancement opportunities, a master’s degree in business administration (MBA) or a master’s degree in finance may be necessary. Individuals who are interested in a career as a financial research analyst should take classes in financial analysis methods, accounting policies, corporate budgeting, risk management, bond valuation and options pricing.
Licensure and Certification
Depending on the work that they do, financial research analysts may require a license. The financial Industry Regulatory Authority oversees the licensing for financial analysts and other securities professionals. Requirements usually include employer sponsorship. Many financial analysts also choose to obtain a certification to demonstrate their expertise. The CFA Institute offers Chartered Financial Analyst (CFA) credential to analysts. Candidates must have at least a bachelor’s degree and four years of professional experience. In addition, they must successfully complete three exams that test knowledge in a variety of subjects including securities analysis, accounting, corporate finance and risk management.
According to the Bureau of Labor Statistics, the median annual wage for financial research analysts was £47,547 as of May 2008. The 10 per cent with the highest wages were paid more than £91,695, while the 10 per cent with the lowest wages were paid less than £28,236. The middle 50 per cent were paid between £35,704 and £64,415. Many financial research analysts receive annual bonuses as well, which may mean a substantial increase in earnings.
The Bureau of Labor Statistics estimates that employment for financial research analysts will grow by 20 per cent between 2008 and 2018, which is a much faster rate than the average for all occupations. Investment levels are expected to increase, as is the complexity and diversification of investments. As a result, financial research analysts will be needed to research, analyse and suggest potential investments. Competition will be fierce in the field, however. The high wages associated with the occupation attract many job seekers, so there are usually more candidates than job openings. Individuals with a master’s degree or CFA certification should enjoy the best prospects.
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