A Research Analyst: Their Roles, Responsibilities, and Essential Qualifications
A research analyst is a financial professional who prepares investigative reports on securities or assets for use within their organization or by clients. Also known as securities analysts, investment analysts, or simply analysts, their primary role is to analyze, research, and revise facts, principles, and theories related to securities or assets, helping financial institutions or clients make informed investment decisions.
These reports typically consist of a thorough review of public securities records of companies or industries, resulting in buy, sell, or hold recommendations. Research analysts may work for various financial entities, including asset management companies, investment banks, insurance companies, hedge funds, pension funds, brokerages, and others.
Research analysts can be classified as either buy-side or sell-side analysts, depending on their employer and the audience for their reports. Buy-side analysts, who work for asset management companies, provide recommendations to their firm's portfolio managers to guide investment decisions. Sell-side analysts, on the other hand, work for firms that generate revenue by selling their research.
Investment banks and securities firms regulated by the Financial Industry Regulatory Authority (FINRA) may require their research analysts to register with a self-regulatory organization (SRO) and pass certain exams, such as Series 86/87. Other required securities licenses may include the Series 7 general securities representative license and the Series 63 uniform securities agent license.
Educationally, research analysts often hold degrees in a business-related field, and some employers may demand a master's degree in finance, a chartered financial analyst (CFA) designation, or both. Mathematics and statistics skills, as well as strong analytical and communication abilities, are essential for research analysts to effectively analyze complex financial data and communicate their findings.
According to Glassdoor, the average base salary for a research analyst is around $101,000, with salaries ranging between $76,000 and $136,000. The role can be demanding, with constant learning, problem-solving, and tight deadlines that may contribute to a stressful work environment. However, the critical nature of their work makes them well-compensated.
In essence, research analysts are finance professionals who analyze securities data to help financial institutions or clients make informed investment decisions. By synthesizing market trends, company performance, and financial statements, they develop insightful recommendations to guide asset management firms in their investment strategies. Whether buy-side or sell-side, research analysts play a vital role in the financial industry.
- In the realm of finance, some research analysts may delve into the world of decentralized finance, or DeFi, to analyze tokens and their growth potential, aiding clients in making informed decisions regarding Initial Coin Offerings (ICOs).
- To broaden their skill set and stay ahead of competitors, many research analysts invest in self-development and continuous learning, exploring new avenues such as education and self-development programs.
- Research analysts can include blockchain and digital assets analysts within their profession, who specialize in the analysis and assessment of digital tokens, providing insights to financial institutions and contributing to the overall growth and development of the crypto-finance business.
