What is a research analyst?

Researchers, also known as analysts, report on trends in company share prices, industry sectors or the prices of bonds or other assets. Sales people, private investors and investment bankers use the information to advise clients on investing in that sector. Researchers spend their time scouring companies’ balance sheets and talking to company directors.

A research analyst (or securities analyst, financial analyst, equity analyst, investment analyst) will write reports on the companies they are supposed to cover, trying to describe the businesses and their opinion of the company’s investment potential, usually from a fundamental analysis standpoint.

They summarize reports with a rating, such as “buy”, “sell”, “market perform”, “overweight”, “hold”, etc.

The analysts get their information by studying public records of the company and by participating in public conference calls where they can ask direct questions to the management.

Research analysts work for banks, insurance companies, investment trusts and pension funds, securities firms, and other businesses, helping these companies or their clients make investment decisions.

What does a research analyst do?

You will use spreadsheet and statistical software packages to analyze financial data, spot trends, and develop forecasts. On the basis of your results, you will write reports and make presentations, usually making recommendations to buy or sell a particular investment or security.

You will interact with corporate financiers helping them with new business analysing the companies.

Market Makers and Sales traders will want you to analyse reports quickly and on the spot to aid them in making quick decisions.

You will also interact with the sales team providing them with ideas to market equities to investors.

Senior analysts may actually make the decision to buy or sell for the company or client if they are the ones responsible for managing the assets. Other analysts use the data to measure the financial risks associated with making a particular investment decision.

You will probably work in teams, analyzing the future prospects of companies that want to sell shares to the public for the first time. You will have to check the forms and written materials necessary for compliance with FSA regulations are accurate and complete. You may have to make presentations to prospective investors about the merits of investing in the new company.

Financial analysts also work in the M&A departments, preparing analyses on the costs and benefits of a proposed merger or takeover.

Some financial analysts, called ratings analysts (who are often employees of ratings agencies), evaluate the ability of companies or governments that issue bonds to repay their debt. On the basis of your evaluation, a management team assigns a rating to a company’s or government’s bonds. Other financial analysts perform budget, cost, and credit analysis as part of their responsibilities.

Financial analysts employed in commercial banks perform “balance sheet analysis,” examining the audited financial statements and corollary data in order to assess lending risks.

In a stock brokerage house or in an investment bank, you will read company financial statements and analyze commodity prices, sales, costs, expenses, and tax rates in order to determine a company’s value and project future earnings.

In any of these various institutions, you will often meets with company officials to gain a better insight into a company’s prospects and to determine the company’s managerial effectiveness.

Usually, you will specialise in an entire industry, assessing current trends in business practices, products, and industry competition. You must keep abreast of new regulations or policies that may affect the industry, as well as monitor the economy to determine its effect on earnings.

The hours will normally be reasonably civilised but the deadlines tend to be moment to moment rather than a few days.

How do I get a graduate scheme / internship / entry level job or career in Research Analysis?

Obtaining a graduate scheme, internship or entry level role in research analysis can be very challenging and competitive – though very achievable by getting your application, CV, interview and general approach right. You can guarantee that ninety percent of applicants for research analysis roles will not know how to apply, so getting your application in the top ten percent makes things a lot more achievable.

Approaching the company in the right way will make all the difference. Combining the right approach with a strong interview (and in some cases assessment centre) writ a strong focused tailored CV will go a long way. Make sure you have gone through the free videos on this sight by entering your name and email address in the top right of this screen underneath the video. Once you have filled this in you will have instant access to everything you need to secure your career in research analysis.

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