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Investment analyst
Investment analysts study the performance of companies, industries and regions, and make recommendations about the best investment opportunities.
Also known as
- Financial analyst
- Market analyst
Work activities
Investment analysts build up a profile of the performance of companies and industries so they can make recommendations about where profitable investments can be made. They also analyse economic regions and countries, as well as investment types (for example, credit, cash markets and property). There are analysts who work for stockbrokers and investment banks, and analysts employed by investment management firms. These two main types are often known as the sell side and the buy side respectively. There is also a growing number of independent research houses. Sell-side analysts do their research so that they can give advice to their firm’s clients and generate more business for their company. Institutional analysts, working on the buy side, give advice to fund managers in their own organisation.
Analysts closely examine a company’s annual reports and financial statements to find information on numbers of employees, output, size of profits and turnover. These figures are compared with other companies to assess the outlook for that company’s business. They might visit companies to help decide whether they are worth investing in. They talk to members of senior management to find out how efficient the organisation is, to verify the company’s structure and to find out its record in terms of corporate social responsibility. An appreciation of a company’s risk profile is an essential element in producing the investment forecast. Companies also present information through shareholders’ meetings, analyst meetings, webcasts, podcasts and conference calls.
They also use the telephone, the financial press, TV business news and the internet to find information. Desk research is a blend of collecting and manipulating data and information according to the employer’s preferred way of analysing businesses, sectors and markets. Often, the analyst’s work involves developing different methods of screening, analysing and reporting findings. Having gathered and assessed this information, an analyst produces an evaluation of the company’s share price and compares this with the value determined by the market. They usually use financial modelling programs in their analysis. Analysts write reports giving details of their findings and recommendations. They also compile forecasts of the economy, and of specific industries, to give background detail for their work. Sell-side analysts write notes and reports that are not aimed at any one individual client but are general enough to be used with a range of clients. Buy-side analysts might give a verbal presentation of their results to fund managers, explaining the reasons for their recommendations. Some analysts become experts in their field, for example, analysing the creditworthiness of companies, or conducting research into complex and interrelated markets such as telecommunications and IT. Investment analysts’ work can involve travel, depending on their area of responsibility.
Personal qualities and skills
As an investment analyst, you’ll need:
- Good numeracy and IT skills, including spreadsheets.
- Verbal communication and presentation skills.
- Analytical ability to pick out the relevant information from a large amount of detail.
- Good written communication skills for producing clear, concise reports.
- An enquiring mind and research skills.
- An interest in, and understanding of, how businesses operate.
- Teamwork skills.
- To be able to work under pressure and to prioritise tasks.
- Time-management and organisational skills.
- Foreign language skills might also be useful.
Pay and opportunities
Investment analysts earn in the range of £22,000, rising to £65,000 per year. Salaries are generally increased by performance-related pay and bonuses. Other benefits could include private health care, gym membership, medical insurance, and life and pension cover.
Analysts often work long hours, which could include early mornings and late evenings.
Employers include investment consultants and firms in stockbroking, pension fund management, life assurance, unit and investment trusts, and retail and investment banking. There are also openings with large companies that manage their own investment portfolios. Opportunities for investment analysts occur in some larger towns and cities throughout the UK. However, most work is located in London, with a significant number of posts in other major financial centres, particularly Edinburgh and Glasgow.
Where are vacancies advertised?
Vacancies are advertised in national newspapers, on financial job boards, and on employers’ websites.
Entry routes and training
Most entrants are graduates with at least a 2:1 honours degree. Graduates in any subject can apply, although an economics, accountancy, finance, mathematics or statistics degree might give you an advantage. Some degrees include investment and financial analysis. There are also postgraduate courses in investment and in investment analysis. Completion of a summer internship or work placement will give you a strong advantage.
You can also do a level 7 (higher) apprenticeship in the role of senior investment and commercial banking professional.
Trainees must pass an exam that is recognised by the Financial Conduct Authority, such as:
- The Investment Management Certificate from the CFA Society of the UK.
- The Investment Advice Diploma from the Chartered Institute for Securities & Investment (CISI).
Further on-the-job training is complemented by study for a professional qualification such as the CISI Master’s in Wealth Management, or the Chartered Financial Analyst (CFA), supported in the UK by the CFA Society of the UK.
Investment analysts could progress to team leader or manager. After further training, they might move into fund management or stockbroking, for example.
Qualifications
For entry to a relevant degree course such as economics, statistics, finance, maths or accountancy, the usual minimum requirement is:
- Two to three A-levels.
- GCSEs at grades 9-4 in two to three other subjects.
- English at either level.
- Maths at A-level for degrees in maths or statistics.
- Maths at GCSE grade 6 or above if not taken at A-level, for degrees in economics. Some universities require/prefer A-level maths.
Alternatives to A-levels include:
- Edexcel (BTEC) level 3 National qualifications
- International Baccalaureate (IB) diploma. However, course requirements vary, so check prospectuses carefully.
To get onto a higher apprenticeship, you will usually need two relevant A-levels, plus GCSEs in English and maths.
Adult opportunities
Age limits: It is illegal for any organisation to set age limits for entry to employment, education or training, unless they can show there is a real need to have these limits.
Adult applicants usually need a relevant degree and professional experience in accountancy, economics, banking, actuarial work or insurance. Experience or knowledge of particular industrial and business sectors is an advantage. Familiarity with the workings of City financial institutions is important.
If you don’t have the qualifications needed to enter your chosen degree course, a college or university Access course (for example, Access to economics, statistics or accounting) could be the way in. No qualifications are usually needed, but you should check this with individual colleges. Postgraduate courses in investment can be taken, usually following a business-related or other numerate degree.
A range of colleges and universities offer relevant degrees, including with part time/flexible and distance learning study options. Relevant professional qualifications are available by distance learning from the Chartered Institute for Securities & Investment (CISI) and the CFA Society of the UK.
