Job Guides - Investment Analyst

The Job and What's Involved

Investment analysts study the performance of companies and industries, and make recommendations to stockbrokers, traders and fund managers about the best investments for their clients. An analyst's recommendations aim to highlight new investment opportunities and also show when an investment can be less profitable.

There are two, broad types of investment analyst:

Sell-side Analysts research individual companies for private investors and unit trust fund managers. They examine a company's annual reports and financial statements to find information on numbers of employees, output, size of profits and turnover, and compare these figures with other companies to assess the outlook for that company's business.

Buy-side Analysts look at investment opportunities for pension funds, investment banks, and insurance and life assurance companies.

Analysts tend to specialise in one sector, for example pharmaceuticals, energy or telecommunications.

An investment analyst's duties include:

Analysing industry performance reports.
Considering the economic stability of different countries.
Examining how factors such as oil prices or currency exchange rates can affect a company's value in the global and local economies.
Predicting whether individual share prices will move up or down.
Analysing individual companies and their financial accounts.
Considering the economic implications of factors such as weather, natural disasters, political announcements, war and conflict.
Reading detailed reports, visiting companies and speaking to management teams.

Investment analysts present their findings and investment forecasts in written reports to stockbrokers and fund managers. They usually have daily meetings with other analysts, the sales team and traders, and also report to a senior analyst or fund manager.

Investment analysts generally work Monday to Friday. They often start before 7am to be ready for the opening of the London Stock Exchange and closure of Far Eastern markets, and stay until after 6pm. Analysts involved in markets operating in different time zones may work longer hours. Weekend work is sometimes required.

Most of the work is office-based, but there may be some opportunities for travel, including overseas.

Starting salaries are, on average, between £26,000 and £35,000 a year.

Getting Started with this Career Choice

Investment analysts are employed by large financial institutions such as investment banks, stockbrokers and specialist fund or asset management firms. While most UK jobs are in London, there are also opportunities in most major cities including Birmingham, Leeds, Manchester, Glasgow, Edinburgh and Cardiff.

The number of vacancies is growing, with analyst posts being the most popular route into investment banking. Competition for jobs is fierce.

Large employers generally recruit new graduates each year. Application deadlines for trainee posts are usually in November or December of the year before the graduate programme starts.

Vacancies are also advertised in national newspapers, financial publications, financial recruitment agencies and on specialist websites such as www.efinancialcareers.com

Education and Training

Most investment analysts are graduates, with at least a 2.1 degree. No specific degrees are required, but subjects such as economics, accountancy, maths and statistics are particularly relevant. A second language may also be useful.

The minimum qualifications for a degree course are normally two A levels/three H grades and five GCSE/S grades (A-C/1-3), or equivalent qualifications. Candidates should check with colleges and universities for specific entry requirements.

Increasingly, investment analysts have a postgraduate qualification, such as the globally-recognised Chartered Financial Analyst (CFA) or a Masters in Business Administration (MBA).

Graduate trainees have often done a summer internship before the final year of their degree course. Some employers offer full-time jobs to as many as 60 to 95 per cent of their interns.

Applicants may have to attend an assessment centre, deliver a presentation to a panel and take psychometric and aptitude tests.

There may be some opportunities to start without a degree, in a junior research or administrative support role, and then progress to work as an analyst. Applicants generally need good A levels/H grades and some relevant commercial experience.

A Few More Exams You Might Need

New staff follow an induction programme. Much of the training is on the job, working with experienced analysts.

Generally, investment analysts involved in investment management or advising clients must obtain a professional qualification and be registered with the Financial Services Authority (FSA). However, a qualification is not mandatory for analysts working in wholesale institutions. Appropriate qualifications are offered by a number of organisations, including:

Securities & Investment Institute (SII)
UK Society of Investment Professionals (UKSIP)
Chartered Institute of Bankers in Scotland (CIOBS)
Chartered Financial Analyst (CFA) Institute

A full list of appropriate examinations can be found on the Financial Services Skills Council (FSSC) website, www.fssc.org.uk.

The UKSIP Investment Management Certificate (IMC) and the SII Certificate in Securities & Financial Derivatives/Investment Management are appropriate examinations for working in investment management. There are no set qualifications to take these courses.

Many analysts then progress to the CFA qualification, a home study programme with three examined levels.

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Skills and Personal Qualities Needed

An investment analyst should:

Work well independently and as part of a team.
Have good communication skills in speech and writing.
Have an enquiring mind.
Have good numeracy skills.
Be decisive, with an eye for opportunities.
Be confident in making accurate, informed decisions.
Work well under pressure.
Be responsible and trustworthy.
Be well informed about financial markets and the global economy.
Be good at calculating risks and forecasting trends.

Your Long Term Prospects

Promotion depends on performance. A successful analyst can usually become a company vice-president after seven to eight years, and executive director after ten to fifteen years. High-performing individuals and teams are often head-hunted by other employers.

Analysts may have to move to different companies to progress. They can also move between the sell and buy side of the business, or specialise in a particular area.

There may also be opportunities to work abroad.

Get Further Information

Chartered Financial Analyst (CFA) Institute,
10th Floor, One Canada Square,
Canary Wharf, London E15 5AB
Tel: 020 7531 0751
Website: www.cfainstitute.org

Chartered Institute of Bankers in Scotland (CIOBS),
Drumsheugh House, 38B Drumsheugh Gardens,
Edinburgh EH3 7SW
Tel: 0131 473 7777
Website: www.ciobs.org.uk

Financial Conduct Authority (FCA),
12 Endeavour Square, London E20 1JN
Tel: 0300 500 8082
Website: www.fsa.gov.uk

Financial Services Skills Council (FSSC),
51 Gresham Street, London EC2V 7HQ
Tel: 0845 257 3772
Website: www.fssc.org.uk

London Stock Exchange,
10 Paternoster Square, London EC4M 7LS
Tel: 020 7797 1000
Website: www.londonstockexchange.com

The Key Financial Regulators Worldwide
Website: https://commodity.com/brokers/regulators/