Otherwise known as financial analysts, or investment analysts, securities analysts perform some of the most fundamental computational work regarding the management of assets. Financial planners are another type of securities analysts, but rather than manage the assets of corporations and other business entities, financial planners help individuals manage their personal finances. What these business careers have in common is that they both govern assets.
Whereas financial planners come in only one variety, there are three types of specializations for securities analysts. First, there are buy side analysts. These specialize in working for companies with a large amount of capital to invest, and so become more familiar with the ways in which to purchase, as opposed to selling. Institutional investors, including mutual funds independent money managers, and any nonprofits with large endowments, such as old universities, are examples of institutional investors; these have one or a team of buy analysts working for them to ensure they use the endowment in the most effective and optimized way.
When a team of analysts is necessary to run the finances of an institution, there is usually a portfolio manager, to lead them. Hedge fund and mutual fund managers, while performing a similar job, requiring similar levels of experience and expertise, are called fund managers. Other components of securities analyst teams may specialize as risk analysts, or ratings analysts, who judge how capable an entity is of paying off its debts.
On the other end of the spectrum lie sell side analysts, who specialize in the selling of investments. Most notably, banks implement sell side analysts as their financial managers, including the Federal Reserve Bank. All of these institutions need sell side analysts to optimize the way in which they sell securities.
Financial analysts tend to hone in on a specific market, region, or product in order to gain the highest level of efficacy for their companies. Thus, even once their training is complete, there is an entirely new game to be played in the business world.
As far as training and education go, a bachelor’s or graduate degree is necessary, in finance, business, statistics, economics, or accounting. After graduation, in certain cases, further licensing/certification is a prerequisite; buy side analysts tend to require fewer of these additions than sell side analysts.
Regarding the job market for securities analysts, it continues to expand at a greater rate than most other segments, with a 20% increase expected between 2008 and 2018. Recently, there have been an increased number of securities analysts who are assigned to the markets of countries outside the U.S.
That is not to say, however, that competition will not be difficult and trying. As the average salary of a securities analyst is $73,150 as of May 2008, the field will still be difficult to break into.
In fact, it is well known that most entry-level financial analyst positions entail long hours and a hefty workload, with expectations for competition. That said, if one is willing to work hard, it is a stable job market to be in, once the employee has undergone the initial entry-level period.
Financial analysts require the use of strong math and problem-solving skills in addition to analytical expertise. At the same time, as with most occupations in the world of business, solid communication skills are also needed and used. In order to be good at what they do, they need to cultivate a detail-oriented nature.