Investment Analyst

Also known as:

Financial Analyst

Introduction

Investment analysts study the performance of companies and industries so that they can recommend the best investment opportunities.

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Work Activities

Investment analysts study the performance of companies and industries so that they can recommend the best investment opportunities.

There are two main types of investment analyst:
• stockbroker analysts carry out research into individual companies both for private investors and for fund managers
• institutional analysts investigate broad investment opportunities for investment banks, insurance companies and pension funds.

Analysts may specialise in one sector, for example construction, energy, pharmaceuticals or telecommunications. They carry out detailed research, analysing:
• published reports on individual industries or industrial sectors
• economic trends within particular regions or countries
• the international and global economy, including the effect of changes in the oil price, currency exchange rates and movements in stock markets worldwide
• the prices of stocks and shares in individual companies and whether they are likely to move up or down
• detailed information about individual companies, including employee numbers, turnover, profit margins and competitiveness
• the effects of factors such as conflict, political developments, natural disasters and weather.

Investment analysts then report their findings and recommendations and to individual clients, stockbrokers and fund managers, usually in writing but sometimes verbally.

Investment analysts may also visit companies and speak to senior managers. This can involve a certain amount of travel. They must also keep up-to-date with the latest economic, financial and world news.

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Personal Qualities and Skills

You need good analytical and numeracy skills. You must be prepared to gain a full understanding of how financial markets and the global economy work.

You must be able to extract relevant information from a great deal of complex information. You must be able to calculate risks and forecast trends.

Good communication skills, both verbal and written are essential. You will have to produce clear reports and explain your findings to clients, stockbrokers and investment managers.

You should be able to work as part of a team and also to work independently and creatively. You must be able to work under pressure and meet deadlines.

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Pay and Opportunities

The pay rates given below are approximate.

Investment analysts earn in the range of £30,000 - £45,000 a year, rising to £50,000 - £80,000. Higher earners can make around £100,000 a year.

Salaries are generally increased by performance-related pay and bonuses, which can be as much as 50% - 150% of basic salary.

Other benefits may include low-rate mortgages, medical insurance, and life and pension cover.

Analysts often work long hours, which may include early mornings and late evenings.

Employment is with stockbrokers, pension fund managers, life assurance companies, unit and investment trusts and retail and investment banks. There are also openings with large companies that manage their own investment portfolios. About 5,000 people work as investment analysts/fund managers.

Most work is located in London but there are a significant number of posts in other cities, particularly Edinburgh and Glasgow. There may also be opportunities to work in other countries.

There is strong competition for jobs.

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Adult Opportunities

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.

If you don't have the qualifications needed to enter your chosen degree course, a college or university Access course (eg, Access to economics, statistics or accounting) could be the way in.

These courses are designed for people who have not followed the usual routes into higher education. No formal 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.

Familiarity with the workings of city financial institutions is important.

A large number of centres offer relevant degree and postgraduate courses by distance learning.

Relevant professional qualifications are available by distance learning from the Securities and Investment Institute (SII) and the United Kingdom Society of Investment Professionals (UKSIP).

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