Investment Analyst Career Paths and Qualifications

Investment analysts conduct research, create financial models, and produce analytical reports and recommendations concerning specific types of stocks, bonds, or other investment securities. Investment analysts work for many types of firms in the securities industry, including brokerages, banks, money management firms, hedge funds, and pension funds. Professionals in this field are also known as securities analysts or financial analysts.

Investment analysts produce research and buy-sell recommendations for two distinct uses, depending on the employer. In a bank or brokerage, investment analysts generally produce recommendations for company agents who use the information to sell investments to individual clients and the public at large. These firms operate on the sell side of the market. On the buy-side of the market, which includes hedge funds, pension funds, and wealth management firms, analysts usually produce research and recommendations for the company’s investment managers who use the information to buy and sell securities directly.

Career Path

Many senior investment analysts began working in the field as junior analysts collecting data, creating and updating financial spreadsheets, and learning the ins-and-outs of the profession under the supervision of a senior member of the analytical team. Entry-level positions typically require a bachelor’s degree. After several years of working and learning in a junior position, many analysts head back to school to complete a graduate degree in preparation for further advancement in the field. A new hire who holds an appropriate master’s degree often begins in a senior analyst role immediately, regardless of whether they have worked before as a junior analyst.

Senior Analysts

Most senior analysts focus on a specific category of securities, developing a high level of expertise in the area over time. Work duties include updating research data in response to new developments, planning and conducting new research projects, communicating with contacts in the focus industry, and presenting research results to firm management, sales agents, or clients. Senior analysts usually oversee the work of one or more junior analysts.

A senior analyst with a record of high performance can become a portfolio manager in a buy-side firm overseeing all aspects of an investment portfolio. Portfolio managers set investment strategy and select the specific mix of securities in a portfolio based on the work of senior analysts. Portfolio management typically represents the end of the career path.

Educational Qualifications

An entry-level position in the field requires a bachelor’s degree. Relevant subjects include business disciplines with a quantitative component, such as finance, accounting or economics, and other subjects that provide training in analytical and quantitative skills, such as statistics, mathematics, physics, or engineering.

While a master’s degree is not generally a requirement for advancement into a senior analyst position, many firms seek out job candidates with relevant graduate degrees. Many advanced analyst positions and investment management positions require a master’s degree. Relevant graduate degrees include an MBA with a quantitative focus or a master’s degree in finance.

Other Qualifications

Investment analysts are generally required to obtain a license from the Financial Industry Regulatory Authority (FINRA), a national regulatory body that handles oversight of securities firms and brokers in the United States. To obtain an appropriate license, a candidate usually needs sponsorship from a qualifying employer. Consequently, the licensing process usually takes place after a candidate has been hired as an investment analyst.

The Chartered Financial Analyst (CFA) designation, awarded by the CFA Institute, is a professional certification available to analysts with bachelor’s degrees and at least four years of professional experience in the field. Most employers expect qualifying analysts to pursue and complete CFA certification. Many require CFA certification for continued advancement into more senior positions in the firm. Certification requires candidates to pass a series of three exams.