Research analysts play an essential role in the world of banking, brokerage, and finance. They help investors make informed decisions by analyzing data and information to identify trends and patterns, and also offer insights that can guide strategy and asset allocation. In this blog, we will explore the duties and responsibilities of research analysts, their skills and qualifications, as well as the career paths available in the financial services industry.
Duties and Responsibilities of a Research Analyst
Research analysts are responsible for collecting data, and then using that information to provide insights that can inform investment decisions. Some of the key duties and responsibilities of a research analyst include:
- Collecting Data: Research analysts gather data from a variety of sources, including market research reports, industry publications, financial reports, SEC filings, and other public records. In addition to using quantitative data, research analysts will also correspond directly with corporate executives to clarify information and gain additional insights. The analysts use data and executive commentary to identify trends, patterns, and insights that can help inform investment recommendations, risk management, market research, and strategic decision-making.
- Analyzing Data: Research analysts analyze data using statistical techniques, fundamental analysis, financial models, data visualization applications, and their own expertise to identify key findings that can be used to inform investment decisions.
- Developing Reports: Research analysts create reports and presentations that summarize their findings and recommendations. They present their findings to both institutional and individual investors in a clear and concise manner that can be easily understood.
- Presenting Findings: Research analysts often present their findings to institutional clients and other stakeholders in live-stream meetings, reports, and conferences. They explain and defend their methodology, results, and recommendations, and answer any questions that may arise regarding their findings.
- Maintaining Data: Research analysts are responsible for maintaining proprietary databases and financial models based on the data collected and their analysis. They ensure that the data is accurate, up-to-date, and accessible to customers and members of their organization.
Skills and Qualifications of a Research Analyst
Research analysts need a combination of technical and analytical skills, as well as strong communication and interpersonal skills. Listed below are some of the key skills and abilities needed to be a successful research analyst:
- Analytical Skills: Research analysts must have strong analytical skills to be able to interpret quantitative and qualitative data. A research analyst is a professional who specializes in analyzing data and information to provide investment insights and recommendations to customers or organizations. Research analysts cover various industries such as finance, healthcare, retail, and technology. They use numerous research techniques to gather and analyze data, including surveys, interviews, consumer trends, and statistical analysis.
- Provide Clear Information to Clients: The primary responsibility of a research analyst is to help clients or organizations make investment decisions based on data-driven insights. They collect, analyze, and interpret data to identify trends, patterns, and opportunities that can help their clients make informed decisions. They also use their expertise to evaluate the effectiveness of existing investment strategies, identify areas for improvement, and recommend asset allocation techniques to improve investment returns.
- Analyze Data: In the finance industry, research analysts are responsible for analyzing financial data to provide investment recommendations to their clients. They analyze financial statements, economic trends, and industry reports to evaluate the financial health of companies and assess their potential for future growth. They use this information to make investment recommendations to their clients so that the clients can make informed decisions about their investment portfolios. Research analysts who work at brokerage firms are required to register with FINRA and pass their Securities Industry Essentials (SIE), Series 86, and Series 87 Examinations. In fact, many will go on to obtain a professional designation, such as the Certificated Financial Advisor (CFA). In finance, becoming a research analyst typically requires a bachelor’s degree in finance, economics, mathematics, or another related field.
- Conduct Market Research: In order to predict a company’s financial performance and ultimately the value of a company, research analysts conduct market research to identify customer preferences and consumer trends.
Research analysts can focus on a wide range of industries and sectors. In addition to working at financial institutions, research analysts can also find work as market research analysts, operations research analysts, and financial analysts at non-financial companies.
Let’s review some potential career paths:
- Financial services: Research analysts in the finance industry help financial institutions and investors make informed investment decisions by analyzing financial data and market trends.
- Market research: Market research analysts gather and analyze data on consumer preferences and market trends to help companies develop products and marketing strategies.
- Healthcare: Research analysts in healthcare focus on analyzing clinical data to provide healthcare providers and policymakers with best practices and strategies.
- Technology: Technology research analysts analyze technology trends and data to help companies develop innovative products and stay ahead of the competition.
- Government: Government research analysts work for government agencies and conduct research on a variety of topics, such as public policy, economic trends, and social issues.
- Consulting: Research analysts can work for consulting firms by analyzing data and providing insights to clients so that they’re able to make data-driven decisions.
- Non-profits: Non-profit research analysts analyze data to help non-profits understand their impact, improve their programs, and secure funding.
Research Analysts in Finance: The Role Day to Day
Being a research analyst in the finance industry can be challenging. The analysts work under tight deadlines, especially during earnings season, and often juggle the needs of multiple clients. Being able to work independently and collaboratively using technology has become an important capability for people in this role. They also need to pay attention to detail and have strong communication and organization skills. The numerous career path opportunities for research analysts in the finance industry range from portfolio or asset management to corporate finance or venture capital.
If you’re considering a career as a research analyst in finance, it’s important to select a training provider that offers a comprehensive range of study courses to help you pass all of your qualifying exams and stay compliant with continuing education requirements. Having a single source for all of your exam preparation needs will simplify your journey from the SIE to CFA. Look to Colibri’s family of training companies for your exam preparation needs.
