Investment analyst


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Investment analyst

  1. 1. OCCUPATIONAL PROFILE Investment analyst Job Description An investment analyst undertakes research to provide ideas and information to fund managers. The information they provide enables the fund manager to make decisions relating to the investment portfolios that they manage. Some analysts work for investment management companies, providing information to in-house fund managers; others may work for stockbrokers and investment banks where their research assists clients of the company (usually fund managers). Analysts and fund managers working in the UK are likely to research investments globally. Main UK investors (apart from individuals) are: • pension funds; • life assurance companies; • unit trusts; • investment trusts; • banks and major companies (known as institutional investors). Typical Work Activities Investment analysts can cover a broad range of activities and disciplines, which can vary according to the nature of the employer. Essentially, they need to develop an understanding of financial information, such as: • company accounts; • statistics; • economics; • political events. They must also develop expertise in interpreting that information and the implications for investment decisions. An analyst may have a set of companies to research and develop in-depth knowledge of, in order to make informed recommendations to fund managers. These are usually in a specific industrial sector, such as retail or utilities, or a geographical area, such as Europe or the Far East. Typical work activities can include: • analysing financial information relating to the companies they are researching, e.g. a new set of accounts, profit and loss and cash flow statements; • conducting regular meetings with the management of the companies, sometimes at their premises, e.g. to discuss issues arising from the accounts; • keeping up to date with market developments and all that can affect the markets, e.g. movements in the economies of relevant countries, political events, and even the weather; • monitoring the financial news using specialist media sources; • producing summaries of their research for fund managers, and meeting with them regularly; • maintaining liaison with the management of companies and with fund managers, often by phone. Work Conditions • Typical starting salary for entry-level graduate positions: £35,000 in London, with bonuses of 20% - 100% possible in the first three years, less in other parts of the UK (salary data collected June 07). • After five to eight years, salaries rise to £65,000 - £100,000, with bonuses of 40% - 100% possible. Typical salaries at senior levels can be £110,000 - £130,000, with bonuses of 50% - 100% (salary data collected June 07). • Salaries vary according to the nature and size of the company and geographical location. Salaries are higher with investment banks. • Starting packages with the bigger companies include annual bonuses, gym membership, life assurance, a pension scheme and private health care. • Working hours can be long, e.g. ten or 11 hour days. Weekend working is not usual in sectors directly affected by trading, but can be regular in other sectors, such as corporate finance. • The work is primarily office-based but visits to companies to meet with management is common. • The majority of openings are in London, but companies are also based in other UK cities, such as Edinburgh. Few jobs are found outside major cities. • Business dress is usual, though some firms have adopted a more casual dress code. • Meeting deadlines and working under pressure for long hours can be stressful. • Travel may be required to visit the management of companies, which is usually UK-based, but overseas travel is a possibility. Larger firms offer opportunities to work abroad. This Occupational Profile forms part of Prospects Planner Page 1 of 4
  2. 2. Investment analyst Entry Requirements Although this area of work is open to all graduates, a degree in the following subjects may increase your chances: • mathematics; • statistics; • economics; • accounting. Most employers seek a 2:1 or first. Although it may not be specified in their entry requirements, most will also require a minimum of 300 UCAS points at A-level (or equivalent). Entry with an HND is not common. Similarly, entry without a degree or HND is unusual. Postgraduate qualifications are not necessary, although some firms may favour applicants with an MBA. Pre-entry experience is not essential but can be highly beneficial, for example work experience or vacation work in a financial institution or specific industry. Potential candidates will need to show evidence of the following: • the ability to work under pressure and to deadlines, e.g. to produce reports; • numeracy and analytical skills; • good communication skills; • self-confidence, drive and tenacity; • an interest in current affairs, and an appreciation of their impact on the market. Language skills can be useful. Computer literacy is essential, but can be acquired during training. Participation in relevant student societies (e.g. investment, economics, business) and evidence of an interest in the market, such as reading the financial press or running a shadow portfolio of securities, will demonstrate your interest in investment and impress employers. Most major investment banks use summer internships to pre-select graduate recruits. Competition for these is often more intense than for graduate vacancies, as there are fewer placements. London-based companies recruit across Europe and competition is keen. Closing dates for entry to investment banks, stockbrokers and specialist fund management companies (also known as investment management and asset management) can be as early as the October of your final year, and rarely later than the following January. Some companies, particularly the big investment banks, run structured graduate training programmes and recruit to them annually. Others may offer trainee positions as and when they are required. It is illegal for employers to discriminate against candidates on the grounds of age, gender, race, disability, sexual orientation or religious faith. For more information on equality and diversity in the job market and how to handle discrimination see the AGCAS publication Handling Discrimination ( Training Training will vary according to the nature and, particularly, the size of the company. Larger companies are likely to offer a structured training programme for graduate trainees. On-the-job training will be a significant feature. A trainee may be assigned to a specific team or an individual (e.g. senior analyst). Analysts in front-office roles, such as advising and dealing in securities, derivatives and investments, take Securities and Investment Institute (SII) ( qualifications. These include regulatory exams, which legally entitle analysts to give financial advice. The Investment Management Certificate (IMC) of the UK Society of Investment Professionals (UKSIP) (, which covers the regulations that investment companies and their staff must adhere to in the UK, is a minimum requirement for those working in the investment management field. Graduates joining investment management companies are, therefore, likely to take the certificate during their training. Some analysts may progress to the Chartered Financial Analyst (CFA) qualification. The CFA qualification originates from the US and has growing recognition globally. It is administered by the Chartered Financial Analyst (CFA) Institute ( in the UK. Study for the CFA can take around three years. Employers in the investment management area will tend to assist employees with their studies, offering financial support and time off for study and examinations. The IMC is a requirement by the Financial Services Authority (FSA) (, but it is also in the employer's interest to encourage staff to develop their skills and knowledge. Page 2 of 4 See also AGCAS Sector Briefings for an overview of job sectors -
  3. 3. Investment analyst Career Development One logical next step for an investment analyst would be to become a fund manager. However, this would only be after developing considerable experience at the analyst level. The analyst covers much of the groundwork for the fund manager, researching companies and making recommendations based on thorough knowledge of their companies, the markets and movements in the UK economy (and others), but it is the fund manager who makes the investment decision and carries the responsibility for that decision. In the investment banking divisions of banks, new graduates tend to spend their first three years as analysts, after which the bank decides whether or not to renew their contracts and consider them for promotion (this usually depends on whether they have displayed leadership potential, sophisticated judgement and an understanding of client motivation). Success means promotion to associate level. Typically, associates are responsible for a team of analysts to whom they allocate work. After three more years, the next rung of the ladder is vice president. Other possible routes include: • progressing into management, supervising others and/or taking on responsibility for an investment area or type of fund; • continuing to develop expertise in a chosen field and becoming recognised for knowledge, expertise and results; • becoming a manager in charge of investment in specific organisations, e.g. insurance companies or in-house pension funds. Progression within a company will depend upon its size. In a small investment firm (sometimes known as boutiques), opportunities to develop may not always arise. An analyst may choose to apply to other firms to progress or develop new skills. Relocation to another country, or to another major UK city, may be required to progress within a company or to a new role with a new employer. Typical Employers Typical employers include: • investment management companies, providing information to in-house fund managers; • stockbrokers and investment banks, where their research assists clients of their company, usually fund managers, but these can also be company executives and directors; • institutional investors, such as large charities, pension funds and life assurance companies. The nature of the employer will determine the range of activities performed. For example, in larger firms, investment analysts may work as part of a team producing a summary of research, or actually be involved in research, project and client management. In smaller firms, one analyst may produce a report on their own. More than most businesses, investment banking offers graduates the opportunity to spend some time abroad, either through secondments, rotations or assignments. These opportunities are more likely with larger firms, such as the big investment banks. Popular destinations are Hong Kong, New York and Tokyo. Sources of Vacancies • Financial Times (; • Michael Page International (; • Prospects Graduate (; • Prospects Finalist (; • Hobsons GET Finance Guide. Specialist recruitment agencies can be helpful, e.g. eFinancialCareers ( Direct approaches to companies may also be worth a try. The Association of Private Client Investment Managers and Stockbrokers (APCIMS) ( has a list of member companies on its website, as does the London Investment Banking Association (LIBA) ( When looking at vacancies, be aware that job titles can vary according to the nature of the employer. Related Occupations • Banker • Financial risk analyst • Investment banker (corporate finance) • Trader (equities, FX, futures, bonds) Find comprehensive careers information on and in your HE careers service Page 3 of 4
  4. 4. Investment analyst Information Sources Bibliography AGCAS and Graduate Prospects products are available from higher education careers services. AGCAS Publications Accountancy and Business Services Sector, AGCAS Sector Briefing Banking, Investment and Insurance Sector, AGCAS Sector Briefing Handling Discrimination, AGCAS Information Booklet Options with Accountancy and Finance, AGCAS Options Series Options with Economics, AGCAS Options Series Options with Mathematics, AGCAS Options Series Graduate Prospects Publications Prospects Finalist Prospects Graduate Other Publications Careers in Financial Markets, eFinancialCareers Ltd, Annual Financial Times, Financial Times Group, Daily Hobsons GET Finance Guide, Hobsons Plc (, Annual Inside Careers: Banking, Securities and Investments, Inside Careers (, Annual Professional Investor, UK Society of Investment Professionals (UKSIP), 10 per annum TARGETjobs City and Finance, GTI Specialist Publishers (, Annual Websites eFinancialCareers, Michael Page International, Addresses Association of Private Client Investment Managers and Stockbrokers (APCIMS), 114 Middlesex Street, London E1 7JH Tel: 020 7247 7080 URL: Chartered Financial Analyst (CFA) Institute, 10th Floor, One Canada Square, Canary Wharf, London E14 5AB Tel: 020 7531 0751 URL: Financial Services Authority (FSA), 25 The North Colonnade, Canary Wharf, London E14 5HS Tel: 020 7066 1000 URL: London Investment Banking Association (LIBA), 6 Frederick's Place, London EC2R 8BT Tel: 020 7796 3606 URL: Securities and Investment Institute (SII), 8 Eastcheap, London EC3M 1AE Tel: +44 (0) 20 7645 0600 URL: UK Society of Investment Professionals (UKSIP), 4th Floor, 90 Basinghall Street, London EC2V 5AY Tel: 020 7796 3000 URL: © Content copyright of or licensed to AGCAS ( Written by Paul F Brown, University of St Andrews, 23/07/2007 The work of writers, editors and other contributors is gratefully acknowledged - full details on To view the terms and conditions for the material provided in this publication, please see Page 4 of 4 Visit to see case studies of graduates in this role