What Is a Research Analyst?

A research analyst is a professional who prepares investigative reports on securities or assets for in-house or client use. Other titles for this function include securities analyst, investment analyst, equity analyst, rating analyst, or simply "analyst."

The work conducted by a research analyst is in an effort to inquire into, examine, find, or revise facts, principles, and theories for internal use by a financial institution or an external financial client. The report an analyst prepares entails the examination of public securities records of companies or industries, and often concludes with a "buy," "sell," or "hold" recommendation.

If a research analyst is involved with an 澳洲幸运5开奖号码历史查询:investment bank or a securities firm controlled by a member organization of the 澳洲幸运5开奖号码历史查询:Financial Industryﷺ Re🍌gulatory Authority (FINRA), they may be required to register with a self-regulatory organization (SRO) and/or take certain exams.

The Basics of Being a Research Analyst

Research analysts are usually divided into two groups: "buy-side" and "sell-side" analysts. A buy-side (brokerage) research analyst is typically employed by an 澳洲幸运5开奖号码历史查询:asset management company and recommends securities for investment to the money managers of the fund that employs them. The research of a sell-side (investment firm) analyst tends to be sold to the buy-side. Sell-side research is also given to clients for free for consideration, in an attempt to win business, for 🐲example. Such research c🌠an be used to promote companies.

A buy-side analyst usually works for institutional investors ♑such as hedge funds, pension funds, or mutual funds. Buy-side research analysts are often considered more professional, academic, and reputable compared to the sell-side. Sell-side research jobs are often likened to marketing and sometimes pay higher salaries.

Research analysts can work at a variety of companies, such as at asset management companies, investment banks, insurance companies, hedge funds, pension funds, brokerages or any business that needs to crunch data to spot trends or decide on a valuation, make an investment decision, or forecast the outlook of a company or asset. According to Glassdoor, the average base salary for a research analyst is $101,000, ranging anywhere between $76,000 to $136,000.

Research Analyst Qualifications

Companies that employ research analysts sometimes require a master's degree in finance or a chartered financial analyst (CFA) designation on top of several regulatory hurdles. Research analysts might be required to take the 澳洲幸运5开奖号码历史查询:Series 86/87 exams if they are involved with a member organization.

Other required securities licenses often include the Series 7 general securities representative license and the 澳洲幸运5开奖号码历史查询:Series 63 uniform securities agent license. FINRA licenses are typically associated with the selling of specific securities as a firm’s registered representative. Investment analysts may also seek to obtain the Chartered Financial Analyst (CFA) certification.

Research analysts commonly use Excel for organizing data and performing basic statistical analysis. More advanced tasks may require programming languages like R or Python, which are useful for automating analysis, running 澳洲幸运5开奖号码历史查询:regressions, or visualizing data. R𒊎esearch analysts may also use SQL to extract and manage data from large databases.

Financial Analyst vs. Research Analyst

Financial firms in the United States do ꦫꩵnot really present a unified definition of either of these job titles. Some financial analysts are really just researchers who collect and organize market data, while others put together specific proposals for securities investments with large institutional clients. Similarly, some research analysts are glorified marketing specialists, while others apply socioeconomic or political insights and are probably better classified as management consultants.

It's possible to narrow the differences between research analysts and financial analysts. Generally speaking, financial analysts focus on analyzing investments and market performance. They rely on a 澳洲幸运5开꧟奖号码历史查询:fundamental understandin♑g of business valuation and economic principles to create reports and make recommendations; they are the behind-the-scenes experts. Research analysts occupy💎 a less prescriptive role than financial analysts. Instead of looking through the lens of broad economic principles, they focus more on mathematical models to produce objective answers about historical d🎃ata.

Financial analysts collect and analyze data but always within the context of a prior deductive understanding of how markets should function. Their thinking is systemic and, particularly at more senior levels, subjective. Research analysts tend to be operations-focused. Give a research analyst a series of inputs, and they can calculate the most efficient way to maximize output. If the research analyst works in the securities business, it's likely that recommendations may be made based on some predetermined criteria.

The Bottom Line

Research analysts are finance professionals who analyze securities data to make recommendations to their own firms or outside clients. They may be buy-side or sell-side analysts, which are distinguished by what types of companies they work for. Qualifications may include a master's degree in finance or certification as a chartered financial analyst. Sometimes they may be required to take certain tests for licensure.