Comparing Financial Analysts to Investment Bankers
Financial analysts and investment bankers both assist clients with investing and often work more than the traditional forty-hour work week. Both of these positions are suitable for people who like to work in challenging, fast-paced environments. The primary differences between these two financial services jobs are illustrated below.
|Job Title||Education Requirements||Median Salary (2016)*||Job Growth (2014-2024)*|
|Financial Analyst||Bachelor's degree||$81,760||12%|
|Investment Banker||Bachelor's degree||$67,310 (for all securities, commodities, and financial services sales agents)||10% (for all securities, commodities, and financial services sales agents)|
Source: *U.S. Bureau of Labor Statistics
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Responsibilities of Financial Analysts vs. Investment Bankers
Both of these careers involve cultivating and maintaining a client portfolio, but a financial analyst works with their clients on the best investment options for their needs and budget. In contrast, an investment banker aims to provide individuals and businesses seeking funding with investors for their ventures.
A financial analyst advises individual and corporate clients on investment options. Financial analysts provide their clients with sound financial advice by looking at current and past financial data and market trends. A buy-side analyst works with companies, such as hedge funds or insurance companies, to invest their money, while a sell-side analyst works with financial services sales agents. Financial analysts can work for a bank, insurance company, or securities firms. Financial analysts need a bachelor's degree, and many pursue a master's degree for advanced positions.
Job responsibilities of a financial analyst include:
- Investigating corporate financial reports to ascertain a company's worth
- Creating reports that outline their recommendations for clients
- Collaborating with a company's management team to understand their needs
- Building their client lists around a certain geographic location, line of business, or product
Investment bankers specialize in establishing relationships between clients in need of investors and those who wish to invest in them. An investment banker works for a financial institution and is retained by clients for their financial guidance. The formal term for this process is underwriting, as clients utilize financial institutions to issue stocks, which are then sold to their investors. Investment bankers will need a bachelor's degree, with many in the field pursuing a master's in business administration as they advance in their career. Once employed, investment bankers must register with the Financial Industry Regulatory Authority (FINRA) as representatives of their employer, which involves successful completion of several exams.
Job responsibilities of an investment banker include:
- Connecting companies for initial public offerings, mergers, and acquisitions
- Examining companies to determine their financial worth and if they are eligible to offer public stock
- Serving as an intermediary when two companies merge or when one company acquires another
- Researching current financial trends
If you would like to become a financial analyst, a personal financial advisor job may also interest you, as both careers involve providing clients with investment guidance. Those interested in a position as an investment banker may want to consider becoming an insurance sales agent, as both jobs have a sales aspect and focus on building relationships with clients.