Career Definition of an Equity Research Analyst
Equity research analysts need to have a comprehensive background in financial markets. They work under financial managers and ultimately provide them with recommendations about investment decisions. One part of their job involves gathering all the information that they need in order to develop a complete picture of businesses other options for investing money. They specifically focus on securities investments so they look at bonds, options and stocks. They need to consider the individual option as well as the market conditions surrounding that option so that they have a clear idea of how they expect developments in the global market to affect that investment.
Once they've gathered and assessed the information related to the investment they may produce reports to outline the relevant considerations and their recommendations. Equity research analysts meet with managers and explain their conclusions. It's common for them to specialize in a particular industry and continuously monitor conditions in that industry. Their insight can be used to influence the purchase or sale of securities investments.
|Educational Requirements||Bachelor's degree|
|Job Skills||Analytical skills, research skills, communication skills, decision-making skills, organizational skills|
|Mean Salary (2020)*||$94,398|
|Job Outlook (2018-2028)**||6% (financial analysts)|
Sources: *Glassdoor; **U.S. Bureau of Labor Statistics
The minimum educational requirement for equity research analysts is a bachelor's degree in engineering, business or another field that develops strong analytical skills. Experience in an entry-level role as an analyst is important so those planning on entering this field may want to take college programs that include internships if possible. Many employers prefer applicants who have a master's degree in finance. Those who are preparing for a career as an equity research analyst may also pursue Chartered Financial Analyst (CFA) certification.
Equity research analysts are constantly processing new information about markets and specific business sectors so they need to have strong research skills in order to ensure they stay up to date with all the latest developments. They must have exceptional analytical skills in order to be able to determine how different factors will affect investments. Communication skills are important because their work involves meeting with managers, and they need to be able to break down their recommendations clearly and efficiently. They also need to have decision-making skills because their ultimate objective is to make the right determination about whether or not to start or continue with a specific investment option.
Career Outlook and Salary
Equity research analysts are part of the U.S. Bureau of Labor Statistics (BLS) occupational listing for financial analysts. The BLS projects job growth rates over the ten-year period from 2018 to 2028. During this time it expects the average job growth rate for all occupations will be 5%, while the BLS forecasts job growth of 6% for financial analysts during this timeframe. Glassdoor indicated that in 2020 the mean annual income for equity research analysts was $94,398.
There are a number of careers in finance that rely on the same skills that equity research analysts use and share some similar duties so they may also be of interest to aspiring equity research analysts. The links listed here connect to information about some of these comparable occupations.