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Investment Analyst

Investment Analyst

Tell me about it
Investment analysts specialise in examining the performance of companies, market sectors and the economy. They then present their findings and recommendations to clients, giving them details about when to buy and sell their investments. Analysts' research must be accurate as even the smallest error can wipe thousands off an investment portfolio.

Investment analysts need a strong financial background, together with a detailed understanding of how the economy functions and of the impact that certain events can have on the value of a company. They tend to specialise in one sector, such as telecommunications, financial services, energy, retail or pharmaceuticals, and need to be aware of all the activities affecting their sector. These might include changes in market prices, changes in the value of currencies and company takeovers

Using spreadsheets and sophisticated financial modelling tools, analysts try to forecast how prices in shares and bonds will move and pass this information on to clients.

Investment analysts usually work on the 'sell side' or the 'buy side' of the business. The 'sell side' involves advising stockbrokers on what to recommend to their clients in terms of buying and selling; the 'buy side' involves working for investment management companies, pension funds and insurance companies, helping them decide on how to generate the best return on their investments.

Entry level
Many leading investment firms recruit trainees straight from university, usually requiring a first or upper second class degree. Generally, companies hiring will accept any degree subject, although specialism in mathematics, politics or economics would be advantageous. Foreign languages are useful if you want to work abroad.

Some companies might ask you to track an imaginary portfolio over a period of time, and many would want you to take aptitude tests and make a presentation to a panel as part of their selection process. It also helps if you can demonstrate a solid understanding of the workings of the global economy. Pre-entry experience can be highly beneficial, such as an internship or vacation work in a financial institution

Making the grade
Many employers give intensive on-the-job training for new entrants, giving you a complete business overview. This can last up to nine months, and you would train with a senior analyst or team of analysts. Most firms provide the training and pay for examinations, but expect to put in a lot of study time outside office hours.
You would normally be expected - after at least six months' experience - to obtain the Investment Management Certificate (IMC), which is assessed by the CFA Society of the UK.  The syllabus covers financial regulations, investment in equities, commodities, currencies, accountancy, portfolio management, economics and taxation (including capital gains tax). The IMC is a requirement of the Financial Services Authority (FSA) but it is also in your employer's interest to encourage you to develop your skills and knowledge. You may decide to continue your training to obtain the Chartered Financial Analyst (CFA) qualification.

As your career progresses, you would take further specialist qualifications. Promotion depends on performance – if you are successful, you could well be head hunted by a rival firm.

Personal qualities
As an investment analyst, you would need to be very well informed about the economic climate and global politics; you would have to be self confident and a good communicator, and you must be able to work under severe pressure.

You should be able to think on your feet, comfortable with numbers and have excellent IT skills.

Looking ahead
This is a highly competitive profession but the growing focus on investments means that there are good opportunities for qualified and experienced investment analysts. London is the leading investment centre in the UK and most jobs are based there. However, there are jobs in other UK cities, including Manchester, Glasgow, Birmingham, Edinburgh and Leeds. With a greater focus on the global markets, there are opportunities to work in financial centres across the world, particularly in Europe, Asia and America.

You might work for a global investment management company, a specialist firm concentrating on one market or product or a large banking institution.

Alternative suggestions
Other possibilities might include accountant, actuary, banker, economist, financial adviser, insurance underwriter or stockbroker.

Take-home pay
Typical starting salaries for investment analysts in London range from £30,000 to £40,000, plus generous bonuses. Earnings would be lower in other parts of the UK. After five to eight years, salaries might rise to £65,000 to £100,000 plus bonuses. Typical salaries at senior levels can be £120,000 to £150,000 with bonuses of up to 200% of salary.

Effects
Most analysts are at their desks before 8am, checking the overnight news and reading financial newspapers. There is no set pattern of working hours, and you might not finish work before 7.30pm, perhaps later during busy periods. You might also have to work at weekends.

Although this is a stressful and demanding job, the pay is outstanding and there are usually excellent benefits to make up for the long hours.

Sources of information
CFA Society of the UK: https://secure.cfauk.org 
Financial Services Authority: www.fsa.gov.uk
Financial Skills Partnership: www.financialskillspartnership.org.uk
London Stock Exchange: www.londonstockexchange.com
Chartered Institute for Securities and Investment: www.cisi.org    
Association for Financial Markets in Europe: www.afme.eu 






 

 

 

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