How To Become a Quantitative Analyst With Salaries

Updated 26 April 2023

Quantitative analysts are responsible for several business functions that contribute to a business' growth and success. These professionals use technical abilities and good communication to monitor and evaluate financial applications. To perform this role, quantitative analysts need to obtain a certain level of education and experience. In this article, we discuss what a quantitative analyst is, what their responsibilities are and how to become a quantitative analyst.

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How to become a quantitative analyst

There is a high demand for financial quantitative analysts in the business sector, as they seek to prevent risk and offer investors better opportunities, so knowing how to become a quantitative analyst is beneficial. This is something that has become increasingly important in a world that thrives on digital intelligence and market research. If you want to become a quantitative analyst, there are several career paths to consider. Follow these six steps to start your journey to becoming a quantitative analyst:

1. Get an undergraduate degree

An undergraduate degree is the minimum education requirement for quantitative analysts. It's important that you choose a degree in a related field:

  • economics

  • data analytics

  • engineering

  • computer science

  • statistics

  • theoretical physics

  • mathematics

These courses develop your skill set and introduce you to crucial concepts, such as algorithmic functions and financial data. Whilst conducting your studies, you can also apply for internship roles or look for opportunities in the university. This means that you can start to build your CV and apply your newly developed skills to a real-world setting.

2. Identify what skills you need

You learn a lot of your skills through education and experience. However, it's important that you identify which skills you need to work on most and how you can demonstrate them in your CV or cover letter to employers. Skills that are important for quantitative analysts are:

  • Communication skills: As a quantitative analyst, you collaborate with a wide range of professionals, senior management members and company shareholders to deliver assessments and information. You must present complex data through verbal or written means in a clear and simple manner.

  • Problem-solving skills: Quantitative analysts pre-empt problems and explore new ways to categorise or overcome them. Sometimes this requires them to break from conventional statistical models and explore new analysis paths for better insights.

  • Technical skills: Quantitative analysts need to understand technology to produce algorithms, informational displays and computer models which they consult on a daily basis. This means you need to understand statistical modelling techniques, analyst trends and computer software applications.

Read more: Problem-Solving Skills: Definitions and Examples

3. Gain work experience

An entry-level quantitative analyst position allows you to put your educational training into practice and understand where your strengths lie. Look for an internship or work shadow opportunities so you can learn more about a quantitative analyst routine and daily duties. There are several financial institutions you can apply to, for example investment firms, brokerage firms, banks and hedge funds.

Related: How to Write a Financial Analyst Cover Letter (With Template and Example)

4. Consider your speciality

This is a pivotal stage in a prospective analyst's career as it determines which path they take next. Since quantitative analysis is a broad field that encompasses many duties, many professionals choose to specialise in a certain area. What you choose is largely dependent on your passions, workplace preferences and your strengths. Some subfields include statistical arbitrage, electronic market-making and derivative pricing. Choosing a speciality also ensures that you can better develop your skills through advanced training and education specific to the job role.

5. Complete your master's degree

Once you choose your speciality, you may consider postgraduate study. This isn't a set requirement for quantitative analysts, but since it's a highly competitive field, it can give you an advantage over other candidates and boost your earning potential. A master's degree also allows you to specialise in certain areas of quantitative analytics, such as portfolio and wealth management or stock trading. Some quantitative analysts choose to develop their expertise further through a Ph.D. This achievement shows employers that you can work independently and conduct research projects, both of which are necessary for a quantitative analyst position.

6. Advance your career

Some companies require quantitative analysts to have professional licenses before joining their corporation. This is because professional accreditations make you more susceptible to job advancements and demonstrate your employability. The Chartered Financial Analyst (CFA) Institute offers a Certificate in Quantitative Finance which is highly valued by employers. It comprises three exams and an independent study program, with each assessment taking approximately six months to complete. You need four years of professional work experience in financial decision making to take this accreditation.

In your career as a quantitative analyst, you can continue to grow through various training courses. The Certificate in Quantitative Finance (CQF) is a part-time program for individuals who want to enhance their financial engineering skills. It focuses on risk management, quantitative trading and model validation and encourages you to channel these skills into real-world applications. By advancing your career through training courses, you're opening yourself up to new job sectors and opportunities. For example, quantitative analysts can progress into the following roles:

  • quantitative developer

  • financial analyst

  • financial engineer

  • quantitative trader

  • academic

  • actuary

  • investment banking analyst

Read more: 9 Essential Business Analyst Skills

What is a quantitative analyst?

A quantitative analyst is a financial analyst who constructs computer models that propel business insights. This means that businesses can better understand what financial activities are working and which ones to reconsider. These computer models use mathematics and statistical analysis techniques so that financial organisations can identify investment risks, make decisions about pricing and pursue new profitable opportunities. This leads to better investment returns and business growth.

As a quantitative analyst, you usually work in investment banking and stock brokerages or other elements of the business sector. This means that you'd work in an office environment and operate during traditional business hours. There are specialist quantitative analysts who focus their expertise in one field, such as derivative pricing, statistical arbitrage, electronic market-making or algorithmic trading. However, others choose to stick to quantitative investment management exclusively.

What does a quantitative analyst do?

There are several tasks that quantitative analysts may perform and their duties differ according to where they work and what financial project they're working on. For example, quantitative analyst responsibilities vary in a hedge-fund and investment bank setting and whether you're analysing commodities or risk factors. Whatever their daily functions are, quantitative analysts spend most of their time on computers. Here are some general responsibilities of a quantitative analyst:

  • Collaborate with computer engineers, mathematicians, physicists and other industry personnel to develop financial strategies.

  • Use scientific methods to analyse finances and develop alternative approaches to better document and display scientific data.

  • Implement trading strategies that maximise profits.

  • Perform daily coding tasks and statistical analyses, such as risk modelling and loan pricing.

  • Support management decisions regarding pricing analysis and investment strategies.

  • Research current market trends to make sound and informed decisions which are based on up to date information and financial models.

  • Address financial risk by managing and assessing problems.

  • Implement complex quantitative models and analytical software/tools to perform valuable business insights.

  • Create statistical analysis specifications for software developers.

  • Communicate with shareholders and senior management.

  • Compile visual data based on financial analysis and risk assessments to forecast future problems.

  • Consult with financial professionals on market dynamics and trading system performance.

  • Use complex statistical modelling to help companies who are buying and selling.

  • Test new statistical models and analytical programs.

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How much do quantitative analysts make?

The average salary for a quantitative analyst in the United Kingdom is £76,919 per year. However, your education and experience level can impact how much you earn. This is because quantitative risk analysts who have extensive knowledge and experience can usually bring more to the job role and differ from entry-level analysts in their capabilities.

If you work as an analyst in quantitative hedge funds in London or other specialised areas, you're likely to have a higher earning potential since your role differs from a general quantitative analyst. If you're a quantitative analyst looking to increase your earning potential, consider your location. There is a high demand for quantitative analysts in specific areas across the United Kingdom, which means that employers offer higher salaries. For example, quantitative analysts in London earn approximately £80,311 per year.

Salary figures reflect data listed on Indeed Salaries at time of writing. Salaries may vary depending on hiring organisation and a candidate's experience, academic background and location.

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