What does an investment analyst do? (With skills and salary)
By Indeed Editorial Team
Updated 19 January 2023
Published 12 May 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Investment analysis is a vital skill used in the finance and construction industries. As an investment analyst, you're required to research economic forecasts and business performance to influence investment decisions in the future. Understanding what an investment analyst does can help you develop the skills to enter the finance sector. In this article, we discuss what an investment analyst does, their responsibilities, the skills the role requires and their salary expectations.
What does an investment analyst do?
Knowing the answer to 'What does an investment analyst do?' can help you determine if it's the right career for you. An investment analyst makes investment recommendations based on analysing financial data from around the world. Analysts typically research company information and economic forecasts which are then sent to investment professionals such as fund managers, traders or investment agents.
It's important for investment analysts to provide detailed information so that investors can create a balanced and diverse portfolio. Analysis often includes business environments, market trends, the performance of major companies and growth potential in the future. The nature of the role means investment analysts often work in the financial sector and have backgrounds or qualifications in business, accounting, statistics or finance.
Where do investment analysts usually work?
Investment analysts can work for many different employers that need financial forecasting. Some analysts work in-house for investment managers where their information directly helps fund managers, while others may work for investment banks or stockbrokers that need detailed research to make client recommendations. Investment analysts in the UK require an understanding of global investment markets and may work for institutions such as:
investment banks or brokers
investment management companies
wealth management companies
banks or larger corporations
private wealthy individuals
What are the responsibilities of an investment analyst?
The role of an investment analyst can change depending on your employer or overarching objectives. Fundamentally, investment analysts provide insights into economic forecasts and highlight potential investment opportunities. This includes reporting on external factors that could affect an investment in the future.
As an investment analyst, you also require an understanding of complex financial data including company accounts, forecasting models and economic predictions. Investment analysts examine and communicate a broad range of data from different sources, plus the impact that an investment could have over the long term, which requires specific skills. You also need an understanding of how to report on specific locations or sectors. With such a large range of potential data to analyse, you may find yourself researching individual industries such as real estate, utilities or retail alongside specific global markets.
Typical duties on an investment analyst
The typical duties of an investment analyst include:
examining the position of a company by analysing profit and loss statements, cash flow and balance sheets plus wider operational performance
researching market data and economic predictions to maintain an element of due diligence
communicating findings to investment professionals with a focus on risk management and return-on-investment potential
creating detailed research reports, projections and financial modelling
monitoring external factors that could impact investments including political events or even natural disasters
meeting with clients to provide recommendations in a concise, clear manner
The day-to-day tasks of an investment analyst depend on your employer. Larger institutions typically have entire teams dedicated to investment analysis, while smaller companies may rely on you to create your own reports and research in its entirety.
What is the salary of an investment analyst?
The national average salary of an investment analyst is £43,857 per year, although this can differ depending on your location and employer. Salaries vary from city to city, with the higher paying companies typically located in London. Salaries are usually the highest in investment banks, many of which are in the capital.
There's the potential for bonuses as an investment analyst, which impacts your overall salary. Investment analysts with larger companies may find starting packages that include annual bonuses, special benefits and a pension scheme. Depending on the organisation, you may find further support for training and qualification or flexible benefit packages.
What to expect as an investment analyst?
Investment analysts primarily work in an office environment as part of a larger team, although it's common to travel to consult with different companies. Working as a team of analysts is common and there's usually a lead analyst who acts in a supervisor role. You may see long shifts, including weekend working, as an investment analyst because the role can require working alongside global markets. Deadlines and high-pressure situations are common in this industry, as trading issues are usually tied to specific times and need resolving quickly.
The majority of investment analyst roles are in London, especially within investment banks. If you're working for an investment management company or stockbroker, it's possible to find roles in other metropolitan areas. Depending on your employer, you may travel overseas, especially if you're working with larger, global firms with several offices.
What skills do you require as an investment analyst?
Technical skills and competency are one of the most important things to demonstrate if you're applying for the role of investment analyst. Many companies require you to have a deep understanding of statistical analysis and the software to communicate your findings effectively. The key skills of an investment analyst include:
ability to evaluate and analyse complex data and research effectively
strong understanding of quantitative skills, numerical working and forecasting
exceptional communication skills, particularly in explaining technical concepts to a less knowledgeable audience
initiative and flexibility with self-confidence and a natural drive for research
interest in current affairs and how they could impact investment markets around the world
investment knowledge around different markets, an understanding of investor needs or experience in running a portfolio
interest in expanding your own technical learning
language skills and an understanding of global markets
ability to work as part of a wider team
computer literacy, particularly in reporting and analysis software
While some employers provide IT training around specific platforms, having a fundamental understanding of Excel or similar software is vital. Analysts typically provide financial modelling or economic projections which they complete using Excel.
What qualifications do you require as an investment analyst?
Many organisations require a fundamental understanding of core subjects such as mathematics and a degree in one of the following fields:
mathematics or statistics
Having a good understanding of fields such as investment, economic forecasting or financial modelling can help your overall career performance. Knowledge of other degree subjects can also help you build skills that apply to an investment analyst role. For example, a degree in real estate or business management is relevant for those working in the property investment sector.
What career progression can you expect as an investment analyst?
If you're starting your career as a graduate investment analyst, you can expect to spend your first years at a business performing a range of analyses and building your experience. At this point, you can consider where you want to progress. You could consider the following options:
Some investment analysts aim to continue their careers as lead analysts. This role has plenty of flexibility and could involve running a wider team at a larger company or being an individual analyst for a smaller company. Many lead analysts specialise in one sector or one location and aim to become the authority within that market.
There's the option of progressing into a wider management role as an investment analyst. This typically involves supervising a team of analysts, including a lead analyst, and becoming accountable for an investment area or type of fund. Investment management is ideal for those who want to focus on managing people and investment vehicles rather than day-to-day analysis.
Specialist analysis and consultation
Investment analysts that don't move into management typically focus on building expertise in an individual sector. This helps them become recognised as a leader in their field, known for their specialist knowledge and results. Investment analysts on this career path usually become consultants that support a range of companies within their sector.
The role of an investment analyst can involve communicating directly with investor clients. Some analysts can progress through their careers by working closely with private clients or investment institutions and providing recommendations. This type of role requires a deep understanding of global markets and the impact that external factors can have on an investment.
Is career progression possible?
Career progression within a company depends on its size. Larger companies can often provide more opportunities to progress than smaller companies. This means that analysts may move to a different firm for progression. The nature of the role means it's not always possible to transfer between departments within a single company. If an individual is a specialist in their sector, they often have many more opportunities available to them with competitor businesses or as a consultant.
Salary figures reflect data listed on Indeed Salaries at the time of writing. Salaries may vary depending on the hiring organisation and a candidate's experience, academic background and location.
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