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What Is a Research Analyst?
Let me explain what a research analyst does. I'm talking about a professional who prepares investigative reports on securities or assets for in-house or client use. You might hear other titles like securities analyst, investment analyst, equity analyst, rating analyst, or just 'analyst.'
The work I do as a research analyst involves inquiring into, examining, finding, or revising facts, principles, and theories for internal use by a financial institution or an external financial client. The reports I prepare examine public securities records of companies or industries, and they often end with a 'buy,' 'sell,' or 'hold' recommendation.
If you're involved with an investment bank or a securities firm controlled by a member organization of the Financial Industry Regulatory Authority (FINRA), you may need to register with a self-regulatory organization (SRO) and take certain exams.
Key Takeaways
Here's what you need to know: A research analyst prepares investigative reports on securities or assets for in-house or client use. These reports examine public securities records of individual companies or industries and often include recommendations to buy, sell, or hold. The main differences between buy-side and sell-side analysts are the type of firm that employs them and the people to whom they make recommendations.
The Basics of Being a Research Analyst
Research analysts are usually divided into two groups: buy-side and sell-side. As a buy-side analyst, I typically work for an asset management company and recommend securities for investment to the money managers of the fund that employs me. The research from a sell-side analyst, on the other hand, tends to be sold to the buy-side. Sell-side research is also given to clients for free sometimes, in an attempt to win business, and it can be used to promote companies.
If you're a buy-side analyst, you usually work for institutional investors like hedge funds, pension funds, or mutual funds. Buy-side analysts are often seen as more professional, academic, and reputable compared to sell-side. Sell-side jobs are sometimes compared to marketing and can pay higher salaries.
Buy-side analysts determine how promising an investment seems and how well it fits the fund's investment strategy. Sell-side analysts issue recommendations like 'strong buy,' 'outperform,' 'neutral,' or 'sell.'
You can find research analysts at various companies, such as asset management firms, investment banks, insurance companies, hedge funds, pension funds, brokerages, or any business that needs to crunch data to spot trends, decide on a valuation, make an investment decision, or forecast the outlook of a company or asset. According to Glassdoor, the average base salary for a research analyst is $101,000, ranging from $76,000 to $136,000.
Research Analyst Qualifications
Companies that employ research analysts sometimes require a master's degree in finance or a chartered financial analyst (CFA) designation, plus several regulatory hurdles. You might need to take the Series 86/87 exams if involved with a member organization.
Other required securities licenses often include the Series 7 general securities representative license and the Series 63 uniform securities agent license. FINRA licenses are typically for selling specific securities as a firm’s registered representative. Investment analysts may also seek the CFA certification.
As a research analyst, I commonly use Excel for organizing data and performing basic statistical analysis. For more advanced tasks, I might use programming languages like R or Python to automate analysis, run regressions, or visualize data. I may also use SQL to extract and manage data from large databases.
Financial Analyst vs. Research Analyst
Financial firms in the United States don't always have a unified definition for these job titles. Some financial analysts are just researchers who collect and organize market data, while others create specific proposals for securities investments with large institutional clients. Similarly, some research analysts are like marketing specialists, while others apply socioeconomic or political insights and might be better classified as management consultants.
To narrow it down, financial analysts generally focus on analyzing investments and market performance. They rely on a fundamental understanding of business valuation and economic principles to create reports and make recommendations; they are the behind-the-scenes experts. Research analysts have a less prescriptive role. Instead of broad economic principles, they focus more on mathematical models to produce objective answers about historical data.
Financial analysts collect and analyze data within the context of a prior deductive understanding of how markets should function. Their thinking is systemic and, at senior levels, subjective. Research analysts are operations-focused. Give me a series of inputs, and I can calculate the most efficient way to maximize output. If I work in securities, recommendations may be based on predetermined criteria.
What Do You Need to Become a Research Analyst?
As a research analyst, you gather, analyze, and work with data to prepare reports for internal use by a financial institution or an external financial client. For this, you need strong mathematics and statistics skills. Typically, you'll have a bachelor's degree in a business-related field, and a master's degree in finance or a CFA certification may be required. Depending on the job, you might also need securities licenses.
What Is a Research Analyst's Salary?
As of April 2025, the median total pay for a research analyst is around $101,000.
Is a Research Analyst a Stressful Job?
It can be stressful. Being a research analyst requires constant learning, problem-solving, and good communication skills. There may be tight deadlines, complex challenges, and high expectations, which can make the work pressured and stressful.
The Bottom Line
Research analysts are finance professionals who analyze securities data to make recommendations to their own firms or outside clients. They may be buy-side or sell-side, distinguished by the types of companies they work for. Qualifications can include a master's in finance or CFA certification, and sometimes certain tests for licensure are required.
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