Are you a graduate from a finance background? Do you have a knack for equity and the stock market? If yes, then this might be the right career choice for you. An equity research career is one of the booming segments that can offer you both growth and prosperity. While many people look for equity research analyst jobs, only a few have an idea about the career path and the qualifications needed. Additionally, a few people confuse equity research analysts with financial analysts, but the two are not the same.
So, let us explore the equity research career and the linked aspects to get a better and deeper understanding of how one can progress in their career here.
Who Is An Equity Research Analyst?
Before looking for equity research jobs, it is important to understand who the equity research analyst is? For many people, it is an expert who can guide people about investing in the stock market, but that is just a part of being an equity research analyst. Knowing the complete work profile and responsibilities is important if you plan to start your career in this line.
As said by some experts, “An equity research analyst tells you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.” Well, this indeed explains a lot about equity research analysts.
Equity research analysts produce research reports, projections, and recommendations on companies and stocks for both buy-side and sell-side firms in the securities sector. A bachelor’s degree in finance, accounting, economics, or business administration is required for most equities research analysts. Equity research analysts benefit from having a strong background in statistics and mathematics.
A Senior Equity Research Analyst with a high level of experience in his or her field of expertise can move into an investment management role, where he or she will be in charge of a research team and an investment portfolio. Let us see the important aspects of an equity research analyst’s job to understand this better.
Role Of Equity Research Analyst
A financial security analyst, also known as a securities analyst, is a professional who works in the financial security industry. An equity analyst works for both investment businesses (buy-side) and individuals or brokerage firms (sell-side) that sell items to the buy-side.
On the buy-side of the job, the main role of the equity research analyst is to provide information to the investment managers to help them manage the clients’ portfolios. On the other hand, on the sell-side of the job, the responsibility is to generate the reports and recommendations to help the banks and other institutions sell investment options to the general public.
Based on the same, the broad roles of the equity research analyst include:
- Financial information analysis
An equity research analyst’s first and foremost job is to perform financial information analysis. Based on the data available online or offered by reputed sources like news and other platforms, the analyst is required to draw the trend expectations and future analysis of the market. This data serves as the base for the clients and investment firms to make investment advice and earn returns.
- Reports preparation
Based on the information collected and the analysis done, the next role of the equity research analyst is to prepare the reports. The information analyzed can be used only when properly documented and available to multiple users at different levels. This information serves as the base of research in the future as well. At the same time, the report needs to be thorough that include every aspect of the research that can help the readers understand all the aspects of the investment decision linked to that particular share, segment, or industry.
- Conducting and attending meetings
For many people attending meetings and creating connections are not considered part of the equity research associate jobs. But that is not true, as they need to be in link with other people from the same department of the organization to create lucid and informative documents. Additionally, when the equity research analyst participates in the meetings and creates connections, the participants feel inclusive, confident, and essential to team members. It also contributes to the improvement of the business and helps build trust among the investors and companies that are a part of the Investment Program. Giving the financial presentations about the financial information and the financial people understand and clear the confusion they might have. At the same time, it helps create and build a better level of trust and confidence in the investment.
- Generate investment ideas
Equity research analysts gather the information and analyze the information to provide meaningful and decisive decisions to the investors and companies to help with the help Investments. The other level of the same job involves generating investment ideas that can help the investors and companies to earn from them. Equity research analyst offers clients a better-researched product that offers them safety and reduces the chances of losses. New investment ideas help diversify the portfolio and thereby help in better wealth management and income generation.
So, what is the equity research analyst career path? Well, to find out, let us first check the qualifications needed.
Equity Research Analyst Qualifications
Starting the equity research analyst career path needs to begin with completing the formal education required by an individual to be one of the best research analysts. A bachelor’s degree, ideally in finance, accounting, economics, or business administration, is required. Undergraduate degrees in mathematics, statistics, engineering, and physics, for example, provide in-depth quantitative training.
You don’t need a master’s degree to advance into senior analyst positions. A master’s degree in business administration or finance, on the other hand, can assist you in progressing your profession, particularly in portfolio and fund management.
A few notable programs that one can opt for to become one of the finest equity research analysts include:
- Graduation in finance, economics, business
Did you Know?
If you are willing to work as an equity research analyst in the USA, you might need the additional qualifications. The Financial Industry Regulatory Authority (FINRA), a federal agency that regulates securities firms and brokers, requires a license from many equities research analysts. Because most analysts don’t finish their license requirements until after being hired, the licensing process usually involves sponsorship from an employer.
Equity Research Analyst Skills
For any job, you need a combination of skills to succeed. This includes both soft skills and hard skills. While one is linked to the way you present yourself in front of others, the next is linked to the information and educational aspect of the individual. The top skills to gain if you are looking for a successful equity research career path are as follows:
- Critical thinking
An important talent for equities research analysts is critical thinking. This refers to the capacity to determine the flaws and strengths through logic and reasoning. You should cultivate critical thinking abilities in the workplace. Critical thinking is important because it ensures that the optimal answer to these issues is obtained.
- Problem-solving ability
To succeed as an equities research analyst, the candidate must be able to make decisions and solve complicated problems. There is a steep learning curve because new information is always arriving and influencing present and future circumstances and decisions. The equity researcher must evaluate and track performance, implement remedial actions, and improve the working process.
- Analytical thinking
One of the most significant equities research analyst talents that aspiring students must acquire strong analytical and reasoning ability. Analytical skills are crucial because they enable people to solve problems and determine what actions to take right away. Identifying problems and working with them to find feasible solutions is a necessary skill at all employment levels.
- Financial skills
Financial skills are an inevitable part of the equity research analyst job profile. Apart from having basic financial knowledge, the equity research analyst also needs to have information about how the market works, the factors that influence the market, and how you can understand the future trends in the market. The equity research analyst can gain such financial skills by completing the financial course such as CFA, FRM, CA, or even MBA.
- Industry knowledge
A successful equity research analysis has complete industrial knowledge of the sector he is analyzing or offering the information. Acquiring proper industry information can help chart down better strategies and plans that can help the investors and companies gain immense profits from the investment options.
- Communication skills
An equity research analyst can share his views, ideas, and information with other people in a lucid format. He must have strong communication skills so that he can present his ideas in front of others and explain the content and clear their doubts in case there are any. Since one of the roles of an equity research analyst is linked to creating the reports, communication skills play an important part there. One who can write, read, and speak excellently would be able to prepare research reports and verbally communicate the information without any errors.
- Attention to details
Last but not least, a successful equity research analyst provides attention to every single detail. He is the one who analyses every expectation of the industry, whether it is current or upcoming the future, to conclude. This is the most challenging part of attending to the details required to focus, continuous learning, adaptability, and knowledge acquisition.
Equity Research Analyst Salary
When it comes to salary, the pay scale of equity research analysts in India varies greatly. The average salary offered to an equity research analyst in India is around 5 lacs per annum. In contrast, if we look at the bracket, it starts from 2.5 lacs per annum for a beginner.
As per Glassdoor, the average salary of equity research analysts is INR 7,35,089 in India. The various titles under which the equity research analyst in India works include:
- Associate Equity Research Analyst
- Investment Research Analyst
- Equity Analyst
- Equity Research Associate
Equity Research Analyst Career Path
After finishing bachelor’s degree courses, most equity research analysts start as research associates. Research associates create financial models and perform research under the supervision of a senior equity research analyst. As a broad introduction to the position, new hires may work with a range of analysts over many months.
The designations one might work at to reach the top position of equity research analyst job include:
- Equity research associate
This entry-level position starts your journey to become an equity research analyst. Typically a candidate would require to work for 1 to 2 years in this position to gain the experience and expertise required to be a successful equity research analyst. The main job roles involve understanding the earning models, performing company analysis, preparing quarterly reports, involving clients, and generating ideas.
- Equity research analyst
This equity research professional role is dependent on how quickly you can obtain the firms under investigation, explain the stock industry you’ve researched, express ideas, and provide formal presentations. To work as an analyst, you’ll require a master’s degree in business administration and previous associate experience.
- Equity research senior analyst
After working as an associate or an analyst, a senior analyst is the next step on the equities research career ladder. You would be an expert in specific industries as a senior analyst, such as consumer products, automobile production, pharmaceuticals, and so on. Senior analyst positions require at least five years of experience, an MBA or finance-related degree from a reputable university, or the CFA charter.
Building a successful equity research analyst career depends on your skills and knowledge. But more than that, it also depends on your experience, expertise, and learning abilities. To become the finest equity research analyst, one needs to be in touch with the latest updates and market scenarios. Additionally, you would be required to dedicate around 60 hours per week to reach the pinnacle of the career pyramid. With multiple companies to work with, ensure to carve your skills regularly to stand out from the crowd.
Candidates seeking the position of equity research analyst have numerous prospects for advancement. As an equity research analyst, research is a fantastic place to start. Junior equities research analysts can advance to senior equity research analysts with experience. So, start your equity research analyst career path today and enjoy the success you were waiting for.