A financial analyst is a professional, undertaking financial analysis for external or internal clients as a core feature of the job. The role may specifically be titled securities analyst, research analyst, equity analyst, investment analyst, or ratings analyst. The job title is a broad one: in banking, and industry more generally, various other analyst-roles cover financial management and (credit) risk management, as opposed to focusing on investments and valuation; these are also discussed in this article.
Financial analysts are employed by mutual- and pension funds, hedge funds, securities firms, banks, investment banks, insurance companies, and other businesses, helping these companies or their clients make investment decisions. In corporate roles, financial analysts perform budget, revenue and cost modelling as part of their responsibilities; credit analysis is likewise a distinct area.
Financial analysts invariably use spreadsheets (and statistical software packages) to analyze financial data, spot trends, and develop forecasts; see Financial modeling. The analyst often also meets with company officials to gain a better insight into a company’s prospects and to determine the company’s managerial effectiveness.
Compensation and Benefits
As mentioned, “quantitative analysts” are usually seen as distinct from “financial analysts”. Typically “quants” are concerned with derivatives, fixed income analysis and financial risk management, and focus on mathematical modeling as opposed to accounting-related analytics (compare Financial modeling #Quantitative finance and #Accounting). At the same time, particularly in banking, “quants” often work on the same projects as financial analysts, dealing with the mathematical intensive elements.