The role of an equity analyst is to analyze financial data and public records of companies, and use this analysis to determine the value of the company’s stock and to predict the company’s future financial picture. This job is focused heavily on research and analysis. Most equity analysts are employed by brokerages or financial firms.
Equity Analyst Job Duties
The position of an equity analyst involves much research and writing of reports. On a daily basis, equity analysts can expect to:
- Analyze both buy-side and sell-side securities
- Use computer programs and tools including Word, Excel, Bloomberg, the Internet, and Reuters
- Adapt one’s analysis to specified formats, templates, styles and deadlines when creating reports
- Communicate well both in writing and orally
- Collaborate with other team members and share information and insights
- Be knowledgeable about a wide range of companies
- Maintain a large list of independent sources/contacts for information
- Respond to breaking news developments on companies within one’s sector
Career Options for Equity Analysts
Most equity analysts work for brokerages and financial firms. They may work for private banks, equity firms and investment firms. Some equity analysts may transition into working as portfolio managers or financial analysts, but because the training for equity analysts is highly technical and research-oriented many choose to remain in the equity analyst career field.
A quick search of available positions worldwide for equity analysts revealed the following well-known companies that employ equity analysts:
- Fidelity Investments
- Morgan Stanley
- MassMutual Financial Group
- Bank of America
- KeyBanc Capital Markets, Inc.
- JPMorgan Chase
Education Required of Equity Analysts
Possession of a bachelor’s degree is a must in order to become an equity analyst. This degree should be in a business field, such as finance, business administration, statistics or accounting. To get ahead in the field, many equity analysts are pursuing Master in Business Administration (MBA) degrees. Options include:
- MBA with concentration in Financial Analysis
- Master of Science in Finance (with or without concentration in Financial Analysis)
- Master of Science in Financial Analysis
Graduate-level coursework that one can expect to take in preparation for a career as an equity analyst includes:
- Economic theory and applications
- Managerial accounting
- Financial statement analysis
- Investment and portfolio management
- Ethics in management decisions
Equity Analyst Experience Required
If one wishes to pursue certification as a Chartered Financial Analyst (CFA) (see below), one needs at least three years of work experience in the field prior to entering the CFA educational program. While still in college, many students pursuing a career in equity analysis seek out internships with mutual fund firms, securities firms, banks or pension funds. These internships can lead to networking opportunities and to full-time positions that will help an aspiring equity analyst gain valuable experience.
Certification Options for Equity Analysts
Certification as a Chartered Financial Analyst (CFA) offered by the CFA Institute is optional but recommended for equity analysts who wish to advance and increase marketability in their careers. This certification can only be pursued after obtaining a bachelor’s degree and spending three years working in the field. The CFA Program is a graduate self-study program offered by the CFA Institute that must be completed prior to taking the CFA certification examination. There are three levels of study, each organized into 18 study sessions. The CFA Program curriculum, also known as the Candidate Body of Knowledge (CBOK), includes topics in:
- Ethical and Professional Standards
- Quantitative Methods
- Financial Reporting and Analysis
- Corporate Finance
- Equity Investments
- Fixed Income
- Alternative Investments
- Portfolio Management and Wealth Planning
CFA Exams are taken at the end of each of the three levels of study. All three exams must be passed in order to earn the CFA charter.
- Level I exam consists of multiple-choice questions
- Level II exam consists of item set questions
- Level III exam consists of item set and essay questions
Salary and Employment Information for Equity Analysts
The Bureau of Labor Statistics (BLS) of the U.S. Department of Labor classifies equity analysts as financial analysts. According to the BLS, the average national mean salary for financial analysts in May 2018 was $100,990. The BLS also notes that there are 306,200 people employed as financial analysts in the U.S., with the states having the greatest number of financial analysts as New York, California, Texas, Illinois and Massachusetts. Analysts in New York have the highest salaries in the nation at $137,270 annual mean salary.