‘Information is power’ but only to those who know how to use it well and make sense of it! Let’s start this note by finding out what does this astonishingly hefty job tile holds in its realm.
The primary task of a corporate financial analyst involves analyzing piles of data and deriving something meaningful out of it, making sense of the numbers even when it’s not very evident in the first glance. fin
The job role involves making strategic decisions based on the finding supported by the database.
Comparing the records with that of a previous couple of years to see how well or bad the company is performing in the contemporary. They also assess the performance of stocks, bonds commodities and other investment tools to provide their recommendations and investment guidance to individuals and companies.
Where do they fit in?
Capitalism is all about maximizing profit and these guys know how to lead a company to prosperity based on facts and figures.
The role of a financial analyst is such that every business at some point or the other needs it if it’s planning strategic growth. If I have to keep it simple yet philosophical, I would say if a company is willing to learn from its past mistakes and prosper in the future, it needs the expertise of a financial analyst.
The investment banks, pension funds, insurance companies remain the predominated segments for absorbing the talent pool of financial analysts. Majorly all those corporations who are deploying money as a commodity, dealing in large chunks of money on a continuous basis are the prime employers of this job title.
Investment houses happen to have their own funds which require a well-calculated investment risk and return benefit, the financial analyst adds value by providing them with their insights based on the data analyzed.
In the world of finance, there are two types of firms, buy-side firms, and sell-side firms. Understanding the role of financial analysts in both contexts will help us in obtaining better insights.
The role of a buy-side firm is to make investment decisions, these are the firms who have massive capital to deploy for investing and generating profit in the future. Some big players include Fidelity, Blackstone, Citadel, etc.
The role of financial analysts working for a buy-side firm includes making investment strategies for their employer with the help of data insights and suggesting different avenues for investment that will help maximize the ROI.
Coming to the sell-side firms, these are the firms that sell investment banking services like acquisition advisory, trading services, stock research, etc. While working with sell-side firms financial analysts mostly write research reports and recommendations for stocks, whether to buy, hold or sell a particular security. Their remarkable compensations speak volumes for the weight they hold in the capacity of a financial analyst for a sell-side firm.
In addition to the prime employers, any business house that deals in a lot of data and is dependent on using data insights to function and be profitable will necessarily employ a financial analyst. In today’s changing technological landscape data is the king and strategic use of data’s army will help win the war of business.
As the experience of financial analysts increases, they chose a particular segment a niche sector to focus upon and thus their job role gets more particular and defined. Some of them are fund managers, portfolio managers, risk analysts, rating analysts, etc. They cater to specific segments within the industry by leveraging their experience in a particular field.
Companies like Boston Consulting Group, Goldman Sachs, Morgan Stanley, Citi, Fidelity Investments are some established players in the financial domain and they have a plethora of opportunities for those who want to pursue a career as a financial analyst.
In the contemporary world where economies are growing at an enormous scale, the key driver of growth remains the financial industry. Piloting this growth is the people working in the capacity of a financial analyst who uses complex data to provide strategic solutions and in turn help to drive investments. Investment firms, pension funds & insurance companies are some of the prime employers of these skillsets. Other than the prime employers there is a lot of prospects in companies that are data-centric.