The demand for analysts is growing more than ever nowadays because a lot of firms/companies are realizing the importance of data analysis. Modern tools and technologies are also making analysis easier. There are different types of analysts like equity analysts, budget analysts, Financial analysts, etc. All have various specified job roles. In the field of finance, there are many professionals, let us see the difference between an equity analyst, Financial analyst, and a financial advisor by comparing their job descriptions & roles.
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An equity analyst can be hired by an investment bank, brokerage firms, money managing firms, etc. Their job is to manage and analyse stock portfolios in such a way that it results in profit. Equity analysts also analyse and build financial models. Their research helps in stock recommendations to their clients. They do market research by reading news, making predictions, talking to clients, etc. They recommend their clients about selling, buying, or holding equity.
They are well aware of the market conditions and know when the right time to do make a financial decision is. There are two types of equity analysts that are Buy-side & Sell-side analysts. Buy-side equity analysts work with mutual fund firms, financial advisory firms, etc. and help in researching portfolios and making recommendations on whether to buy or sell equity. Sell-side equity analysts work with big investment firms/banks and try to find potential profit opportunities.
A Financial analyst is also hired by investment banks, big firms, etc. and are responsible for assisting their clients in making better financial decisions. They are not fully involved in portfolio management like equity analysts, they have to analyse and build financial strategies. They make sure that any financial decision results in the growth of the business. Risk identification & management is also the job of a financial analyst where he/she tries to minimise the financial vulnerability of any particular financial decision.
Data analysis is a must required skill in a financial analyst and he/she should also be able to communicate the financial strategies to his/her co-workers/superiors. A Financial analyst is an expert in reading and analysing financial statements and can also perform budget analysis. However, some firms hire analysts only for budget analysis purpose but it can be done by a Financial analyst too. Financial forecasting is also done by a Financial analyst where he/she predicts trends and opportunities.
A financial advisor can work as a freelancer or for any firm/company. A financial advisor helps his/her clients by assisting them with investment opportunities, selling, or buying resources. They are well informed about the market condition and current opportunities in the market. One does not need to have excellent numerology & mathematics skills as compared to equity analysts and Financial analysts. A financial advisor should be good with people and good in analysing market trends.
A financial advisor has good communication skills and he understands the client’s needs and then does market research based on his/her client’s needs. A client who doesn’t know about the financial rules & regulations seeks help from a financial advisor who makes sure that all the rules & regulations are followed. The working culture of a financial advisor is also very good and one can earn a lot in this sector.
A lot of companies are hiring analysts for different roles because of the emergence of new-age technologies & tools which are making analytics easier and more accurate. You can learn about the skills required in these sectors by taking up a financial analyst course or certification courses available on the internet. This was all about the difference between an equity analyst, a Financial analyst, and a financial advisor.
Also Read: Difference Between Financial Analyst & Business Analyst