Equity research analysts/stock analysts are involved in gathering statistical data on investment trends and drafting an appropriate investment decision based on the research analysis. They are involved in accessing all the relevant data and information on a particular investment trend, conduct market research for the same, and study the risks involved in such investments before recommending the investment opportunity to the client. They have to conduct a thorough research by keeping track of all the risk factors involved in such equity transactions and keep monitoring these risk factors constantly before involving their perspective investors in it.
Since equity research analysts deal with researching equity data for estimating the cost involved, they are also termed as cost estimators/analysts.
Key Responsibilities
The main responsibility of an equity research analysis is to project the accurate cost required for funding the upcoming projects, which may prove vital for the survival of the organization. They have to conduct statistical stock-market research for developing an accurate cost information required for bidding into a new project or starting new endeavors which generate adequate profit revenues. The basic job responsibilities of an equity research analyst is similar, though the advanced responsibilities may differ slightly depending on the industry he works in.
The key responsibilities of an equity research analyst comprise:
Required Qualifications and Skills
The basic qualification requirement for being an equity research analyst is a bachelor's degree in finance, economics, financial engineering, statistics, econometrics, or other relevant investment sector. Along with this, a postgraduate degree in MBA is always preferred over normal graduates. Also, if you aspire to do a specialist course in equity research analysis, you can take up a course in Chartered Financial Analyst (CFA) from a recognized university. Apart from the educational qualifications, one is also required to have a relevant experience in equity research analysis for obtaining a better position in this profile. Around two to five years of experience in the relevant field like fund management, investment banking, trading, etc., is apt for starting off as an equity research analyst.
Along with qualifications and experience, one also needs to possess certain skills required for carrying out the duties effectively. One needs to have critical thinking skills and strong analytical skills for efficient interpretation of investment related data, good oral, written, and verbal communication skills, strong networking skills for relationship management within the industry of specialization, and good understanding of capital market, financial statements, and valuation concepts. Along with this, they should also be able to mentor the junior analysts, demonstrate multi-tasking abilities in their working style, and must be flexible with rotational shift timings.
Salary Compensation
The average salary of an equity research analyst falls in the range of $55,000 to $75,000 annually, though the actual salary comprises the basic pay along with stock and cash bonuses which depends solely on the performance.
The scope of a career as an equity research analyst is much higher than other finance based careers, though it also requires additional job responsibilities. So if you wish to make a career in such demanding work profile, it is essential for you to know about the key roles and responsibilities of an equity research analyst.