What makes a good Investment Analyst?

WRITTEN AUG 2020

We’ve seen a real growth in roles in Investment Analysis of late. Perhaps on the wealth management side it’s because more investment decisions are being centralised, but there’s always strong demand in institutional asset management too for high quality Investment Analysts. Fund Managers and strockbrokers always need high quality information to ensure that their portfolios are positioned correctly, and this is a key role. It’s a tough part of the industry to get into and hiring firms are fairly predictable in that they want people with strong academics. In addition, depending on where you are in the your career, they will want individuals to be at least part way through the CFA or CFA qualified. Once in the industry, what else are firms looking for when hiring?

Team players who are independent thinkers

It sounds a contradiction, but firms really do want to hire team players who are independent thinkers. They want people who can work together to continuously improve a research department’s output, those who can attend an investment committee, but they want individuals who will speak up about their investment ideas.

In some firms you may be the only expert on a particular asset class, but in many firms they will have one asset class, or investment style, and the investment committee will gather to discuss the macro environment, sectors, and individual stocks. Good investment analysts need to be able defend their ideas against high levels of scrutiny.

Strong communicators

The stereotypical analyst is often portrayed like the stereotypical accountant, but this isn’t true. To take part in the investment debate effectively, you need to be a strong communicator. Also, research is a department in its own right and naturally senior analysts find themselves managing others – people skills are important.

Sceptical and intellectually curious

Successful analysts are interested in the world around them, and question and evaluate things constantly. Not to be difficult, but to understand the drivers of a sector or asset class.

Specialist knowledge

At a certain level, firms hire based on candidates having very niche knowledge. They are paying for expertise and insight into a certain asset class, or more likely a sub-section of an asset class, which generalists can’t provide. Track record and reputation matters.

Performance

The results of an analyst’s recommendations are very visible.

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