Many enthusiastic graduates express an interest in becoming an investment analyst. It is, after all, a role which can conjure up images of prestige and wealth.
But vacancies are few and far between – particularly in Scotland - and asset management companies that are hiring can have very specific requirements.
What does an investment analyst do?
First of all, it’s helpful to outline what the role of an investment analyst actually is.
Investment analysts carry out detailed research and financial modelling. This can relate to individual stocks, specific sectors or broader areas of the economy.
Typically, they provide buy or sell recommendations to portfolio managers, stockbrokers and investment banks. Investment analysts can also offer opinion on larger, macroeconomic trends.
Investment analysts can also be known as financial analysts, research analysts or securities analysts.
What can an investment analyst expect to earn in Scotland?
In our latest Salary Guide, we’ve outlined the expected salary ranges of investment analysts based on experience.
- £30,000 to £40,000 1 to 3 years’ experience
- £40,000 to £55,000 3 to 5 years’ experience
- £55,000 to £75,000 5 to 8 years’ experience
- £90,000 to £110,000 8 years’ plus experience
Please note, these salaries do not include bonuses or benefits.
So, what does it take to become an investment analyst?
To give you an indication of just how high the bar is, an 'ideal investment analyst' looks something like this:
- 2:1 or First Class in an analytical subject, e.g. mathematics, accounting, engineering, etc. that equips individuals with the skillset required to conduct research and analysis or to understand the narrative behind the numbers
- Masters in an investment-related field
- IMC certificate and passed CFA Level 1
- Either or both degrees include experience of building models, handling large volumes of data and analysing them using Excel or VBA
- Was an active member of an investment club at university
- Has completed or is in the process of completing a graduate program or internship within a recognised investment house in front office. A specific investment analyst program would be desirable
- Can demonstrate a track record - either real or virtual - in picking stocks
It is a daunting list. But as challenging as qualification points 1-3 are, experience points 4-7 are arguably the most important.
Standing out from the crowd…
To differentiate yourself in what is an extremely competitive area, it is crucial you demonstrate a real passion for the discipline beyond the experience and commitment.
If you are an aspiring designer or photographer you will have a portfolio of work. Budding investment analysts should be no different.
Being able to discuss at interview your five best stock ideas or investment strategies can make you really stand out. Reference to an investment blog you have been writing for the past two years will be similarly impressive. Having an active stocks and shares ISA, however modest, is a good start too.
…while fitting in
But even if you have ticked all these boxes, you may not be quite the right fit for the hiring organisation. Some asset managers might be seeking a conservative, process-driven analyst, while others may be looking for a more creative, contrarian investor.
Importantly, as well as giving you an edge during the recruitment process, 4-7 about experience will give you the opportunity to explore a range of styles and work out what approach best suits you.
Aspiring investment analysts
This article is not meant to deter aspiring investment analysts. It is meant to encourage. So if you are one, don't despair. If you are at school, university or recently graduated, this article should form a road map for your future success.
If you're already working within the financial sector but don’t have many, if any, of the elements described above, perhaps a career as an investment analyst isn't really for you. You may be largely attracted by the money and reputation. No bad thing in itself, but perhaps not enough to sustain a long and fulfilling career.
Put simply, if you are not already running your own portfolio in some form or another, writing your own investment blog or debating stock ideas with like-minded souls, being an investment analyst probably isn't your great calling in life.
After all, a budding photographer who has never taken a photograph is no photographer at all.