What is a Securities Analyst?

A securities analyst gathers and interprets data about securities, companies, corporate strategies, economies or financial markets. Securities analysts are sometimes called financial analysts, equity analysts or investment analysts (although there is a distinction among these titles).

How Does a Securities Analyst Work?

Much of a securities analyst's job involves gathering data from publications, researchers and other sources; creating financial models; and writing reports or making presentations.

Securities analysts can also be heavily involved with mergers and acquisitions, consulting, corporate strategy, bankruptcy, and myriad other financially important processes. Most securities analysts work for investment banks, private equity firms, venture capital firms, hedge funds and research companies. They usually study and make earnings estimates for companies in a specific industry or industry sector. They regularly publish reports about these companies and make buy and sell recommendations on those stocks, which clients and third parties pay to read.

They must be able to work well with clients, peers and their bosses; explain their ideas quickly and precisely; have presentation skills; and be extremely confident with spreadsheets and numbers. Some travel a lot. Securities analysts typically work considerably long work weeks, particularly early in their careers, and they must keep up-to-date on developments within their companies, industries and anything that could affect those companies and industries.

Securities analysts often have undergraduate or graduate business degrees, but many investment firms train entry-level analysts, which means that an undergraduate degree in business is not always necessary if a candidate shows aptitude. Some analysts also enter the Chartered Financial Analyst (CFA) program to further their credentials. Many securities analysts go on to become senior analysts, investment bankers, consultants, advisors and chief financial officers.

Why Does a Securities Analyst Matter?

The purpose of a securities analyst is to help people make decisions. Securities analysts gather and interpret data to do this, and quite often they have to project events. To do this well, an analyst has to stay on top of industry and company trends, market trends, economic trends, new regulations, changes in accounting rules and other information.

For this reason, securities analysts carry a great degree of responsibility. The results of their analyses influence investor decisions, and a mistake in a spreadsheet or an overlooked piece of information could mean inadvertently making the wrong recommendations, which could have far-reaching consequences.