Posted By: Kaplan Schweser
Updated: November 18, 2019
The term financial analyst is really an umbrella term that covers several different job titles. Four common job titles for financial analysts include fund manager, portfolio manager, risk analyst, and ratings analyst. Below, we’ve provided more details about each of these financial analyst career paths to help you decide which direction might best match your interests and aspirations.
Fund managers, sometimes called mutual fund managers or hedge fund managers, oversee the stocks, bonds, and other assets a given fund will purchase on behalf of an investor. They have a strong understanding of the goals of the mutual fund, and make decisions based on those goals. A fund manager will make decisions based on price-earning ratios, price momentum, sales, earnings, dividends, and a number of other fund characteristics.
Fund managers are charged with buying and selling stocks and bonds. Sometimes fund managers operate alone, while other times they are a part of a team. Most senior fund managers begin their progression to the career by earning the Chartered Financial Analyst® (CFA®) charter.
Portfolio manager is another popular financial analyst career path. As a portfolio manager, you will work closely with other financial analysts and researchers to explore and analyze potential investment opportunities in corporations, develop a strong and active understanding of trends in investment, and predict future market conditions to help steer business and individual investment decisions.
Portfolio management is a desirable career path for many new or aspiring financial analysts because of the high earning potential and the diverse activities of the day-to-day job. But it’s incredibly competitive and calls for long hours, as well as the inherent pressure of making decisions with someone else’s money. The ideal candidate for a career in portfolio management would be highly motivated and passionate about market and investment research.
Ratings analysts make buy, hold, and sell recommendations based on their assessments and analyses of either entire industries or specific companies. Based on existing conditions and predicted changes, ratings analysts consider factors, like demand and operational conditions, to make educated decisions about whether or not an investor should make a purchase.
Ratings analysts act as a layer of accountability in the market. In addition to analyzing the market, they are major proponents for corporate transparency, and hold corporations to a high standard of honesty and accountability for their financial projections.
A risk analyst blends business and currency knowledge with analytical skills to help clients identify risk and, ultimately, minimize financial investment loss. Risk analysts often make risk limitation recommendations by encouraging diversification and currency exchanges.
There is an inherent amount of risk that comes with operating in the global marketplace. A financial risk analyst acts like a counterweight, helping firms reduce that risk and make investing more sustainable. They are also often responsible for evaluating and reporting on asset losses, keeping track of investment trends, and collecting and analyzing data.
As you can see, while there are a number of different financial analyst career paths, there are commonalities to the roles and responsibilities of each. Knowing a little more about the day to day tasks of each will hopefully help you identify which financial analyst career path best matches your skills and interests.