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How to Become a Research Analyst

By: Kaplan Schweser
December 10, 2020
Exploring life as a research analyst using touchscreen monitor to look at graphs

According to CFA Institute, 15% of all CFA® charterholders report they are currently employed as research analysts. While not all research analysts do the same thing (depending on whether they choose buy side or sell side), the steps required to secure a job are quite similar.

First of all, it’s important to note that there isn’t just one way to become a research analyst. There are some commonalities and some base-level requirements. But the paths that people take to a career as a research analyst are widely varied depending on their opportunities along the way. However, there are a four things you can do to ensure you are on the right path to becoming a research analyst.

Step 1: Complete the Appropriate Education

This probably comes as no surprise, but firms seek out research analysts who hold diplomas in finance, accounting, or business from well-known universities. That’s not to say earning a degree from a well-known university is your only option, but it certainly makes it easier to get noticed.

It’s also important to realize that the skills you develop in your finance and business courses are not the only skills you’ll need to become an effective research analyst. Soft skills like problem-solving and communication are also quite important. The best research analysts possess a blend of these soft skills, as well as technical research and analysis skills.

Step 2: Earn Additional Certifications

Many research analysts supplement their undergraduate education with additional professional certifications. There’s a reason so many CFA charterholders work as research analysts. The knowledge you acquire by becoming a CFA charterholder is vital to performing the day-to-day tasks of a research analyst. Other aspiring research analysts choose to pursue their MBA. No matter which path you choose, earning additional certifications will help you in two distinct ways. First, it will enhance your knowledge, skills, and capabilities. Second, additional certifications communicate to potential employers your ability to take on and overcome difficult challenges, and your dedication toward investing time and money in your career development.

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Step 3: Secure an Internship

You likely won’t make the leap from college to dream job in a single bound unless you’re incredibly well connected. So you’re going to need some experience developing your skills and demonstrating your capabilities. You can accomplish both, and do some valuable networking, by completing an internship while you’re still in school.

One valuable piece of advice for this step: “where” is a lot more important than “what.” Seek out opportunities at reputable firms where you would eventually want to hold the position of research analyst, even if the internships available don’t provide the exact opportunity you want. If you want to work for that firm, you’re going to need to get and hold the attention of the people in it. If the firm is impressed with your skills and work ethic, you will have a leg up on the competition if you apply for a job there after graduation. Employers also look to each other for validation. The fact that you’ve completed an internship at one reputable firm could open the door of opportunity to getting hired at another. The same advice applies when you are looking for entry-level positions after graduation.

Step 4: Become a Student of Your Industry and the Economy

The best research analysts understand that this is a career path of constant learning. You need to possess the ability to continually gather, process, and report on a never-ending stream of data in order to make solid investment recommendations. Economic conditions, company performance, fluctuations in the political climate, legislative changes, and technological developments are just a small selection of the factors that need to be on the radar of both buy side and sell side research analysts.

This can all be overwhelming at first, but it’s important to make learning a priority and look for opportunities to develop a deeper understanding of your industry and career. When you’re just beginning your career, it’s incredibly valuable to find a willing mentor or a few experienced research analysts in your firm who can answer your questions. Knowing the industry you serve, and the factors that influence it, are critical to becoming an effective research analyst.

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