Financial Careers: Analytical Jobs
By Brian Perry
In this chapter we will look at finance jobs for individuals that like to look at "the big picture" by analyzing the economy or the broad financial markets. There is a great deal of disparity among these roles, but for the most part they will appeal to people that enjoy analyzing data, following trends and forming opinions as to the future of the financial markets. Many of these roles might also involve a good deal of writing and perhaps public speaking in order to disseminate one's opinion.
Where the Jobs Are
These roles, which include positions as an economist, strategist, and "quant," can be found in a variety of institutions including investment banks, money managers, the public sector and academia. Because they are available at a wide variety of institutions, these jobs can also be found in a variety of locations including large cities as well as college towns.
How to Get an Analytical Job
Most of the roles discussed in this chapter require a fair amount of schooling prior to entry. A college degree is an absolute necessity, while most participants also have either an MBA or PhD. In order to advance to the higher levels of this field, successfully writing and publishing in one's area of expertise is also generally required. One benefit of analytical jobs is that there is some flexibility in moving among different types of employers. For instance, once established, an economist might be able to move from her role at a university to a role at an investment bank, and then on to a job with the government. This flexibility to work in a variety of environments and to perform high-level analytical work can be appealing to those willing to put in the necessary time and effort to earn advanced academic qualifications. (Learn more in The Best Designation For Your Financial Education: CFA, MBA or Both?)
Types of Analytical Jobs
- Economist Jobs
Roles as an economist can be found at a variety of institutions including investment banks, asset managers and hedge funds, governments, central banks, and academic institutions. Economists generally analyze data and trends in the economy in order to explain why current circumstances are what they are or to forecast what the future may hold. Many economists disseminate their views through a combination of writing, teaching, lecturing, or public speaking. At some organizations, an economist functions as one of the "faces" of the firm. At these organizations, individuals comfortable in dealing with the public will do best. Fortunately for individuals who prefer to work outside of the public spotlight, there are also plenty of roles as an economist that involve crunching numbers and forecasting trends without public interaction. Most economists have a PhD, or at a minimum a master's level degree; certifications such as the CFA, CPA or Series 7 license are generally not required. An economist at a large bank or money management firm can make a lot of money, but economists working in academia or government are often underpaid, at least relative to their level of schooling and the salaries of some other financial professionals. Nevertheless, individuals with an analytic bent that enjoy writing and speaking may find the work enjoyable, and should be able to earn a comfortable living regardless of where they choose to work. (For a complete guide to economics, see our Economics Basics Tutorial.)
- Strategist Jobs
Roles as a strategist are similar to the role of an economist: both involve analyzing data and forecasting trends, with a healthy dose of public interaction often part of the job. However, while an economist may focus more on the economy, strategists generally focus not only on the economy but also on the broader financial markets. Strategy jobs are most commonly found at banks and money management firms; academic and government positions are more rare. Career paths vary, but many strategists start out as a research analyst with a product focus i.e. investment grade corporate bonds. The individual may then progress to a fixed income strategy role in which they analyze the overall fixed income markets. Successful individuals may eventually progress to the point where they are appointed Chief Investment Strategist. At many firms, the Chief Investment Strategist is the primary public persona of the firm. For this reason a successful strategist must be comfortable speaking in front of audiences and perhaps appearing on TV in addition to frequently writing market commentaries. Graduate degrees are common among strategists, and some practitioners may have a CFA designation as well. The pay for a top level strategist can be very high, particularly at large firms. A successful strategist also may have the option of moving to a portfolio management role at a hedge fund or money management firm if they so choose.
- Quant Jobs
Many analytic roles involve developing views and then disseminating them to the public or clients. However quants usually work behind the scenes, developing mathematical models to predict the markets. These positions are typically found at money management firms, hedge funds, or banks. The typical quant generally possesses a mathematical or statistical background, and may have a PhD or advanced degree in mathematics or a scientific field. Individuals that enjoy working with numbers and building computer models may find a career as a quant rewarding. Depending on what role they are in, a quant can earn tremendous sums of money. If an individual is able to successfully build models that outperform the market, the potential rewards are almost limitless. (To learn more, see Quants: The Rocket Scientists Of Wall Street.)
While almost every job in finance requires a fair amount of analysis, this chapter has focused on several careers in which analytics are the primary focus. The roles described in this chapter will appeal to individuals that enjoy looking for patterns in data or market trends and then forecasting what direction markets will head in the future. Many of these positions also involve a fair amount of client and public facing activities, making communication skills important for many (but not all) of the positions in this chapter.
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