How Do I Become a Research Analyst?

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  • Written By: Geri Terzo
  • Edited By: PJP Schroeder
  • Last Modified Date: 23 November 2019
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Institutional and retail investors often turn to the advice of the research analyst community to support investment decisions. In order to become a research analyst, an individual must complete several layers of education, including undergraduate and postgraduate accomplishments, and gain industry experience. An individual must also maintain a level of certification on the path to become a research analyst.

There are different types of research analysts in the financial community, and it will eventually become necessary to decide which kind is best suited to you. Buy side and sell side analysts are two of the common types of analyst professionals. A sell side analyst is responsible for providing in-depth research to other professionals in a financial services firm, including an independent brokerage house or in a large financial institution that has brokerage capabilities. At times, a sell side analyst will also include clients of that firm in the distribution of research.

Pursuing a career as a buy side analyst is another option that you may consider. Unlike the sell side professional, this analyst is employed by an institutional investor, such as a pension fund or a hedge fund, and prepares research for the money managers at the firm. The research is designed to support investment decisions by that firm that will have a domino effect on the investment portfolio performance of other investors, both large and small, who have exposure to that fund.


Another choice that you will have to make on the path to become a research analyst is whether to focus on the equity capital markets or debt capital markets. The former is where equity is issued and stocks are traded. The debt markets are where bonds are issued and traded. You will have to draw conclusions on an entity's financial health based on the level of equity and debt on a balance sheet.

In terms of education, an individual who wants to become a research analyst should earn an undergraduate college degree in finance or a related major, such as accounting or economics. Also, it may be necessary to achieve a master's of business administration in finance. To become a research analyst, you must have a command of accounting and economics as the profession demands the sifting through of sometimes complex financial statements. It is also important to be able to make decisions about the investment potential in a region, corporation, or federal or local government.

Some certification will likely be required in order to advance as an analyst. It is possible that an employer will sponsor an employee's training to become a certified professional analyst. Further licensing may be required upon several years of experience, such as a certification from the Chartered Financial Analyst Institute in the U.S.


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