Many college students studying business or finance are interested in Financial Analyst jobs: here’s why we’ll try to detail what is the job of a financial analyst.
Financial analysts provide to their clients and companies advice about future financial moves, based on the data that they gather and analyze. The day-to-day operations of a financial analyst still differ whether they work on the buy-side or the sell-side.
Sell-Side Financial Analysts
Sell-side Financial Analysts work for brokerage firms that recommend buying or selling stock based on their research. Essentially, the primary responsibility of a sell-side FInancial Analyst is to convince companies to conduct their trading through the firm that the analyst represents by demonstrating a value that differentiates them from other analysts and firms.
Sell-side Financial Analysts are typically very specialized, following a specific group of companies within a specific industry: since they must report their findings to their firm’s clients effectively and on a regular basis, they become the eyes and ears of that industry, talking, like a good journalist, with anyone with an insider’s knowledge of it and then using all of this information to compile reports that predict the future performance of a particular stock.
Looking for the inside source that nobody else has, they try to expose something nobody else sees coming, to be the first one to inform the client and demonstrate their value as the first to know.
Buy-Side Financial Analysts
Buy-side Financial Analysts connect the sell-side Financial Analysts with the institutional investors they want to work with. They are counted on by these employers, the side looking to invest (typically a mutual fund company or pension fund company), to make the right decisions. To make them, in addition to the news and information that the sell-side Financial Analysts go through very carefully, in order to find something useful or valuable, the buy-side Financial Analysts also examine reports from the sell-side to find valuable insights that will help them.
Buy-side Financial Analysts are very aware of the risk and conduct a fair share of their own research. But, since they typically represent a broader industry sector than the sell-side investor, they are constantly working to identify and source the best of the best on the sell-side.
Similar But Different
Buy-side and sell-side analysts lead similar day-to-day lives. They consume news, dig for insights, build financial models, and generally try to get the inside track on information that will help them provide the most solid stock recommendations. They have similar backgrounds, interests, and formal training. Both sides play a critical role in the movement of money in the marketplace and our global economy.