According to the US Dept of Labor, investment banking is done by a financial analyst, who specializes in investment consulting for banks:
Financial analysts, also called securities analysts and investment analysts, work for banks, insurance companies, mutual and pension funds, securities firms, and other businesses, helping these companies or their clients make investment decisions. Financial analysts read company financial statements and analyze commodity prices, sales, costs, expenses, and tax rates in order to determine a company’s value and to project its future earnings. They often meet with company officials to gain a better insight into the firm’s prospects and to determine its managerial effectiveness. Usually, financial analysts study an entire industry, assessing current trends in business practices, products, and industry competition. They must keep abreast of new regulations or policies that may affect the industry, as well as monitor the economy to determine its effect on earnings.
Financial analysts use spreadsheet and statistical software packages to analyze financial data, spot trends, and develop forecasts. On the basis of their results, they write reports and make presentations, usually making recommendations to buy or sell a particular investment or security. Senior analysts may even be the ones who decide to buy or sell if they are responsible for managing the company’s or client’s assets. Other analysts use the data they find to measure the financial risks associated with making a particular investment decision.
Financial analysts in investment banking departments of securities or banking firms often work in teams, analyzing the future prospects of companies that want to sell shares to the public for the first time. They also ensure that the forms and written materials necessary for compliance with Securities and Exchange Commission regulations are accurate and complete. They may make presentations to prospective investors about the merits of investing in the new company. Financial analysts also work in mergers and acquisitions departments, preparing analyses on the costs and benefits of a proposed merger or takeover.
Training and education required:
A college education is required for financial analysts and is strongly preferred for personal financial advisors. Most companies require financial analysts to have at least a bachelor’s degree in business administration, accounting, statistics, or finance. Coursework in statistics, economics, and business is required, and knowledge of accounting policies and procedures, corporate budgeting, and financial analysis methods is recommended. A master’s degree in business administration is desirable. Advanced courses in options pricing or bond valuation and knowledge of risk management also are suggested.
Employers usually do not require a specific field of study for personal financial advisors, but a bachelor’s degree in accounting, finance, economics, business, mathematics, or law provides good preparation for the occupation. Courses in investments, taxes, estate planning, and risk management also are helpful. Programs in financial planning are becoming more widely available in colleges and universities.
Although not required for financial analysts or personal financial advisors to practice, certification can enhance one’s professional standing and is strongly recommended by many employers. Financial analysts may receive the Chartered Financial Analyst (CFA) designation, sponsored by the CFA Institute . To qualify for this designation, applicants need a bachelor’s degree and 3 years of work experience in a related field and must pass a series of three examinations.
Overall employment of financial analysts and personal financial advisors is expected to increase faster than average for all occupations through 2014, resulting from increased investment by businesses and individuals.
Deregulation of the financial services industry is expected to spur demand for financial analysts and personal financial advisors. In recent years, banks, insurance companies, and brokerage firms have been allowed to broaden their financial services. Many firms are adding investment advice to their list of services and are expected to increase their hiring of personal financial advisors. Many banks are entering the securities brokerage and investment banking fields and will increasingly need the skills of financial analysts.
Financial analysts also will be needed in the investment banking field, where they help companies raise money and work on corporate mergers and acquisitions. However, growth in demand for financial analysts to do company research has been, and will continue to be, constrained by regulations that require investment firms to separate research from investment banking. As a result, firms have eliminated research jobs in an effort to contain the costs of implementing these regulations.
Demand for financial analysts in investment banking fluctuates because investment banking is sensitive to changes in the stock market. In addition, further consolidation in the finance industries may eliminate some financial analyst positions, dampening overall employment growth somewhat. Competition is expected to be keen for these highly lucrative positions, with many more applicants than jobs.
For information on a career as a financial analyst, contact either of the following organizations:
American Academy of Financial Management, 2 Canal St., Suite 2317, New Orleans, LA 70130. Internet: http://www.financialanalyst.org