# What Is a Research Analyst? What They Do and Qualifications

![Market Research](https://www.investopedia.com/thmb/iXCzx1nln88AwiVQ5pA1ugY6lYA=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/GettyImages-57283921-5681e50e3df78ccc15b76b3f.jpg)

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> **Definition**
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> A research analyst is a professional who collects, analyzes, and reports data to businesses and organizations, helping them in their decision-making process.

## What Is a Research Analyst?

A research analyst is a professional who prepares investigative reports on securities or assets for in-house or client use. Other titles for this function include securities analyst, investment analyst, equity analyst, rating analyst, or simply "[analyst](https://www.investopedia.com/terms/a/analyst.asp)."

The work conducted by a research analyst is in an effort to inquire into, examine, find, or revise facts, principles, and theories for internal use by a financial institution or an external financial client. The report an analyst prepares entails the examination of public securities records of companies or industries, and often concludes with a "buy," "sell," or "hold" recommendation.

If a research analyst is involved with an [investment bank](https://www.investopedia.com/terms/i/investmentbank.asp) or a securities firm controlled by a member organization of the [Financial Industry Regulatory Authority (FINRA)](https://www.investopedia.com/terms/f/finra.asp), they may be required to register with a self-regulatory organization (SRO) and/or take certain exams.

### Key Takeaways

*   A research analyst is a professional who prepares investigative reports on securities or assets for in-house or client use.
*   These reports examine individual companies' or industries' public securities records and often make recommendations to buy, sell, or hold.
*   The main differences between buy-side and sell-side analysts are the type of firm that employs them and the people to whom they make their recommendations.

## The Basics of Being a Research Analyst

Research analysts are usually divided into two groups: "buy-side" and "sell-side" analysts. A buy-side (brokerage) research analyst is typically employed by an [asset management](https://www.investopedia.com/terms/a/assetmanagement.asp) company and recommends securities for investment to the money managers of the fund that employs them. The research of a sell-side (investment firm) analyst tends to be sold to the buy-side. Sell-side research is also given to clients for free for consideration, in an attempt to win business, for example. Such research can be used to promote companies.

A buy-side analyst usually works for institutional investors such as hedge funds, pension funds, or mutual funds. Buy-side research analysts are often considered more professional, academic, and reputable compared to the sell-side. Sell-side research jobs are often likened to marketing and sometimes pay higher salaries.

> **Important**
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> Buy-side analysts will determine how promising an investment seems and how well it coincides with the fund's investment strategy. Sell-side analysts are those who issue recommendations of "strong buy," "outperform," "neutral," or "sell."

Research analysts can work at a variety of companies, such as at asset management companies, investment banks, insurance companies, hedge funds, pension funds, brokerages or any business that needs to crunch data to spot trends or decide on a valuation, make an investment decision, or forecast the outlook of a company or asset. According to Glassdoor, the average base salary for a research analyst is $101,000, ranging anywhere between $76,000 to $136,000.

## Research Analyst Qualifications

Companies that employ research analysts sometimes require a master's degree in finance or a [chartered financial analyst (CFA)](https://www.investopedia.com/terms/c/cfa.asp) designation on top of several regulatory hurdles. Research analysts might be required to take the [Series 86/87](https://www.investopedia.com/terms/s/series-86-87.asp) exams if they are involved with a member organization.

Other required securities licenses often include the [Series 7](https://www.investopedia.com/terms/s/series7.asp) general securities representative license and the [Series 63](https://www.investopedia.com/terms/s/series63.asp) uniform securities agent license. FINRA licenses are typically associated with the selling of specific securities as a firm’s registered representative. Investment analysts may also seek to obtain the Chartered Financial Analyst (CFA) certification.

Research analysts commonly use Excel for organizing data and performing basic statistical analysis. More advanced tasks may require programming languages like R or Python, which are useful for automating analysis, running [regressions](https://www.investopedia.com/articles/financial-theory/09/regression-analysis-basics-business.asp), or visualizing data. Research analysts may also use SQL to extract and manage data from large databases.

## Financial Analyst vs. Research Analyst

Financial firms in the United States do not really present a unified definition of either of these job titles. Some financial analysts are really just researchers who collect and organize market data, while others put together specific proposals for securities investments with large institutional clients. Similarly, some research analysts are glorified marketing specialists, while others apply socioeconomic or political insights and are probably better classified as management consultants.

It's possible to narrow the differences between research analysts and financial analysts. Generally speaking, financial analysts focus on analyzing investments and market performance. They rely on a [fundamental understanding of business valuation](https://www.investopedia.com/terms/f/fundamentalanalysis.asp) and economic principles to create reports and make recommendations; they are the behind-the-scenes experts. Research analysts occupy a less prescriptive role than financial analysts. Instead of looking through the lens of broad economic principles, they focus more on mathematical models to produce objective answers about historical data.

Financial analysts collect and analyze data but always within the context of a prior deductive understanding of how markets should function. Their thinking is systemic and, particularly at more senior levels, subjective. Research analysts tend to be operations-focused. Give a research analyst a series of inputs, and they can calculate the most efficient way to maximize output. If the research analyst works in the securities business, it's likely that recommendations may be made based on some predetermined criteria.

## What Do You Need to Become a Research Analyst?

Research analysts gather, analyze, and work with data to prepare reports for internal use by a financial institution or an external financial client. For this work, strong mathematics and statistics skills are required. Typically, a research analyst will have a bachelor's degree in a business-related field, and a master's degree in finance or a chartered financial analyst's certification may be required. Depending on the requirements of their job, they also may need to gain securities licenses.

## What Is a Research Analyst's Salary?

As of April 2025, the median total pay for a research analyst was around $101,000.

## Is a Research Analyst a Stressful Job?

It can be. Being a research analyst requires constant learning, problem-solving, and good communication skills. There may also be tight deadlines, complex challenges, and high expectations, which can make this type of work pressured and stressful.

## The Bottom Line

Research analysts are finance professionals who analyze securities data to make recommendations to their own firms or outside clients. They may be buy-side or sell-side analysts, which are distinguished by what types of companies they work for. Qualifications may include a master's degree in finance or certification as a chartered financial analyst. Sometimes they may be required to take certain tests for licensure.  

> **Article Sources**
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> 1.  FINRA. "[FINRA Rules: 1220. Registration Categories](https://www.finra.org/rules-guidance/rulebooks/finra-rules/1220)."
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> 2.  Glassdoor. "[Research Analyst Salaries](https://www.glassdoor.com/Salaries/research-analyst-salary-SRCH_KO0,16.htm)."
>     
> 3.  FINRA. "[Qualification Exams](https://www.finra.org/registration-exams-ce/qualification-exams)."
>     
> 4.  CFA Institute. "[CFA Program](https://www.cfainstitute.org/en/programs/cfa)."