Financial Analysis Stereotype Breaker
Financial analysis is the powerhouse of modern investment activity. The stereotype of the quantitative analysts (or ‘quants’ are they’re labelled in the industry) goes that they yield a lot of power and are giving traders a run for their money in terms of who rules the roost in the investment domain. They’re also regarded as the ultimate hard core maths geniuses in the industry…and they’re mostly male.
So what’s really going on? Does this all have a rise of the machines feel to it all à la The Terminator? Do these guys rule the roost when it comes to earning potential in this area? And do they live in their own quantitative worlds, detached from the realities of the fund or investment bank they work for?
Mathematical minds, ahoy!
You won’t usually find a quant with anything less than at least a master’s qualification in a subject with strong quantitative elements. Mega maths abilities and an exceptional understanding of statistics are paramount, but so is the need to communicate analysis findings and recommendations based on these findings clearly to investors who don’t have the foggiest when it comes to mathematical and statistical languages. Quants need to be able to tell investors in a clear way about their findings to help them to make final decisions on their investments.
This means that then can very much be involved when it comes to advisory tasks too, and therefore they are a personable bunch, able to communicate well with their colleagues and/or clients. No shy-away characters here!
Going it alone…
The nature of the work quants do, the knowledge they glean from doing it and the importance it holds for a reforming, risk-conscious financial industry means that financial analysis experts don’t just work for big investing institutions like investment banks and hedge funds. Experienced quants also have the know-how and the ability to go it alone and set up their own fund if they choose, with the potential to earn even more by doing so if they can get it right.
Diversity in financial analysis…
Investment banks and funds are making big efforts to enforce diversity policies in recruitment. There are currently still more men that work in financial analysis than women, but things are definitely changing and women are just as able to build a career in this area.