Among the more rigorous yet rewarding career options in the financial services industry is that of a financial analyst. But what, exactly, does a financial analyst do on a daily basis? The answer to that question is largely dependent upon an analyst’s level of experience. While younger analysts tend to do a lot of data gathering, financial modeling and spreadsheet maintenance, more senior analysts tend to spend more of their time developing investment theses, speaking with company management teams and other investors, and marketing ideas (if they are on the sell-side). Let’s take a closer look at a day in the life of a junior and senior financial analyst.
Junior Analyst: Zero to Three Years of Experience
During the first few years of an analyst’s career, he or she can expect to spend the majority of his or her time gathering relevant data, updating comparison spreadsheets and financial models, and reading relevant news and industry publications. The goal of these activities is to develop a solid fundamental understanding of a particular business, sector or industry. Additionally, many younger analysts allocate a portion of their time towards studying for professional and licensing exams, such as the CFA exam (Source 3), Series 7 and Series 63 licenses. While position titles vary across firms, we use the title “junior analyst” to describe a financial analyst who has less than three years of experience.
Senior Analyst: More Than Three Years of Experience
Once a junior analyst achieves a certain level of industry expertise and develops a reasonably strong network of contacts, his or her professional responsibilities evolve into using data to develop an investment opinion. Additionally, a senior analyst spends quite a bit of time developing relationships with industry and company contacts, and marketing the team’s work. Mentorship is also an important component of a senior analyst’s day-to-day responsibilities.
Despite the differences in a junior and senior analyst’s professional responsibilities, there are similarities in the flows of their day. Here, we present you with a day in the life of a financial analyst.
Sample Day in the Life of a Junior and Senior Analyst
5:30AM: Check Relevant News
Junior and Senior Analyst: Check the news to see if there have been any overnight news releases related to the team’s coverage universe, or if there have been any market-moving events.
6:00AM: Put Out Fires As Needed
Junior Analyst: If there is relevant news on the tape, a junior analyst would normally alert the senior analyst in addition to updating relevant data files and spreadsheets.
Senior Analyst: If there is news on the tape, the senior analyst determines whether or not it affects the analyst’s investment opinions, and how much action should be taken with this news. If there is no news on the tape, the senior analyst’s morning may involve speaking at the firm’s morning meeting, or meeting with institutional clients or members of a company’s management team.
7:00AM: Morning Meeting
Junior Analyst: Many sell-side and buy-side operations facilitate an internal daily morning meeting wherein the key takeaways of analysts’ research are discussed. Junior analysts are typically encouraged to attend this meeting as it broadens the their knowledge base, among other benefits.
Senior Analyst: If a senior analyst is presenting an investment idea to the firm, the analyst might do so during the firm’s morning meeting. Alternatively, the senior analyst might meet with clients or company management.
8:00AM: Check-In with Traders and Salespeople
Junior and Senior Analyst: Regular contact with other team members throughout the firm ensures that an analyst’s ideas are well known and understood.
9:00AM to 11:00PM: Marketing, Making Connections, Work on Long-Term Projects and Maintenance Research, etc.
The ebb and flow of an analyst’s daily activities depends upon factors such as the earnings calendar, the senior analyst’s marketing calendar, and whether or not there are research projects in progress (there usually are).
A Rather Intensive Day May Flow as Follows:
Junior and Senior Analyst: Participate in team meeting with team members.
Junior Analyst: Update marketing slide deck in advance of senior analyst’s marketing trip. Deliver deck to other team members for review.
Senior Analyst: Conference call with company management team to clarify some points regarding the company’s business model and to schedule an investor visit to a distribution center. Attend internal meeting. Review logistics for non-deal roadshow.
Junior Analyst: Meet with mentor over lunch.
Senior Analyst: Lunch with industry contact.
Junior Analyst: Prepare research note template in advance of earnings release.
Senior Analyst: Review junior analyst’s work and offer constructive feedback.
Junior Analyst: Make recommended changes to marketing slide deck.
Senior Analyst: Call clients with latest investment ideas.
Junior Analyst: Review conference call transcripts and earnings release from prior quarter in advance of earnings release.
Senior Analyst: Continue to call clients; check in with trading desk regarding unusually high trading volume in a particular stock.
Junior Analyst: An earnings report is released; thus, the junior analyst must update the team’s financial model and research note template using data from the earnings release. Then the junior analyst must prepare questions for the company’s management team. Any salient points contained within the press release should be flagged to the senior analyst and team.
Senior Analyst: Review earnings report in search of any important points. Contact management team to clarify any questions. Determine the effect of the earnings release on the analyst’s investment opinion.
Junior Analyst: Submit the updated research note and financial model to the senior analyst for review. Make changes as needed.
Senior Analyst: Review research note and model. Make nuanced changes as required.
Junior Analyst: Submit the edited and approved research note to supervisory analysts for approval.
Senior Analyst: Develop talking points for tomorrow’s morning meeting. Review client call lists as calls will need to be made early in the morning.
Junior Analyst: Note is published. Make preparations for senior analyst to speak during the next day’s morning meeting.
Senior Analyst: As soon as note is published, prepare a voice mail blast for distribution to certain clients.
End of day.
The Bottom Line
Generally speaking, a day in the life of a junior or senior analyst can be very labor intensive. Nevertheless, the payoff is a challenging and (potentially) financially rewarding career.