Securities Analysts work for major investment firms, and for institutional investors such as pension funds, analyzing various investment instruments for possible recommendation to outside clients or internal Portfolio Managers. Because the investment world is so large and complex, it is common for an analyst to specialize in analyzing either the stocks, or the bonds, of companies in a single industry or economic sector.
Portfolio Managers select and monitor investments for large institutional pools of money, such as pension funds, mutual funds, and life insurance companies. Their responsibilities sometimes reflect, in part, the needs of the types of clients whose money is under their care. Pension Managers, for example, hold fiduciary duties to pension plan participants whose portfolios they manage, and must comply with federal pension protection laws. Some Portfolio Managers specialize in “alternative investments,” such as real estate, commodities, or such financial derivatives as futures and options. Hedge Fund Managers use complex strategies to build “non-directional” portfolios, with returns that do not depend on general movements in the stock market or the economy.
Investment Bankers work for securities firms that help corporations, government agencies, and nonprofit organizations raise large amounts of money (sometimes in the billions of dollars) in the financial markets. An Investment Banker advises a client organization on how it can most effectively raise the desired money, and the investment banking firm may actually buy the new stocks or bonds the client decides to sell, with a syndicate of cooperating investment banks reselling the securities to the investing public through retail Account Executives.
Account Executives are often referred to informally as “stockbrokers.” They sell stocks, bonds, or mutual fund shares to clients. It is typical for Account Executives to earn compensation for their advice and transaction services through commissions that buyers pay on the investment products they buy.
Financial Planners assist individuals and small businesses in building financial security through the integration of the clients' financial plans, estate plans, and business plans. Financial planning services sometimes are provided by Account Executives or Insurance Agents who earn commissions on financial products they sell; others offer their services as pure Financial Planners who do not sell financial products and therefore earn money only by charging fees for their professional advice. Either type of Financial Planner can seek to earn the Certified Financial Planner (CFP) designation.
Desk Traders buy or sell securities, using computers and specialized software called trading platforms, in financial markets connected by telecommunications networks. Some Desk Traders operate as principals in financial transactions, buying or selling securities with the goal of making good long-term investments for themselves or the firms that employ them. Others serve as agents, who execute orders for clients seeking to buy or sell securities on the organized markets. Still others are Market Makers, who seek to profit by earning bid-ask spreads.
Investor Relations Specialists work for publicly-held corporations with large numbers of shareholders. They address any questions and concerns raised by those shareholders, provide financial information about their companies to professional investment analysts, and work with management to coordinate how and when company information should be disseminated to the public.
Trust Officers are investment managers who work in the trust departments of banks or other financial institutions. They manage money placed in special trust accounts under their institutions' care, typically by individuals or organizations that lack the time or expertise to handle their own investments.
Financial Engineers use cutting-edge financial technology and advanced mathematical tools to manage financial risks, and to create new investment products and programs. They typically work for investment firms, hedge funds, or large commercial banks. A primary tool used in implementing financial engineering strategies is derivative instruments.
