Financial analyst

A financial analyst (or securities analyst, research analyst, equity analyst) works with financial analysis. In the US, financial analysts are sometimes referred to as Wall Street analysts, just as financial services firms in that country are sometimes referred to as Wall Street firms. Equity is a financial security used for financing business. It differs from debt in that it pays no set interest. It is a claim on future earnings.

Controversies about financing

The research department sometimes don't have the ability to bring in enough money to be a self-sustaining research company.

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The research analysts department is therefore sometimes a unit of an investment, investment brokerage, or investment advisory firm.

Related Topics:
Investment - Investment brokerage - Investment advisory

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Since 2002 there have been an extra effort to overcome perceived conflicts of interest between the investment part of the firm and the public and client research part of the firm (see accounting scandals). For example, research firms are sometimes separated into two categories, "brokerage" and "independent", the independent research are not part of an investment firm and don't have the same incentive to issue overly favorable views on companies.

Related Topics:
Conflicts of interest - Accounting scandals

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But that might not be sufficient to avoid all conflicts of interest. The debate is still about the way sell-side analysts are paid. Usually brokerage fees pay for their research. But this creates a temptation for analysts to act as stock sellers and to lure investors into "overtrading".

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Some consider that it would be sounder if investors had to pay financial research separately and directly to fully independent research firms.

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