Quantitative Analyst vs. Financial Analyst: What Are the Differences?

A career in finance can be both lucrative and rewarding. Two popular positions in this field are quantitative analyst and financial analyst. Both roles require strong math skills and the ability to think critically. However, there are several key differences between the two positions. In this article, we compare and contrast quantitative analyst and financial analyst, including job duties, education requirements and salary expectations.

What is a Quantitative Analyst?

Quantitative Analysts use mathematical and statistical modeling to analyze financial data and make investment recommendations. They develop complex financial models to identify trends and predict how investments will perform. They also conduct research on financial products, such as derivatives, to assess their risks and potential returns. Quantitative Analysts typically work for banks, asset management firms, insurance companies or other financial institutions. They often hold a master’s degree in mathematics, statistics, economics or a related field.

What is a Financial Analyst?

Financial Analysts conduct analysis of past, present and future financial data to make recommendations to businesses and individuals about investment opportunities, stock purchases and allocation of resources. They use their findings to help make decisions about where to invest money, how to grow revenue and how to cut costs. Financial Analysts typically specialize in a particular industry or sector, such as healthcare or technology. They may also specialize in a particular type of analysis, such as risk analysis or portfolio management. Financial Analysts typically have a bachelor’s degree in business, economics or finance.

Quantitative Analyst vs. Financial Analyst

Here are the main differences between a quantitative analyst and a financial analyst.

Job Duties

Financial analysts and quantitative analysts share some of their job duties. These professionals both collect and analyze data to make financial decisions for their organizations. However, the type of data they use differs. Financial analysts focus on information about customers, markets and financial institutions. Quantitative analysts focus on data about stocks, prices, production levels and other business metrics.

Another key difference between these professions is the type of decisions they make. Financial analysts typically make strategic decisions that affect a company’s overall finances. For example, they might decide which new banking systems to implement or which credit cards to accept. Quantitative analysts also make important decisions, but they usually concern specific aspects of a business rather than the entire business itself. For example, they may determine how many products to produce based on sales projections or they may suggest changes to an algorithm based on testing results.

Job Requirements

A quantitative analyst typically needs to have a bachelor’s degree in mathematics, statistics, economics or another related field. They might also need to have a master’s degree or doctorate in some cases. Financial analysts usually only need to have a bachelor’s degree, but they may benefit from pursuing a master’s degree as well. Many financial analysts pursue the Chartered Financial Analyst (CFA) designation, which requires passing three exams and completing four years of work experience.

Work Environment

Financial analysts typically work in an office setting, but they may also travel to meet with clients or attend conferences. Quantitative analysts usually work in a more traditional office environment and rarely travel for their job. Both types of analysts can expect to spend long hours at work each day, especially during busy periods.

Financial analysts often work full time, while quantitative analysts may work part time or on contract. Financial analysts are more likely to have benefits like health insurance and paid vacation days than quantitative analysts.

Skills

Both quantitative analysts and financial analysts use analytical skills to examine data and draw conclusions. They both also need to have excellent math skills to perform their jobs effectively.

However, quantitative analysts typically use more specialized skills, such as statistical analysis and modeling, to examine data. Financial analysts may use some of these same skills but may also rely on other skills, such as accounting, to help them understand data.

Quantitative analysts often work with more complex data sets than financial analysts. As a result, they may need to have stronger computer skills to be able to manage this data effectively. They may also need to be able to code in order to create the models they use to analyze data.

Financial analysts typically work with less complex data sets but may need to be able to use spreadsheets and databases to organize and analyze this data. They may also need to be able to create presentations to communicate their findings to clients or colleagues.

Salary

Quantitative analysts earn an average salary of $113,816 per year, while financial analysts earn an average salary of $71,352 per year. Both of these average salaries may vary depending on the size of the company at which you work, location of your job and the level of experience you have prior to pursuing either position.