After completing your traineeship at a ratings agency or data provider you should have the basic analytical skills and product knowledge to go ahead with a junior-level career at the likes of Thomson Reuters or Standard & Poor’s.
The division you first end up working in will be based on the needs of the business at the time, so you may not initially get your dream job. Ratings agencies cover a wide range of sectors. As a junior analyst at S&P, for example, you could be assigned to any one of these units: corporates, economic research, financial institutions, fixed income research, funds, governance and accounting, governments, high yield and leveraged finance, insurance, regulation, structured finance, and US public finance.
As you progress your career in a ratings agency, you’ll get more responsibility for making ratings decisions affecting your clients and you’ll get to work on more complex products for more high-profile issuers. As a manager you might be tasked with overseeing the ratings analysis and research reports carried out by more junior team members and with monitoring the performance of previously rated transactions. And it might also be your job to ensure that your team’s research complies with financial regulations and internal procedures.
As a mid-level analyst at a ratings agency (you might have the job rank ‘vice president’ or VP by now) you will also have more external-facing duties. You might have to contribute to articles which outline your firm’s ratings methodologies to other market participants, or manage regular events such as investor briefings or conferences. And you’ll be a key contact not just for your clients (typically companies issuing bonds) but also for banks, law firms and investors.
By the time you reach the senior ranks (‘director’ will be in your title) your external responsibilities will be even greater – you may find yourself doing media interviews, for example, as ratings agencies are often called upon to offer insights into the industries they cover.
At some stage in your career, typically at the mid-level, you might choose to use your core risk-analytics skills in one of your firm’s other departments. The Fitch Group isn’t just a pure rating agency, for example, it has a ‘solutions’ arm providing credit-market data, analytical tools and risk services. It also has a research unit specialising in emerging markets risk, and a training and professional development wing.
Financial data providers – Bloomberg and Thomson Reuters dominate the market
Financial data providers – Bloomberg and Thomson Reuters dominate the market – offer similar generalist-to-specialist career paths. If you’ve finished your graduate training and are fixed on pursuing a finance-based career (as opposed to one in sales, editorial, IT etc), you will likely start out as an analyst.
You'll be covering a broad market sector, such as equities, fixed income, foreign exchange or commodities. And on a given day you could be providing liquidity analysis solutions to a trader, or advising a portfolio manager on how to use risk management tools. This is a job that requires you to both research data and interact with clients.
Clients of data providers pay big money – a Bloomberg Terminal typically costs more than $20k – for expert industry advice, tools and services. And to enjoy a successful mid-to-senior career in a data firm you need to become an industry expert yourself, confident enough to share your analysis, insights and ideas.
A job in the senior ranks will involve leading a highly specialised team. The financial and risk department at Thomson Reuters (which generates just over half of the company's revenue), for example, is split into more than 20 niche units, including investment banking and advisory, Islamic finance, venture capital and private equity, emerging markets, fixed income markets, hedge funds, investment management, quantitative research and trading, and wealth management.
Because employees of both ratings agencies and data providers have a grounding in fundamental research techniques and an in-depth knowledge of their coverage industries, many of them eventually gravitate towards risk management or research roles in other parts of financial services.