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Financial Quantitative Analysts


In the 1790s the first U.S. stock exchanges were created. A group of men who did their trading under a tree at 68 Wall Street were the originators of what would later (in 1863) be named the New York Stock Exchange. The markets grew as the country's industries developed. The unregulated U.S. securities markets flourished in the years immediately after World War I, with millions of people aiming to improve their fortunes through stock investments. Many investors lost their life savings, however, in the 1929 stock market crash. Consumers became reluctant about investing their money and grew to distrust banks and financial institutions. In 1934, Congress established the Securities and Exchange Commission to monitor the markets and institute rules and regulations in the industry, ensuring that companies and stockbrokers were truthful about their businesses, the investments offered, and the potential risk involved.

In 1947, the Financial Analysts Federation (FAF) was created for investment professionals, to establish standards and best practices in the industry. The Institute of Chartered Financial Analysts (ICFA) was developed in 1959, offering certification for the designation chartered financial analyst (CFA), and in 1963, 268 analysts became the first group of CFA charterholders. The FAF and ICFA merged in 1990, becoming the Association for Investment Management and Research, and later renamed the CFA Institute.

Deregulations in the 1970s and 1980s increased competition in the industry, creating greater crossover between finance and banking. There was growing demand for knowledgeable professionals such as financial quantitative analysts to research and advise clients on the numerous and complex investment options that were now available. The rise and fall of technology stocks by 2000 raised concerns about the veracity of the information analysts had shared and about the information reported by certain financial analysts. In late 2000, the SEC instituted the Regulation Fair Disclosure rule, which mandates fuller, more honest public disclosure of investment information. Public officials have continued to investigate and prosecute corruption and dishonesty on Wall Street.

Technology itself continues to affect the financial quantitative analysis profession. Analysts are now able to use various statistical software and spreadsheet programs to gather and study financial data and information, and to create financial models and reports for presentations. The job of financial quantitative analyst continues to evolve, and those who are knowledgeable, skilled, and honest remain in demand because of the complexities of investing.

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