Key Differences between Sell Side and Buy Side Research Analysts

If you're associated with finance domain, you must have heard about Buy Side and Sell Side Research services in your day to day interactions.

But do you know what these terms refer to in the relevant context?

This piece will provide you with insights into the technicalities involved in the above said two concepts.

Let us start by discussing these two concepts in a more simplified manner.

Meaning

Buy-side belongs to the entities that are related to making the investments. These entities can be companies or individual investors involved in investing cash for future returns. The risk is often higher when it comes to buy-side as the choice of investing is the sole responsibility of the buy-side firm or analyst.

These entities typically operate with a specific domain or industry segment. The risk involved is less on this particular side, as the decision is not theirs to make, and their primary responsibility is to put forth their opinions and estimates.

Buy Side vs. Sell-Side Analysts

The type of work analysts are involved in, either buy-side or sell-side is very similar. The objective is also the same, i.e., identifying the most advantageous and high return investment domain.

Both Sell-Side and Buy-Side Research services are used for conducting research and creating reports from their analysis.

However, the depth and intensity of their work differ a lot.

The reports developed by a buy-side analyst are available only to the company internally, whereas reports prepared by sell-side analysts can be found in the public domain.

Usually, a buy-side analyst uses reports from different sell-side analysts and furthers the analysis for making their own reports.

In addition to that, the task of sell-side analysts is to determine if the investment option should be recommended or not, but a buy-side analyst has to go further and understand whether the investment option is in line with the strategy or not.

In simple words, the accountability of sell-side analysts is less when compared to a buy-side one.

Higher skills and knowledge of financial phenomenon is also required for a buy-side analyst when compared to the sell-side analysts. And, that’s the reason why buy-side analysts make more money than the sell-side analysts in the industry.

Conclusion

If you want to use sell-side or buy-side analysis, or Financial Modeling and Analysis Services, contact Penterra Analytics. Penterra Analytics is a renowned agency providing excellent market research and analytics services in India.