Financial Analysis As Expertise and Profession
Third ISA Forum of Sociology (July 10-14, 2016)
Sociologists have studied financial analysts as market intermediaries linking their role to dimensions such as conferring legitimacy to securities (Zuckerman, 1999), and framing calculations (Beunza & Garud, 2007) in order to tackle uncertainty. The importance of securities analysis in financial markets begs the question of how such knowledge is constructed both as expertise and as a domain of activity. The way analysts organize and maintain control of financial asset valuation as a specific domain of activity has been a less studied topic, but research in sociology of professions has been consistently addressing the question of how expertise is institutionalised as an occupation and can offer important cues regarding the relation between knowledge and profession. Drawing from both the sociology of professions and sociology of finance literature, we present an account of how financial analysis became institutionalised as an expert domain of knowledge and an occupational activity in the Portuguese financial system, while considering how economics and financial theory in particular, embodied in institutional settings, conceptual and material tools, works as a driving force shaping professional practice. The study we conducted used semi structured interviews with financial analysts and university professors of finance in Portugal and documental analysis (e.g. Portuguese law, association statues and deontological norms, university brochures and curricula, educational materials) between 2014 and 2015. Since financial analysis was already an established practice in international financial markets when the Portuguese financial sector developed, the local institutionalisation of the profession followed an already existing model. Moreover, this late institutionalisation of financial analysis in Portugal happened when the features of professionalism in knowledge professions were being transformed. Thus, our research case conforms to a hybrid paradigm, sharing some qualities of a typical professional project while incorporating features of Corporate Professionalization, such as closure through market practices and legitimacy through market value.
expertise, financial analysis, professionalization, valuation