What Is a Financial Analyst? How to Become One, Salary, Skills

Continued education qualifies financial analysts to provide employers with the most up-to-date information. It can also help you advance your career, particularly for employers who look for financial analysts with the latest knowledge and certifications. Finance is an industry that will continue to grow over the next few years, therefore providing career stability. There are different types of financial analysts, allowing you to choose a role that really showcases and fits your skills.

It can be a fascinating and well-paid career if your skills align with a desire to pursue this field. A financial analyst guides companies or individuals on business investment decisions by analysing economic trends, current business news, and companies’ overall business strategy. Most financial analysts make significantly less than those in other professions in the finance industry, particularly in New York City. However, the median annual income for an entry-level financial analyst is significantly higher than the median annual income for a full-time wage or salary worker in the United States overall. Certification programs teach in-demand skills that today’s employers are looking for — often on an accelerated schedule. A Certified Financial Planner (CFP) certification, for example, reinforces skills like investment, financial planning, and risk mitigation.

The financial analyst may work for a bank, insurance company, real estate investment brokerage, or other data-driven business. A financial analyst career can also lead to other meaningful roles in international business. Yes, it is possible to become a financial analyst through online education. Online education has gained significant popularity and credibility in recent years, offering flexible and accessible learning options for individuals interested in pursuing a career in finance. While a degree is not the sole determinant of success in the finance industry, obtaining a degree in finance offers several benefits and advantages for individuals aspiring to pursue a career in the field. In today’s evolving professional landscape, the requirements for becoming a financial analyst have become more flexible and dynamic.

Take the next step toward a career in finance with a course like Financial Markets from Yale University or Financial Analysis – Skills for Success from the University of Illinois at Urbana-Champaign. They tend to peruse The Wall Street Journal, The Financial Times, and The Economist, as well as financial websites. Completing the Series 7 and Series 63 exams can demonstrate a basic familiarity with investment terms and accounting practices. You might also consider a newer exam created by FINRA in 2018 called the Securities Industry Essentials (SIE) exam.

Financial Analyst Salary

They analyze financial data, evaluate investment opportunities, and support strategic financial decision-making within the organization. Perhaps the most prestigious and highest-paid financial analyst job is that of a sell-side analyst for a big investment bank. These analysts help banks price their investment products and sell them in the marketplace. They compile data on the bank’s stocks and bonds and use quantitative analysis to project how these securities will perform in the market. Based on this research, they make buy and sell recommendations to the bank’s clients, steering them into certain securities from the bank’s menu of products. It’s important to stay up to date as customer expectations, market trends, and global economies evolve.

Some analysts perform their jobs not for a specific employer but for a third-party company that provides financial and revenue analysis to its clients. This shows the value of what a financial analyst does; an entire industry exists around it. It’s important to note that interpersonal skills are also crucial for this role. Financial analysts are sought after by a wide range of companies across industries. Investment banks, asset management firms, and consulting firms rely on their expertise to provide analysis, recommendations, and strategic insights. Platforms like Udemy and Coursera host a variety of finance courses taught by industry professionals and top universities.

Career Paths

When you spend a lot of time building financial models and writing reports, it’s exciting to see it get put to use, whether that is in a transaction, supporting an investment decision, or developing a business strategy. As a result of my education, experience as a consultant, and my industry connections, I eventually was recruited to work at Kaplan Schweser, educating future CFA charter-holders. So, I have been able to fulfill my desire to work as a financial analyst and as an educator.

Tools and Programs Financial Analysts Use

Financial analysts typically have at least an undergraduate degree, often in economics, finance, accounting, or another business discipline. In my case, I had a bachelor’s in economics, a master’s in finance and had passed the level I CFA exam when I started working as a valuation consultant. There are many career paths financial analysts can choose, from working in investment banks to working in nonprofit organizations. In the corporate world, senior analysts can become treasury managers supervising working groups within their departments. A standout performer may rise through the ranks to become a chief financial officer (CFO) or chief investment officer (CIO) responsible for all of the company’s financial activities. Financial analysts conduct financial analysis to guide a company’s investment strategies and evaluate financial outcomes.

The employment of financial analysts in the country is projected to grow 9% from 2021 to 2031, which is faster than the average for all occupations. This growth is driven by the increasing complexity of financial markets and the growing need for professionals with expertise in investment decision-making and risk management. While not required, earning a certification as a chartered financial analyst from the CFA Institute can help individuals pursue careers in financial analysis. Additional credentials for financial analysts include those offered through the Financial Industry Regulatory Authority. To further improve the strength of their resume, many financial analysts go on to obtain a Master of Global Business Administration degree (GBA).

1. Finance is an industry that will continue to grow over the next few years, therefore providing career stability.
2. Some financial analysts work in the securities industry analyzing stocks, bonds, and other securities.
3. Apply for an internship with a company that matches your industry interest.
4. A variety of undergraduate subjects are generally accepted by employers, including business fields such as finance, accounting, and economics.

Education Needed to Become a Financial Analyst

If you graduated with an undergraduate degree and want to become a financial analyst, you can expect to begin in a junior position under the guidance of a senior analyst. After several years of experience, many junior financial analysts consider returning to graduate school for advanced degrees. After experience as a financial analyst, professionals can move into a senior financial analyst role. From here, professionals may progress into management roles like finance manager, director of finance and eventually chief financial officer. Financial analysts can work for financial companies like banks or investment companies, or within businesses. They commonly have academic backgrounds in finance, economics, accounting, or statistics.

A bachelor’s degree—preferably with a major in economics, finance, or statistics—has become a de facto requirement for becoming a financial analyst. Biology and engineering degrees may interest an employer, especially if the applicant is interested in specializing in those industries. Financial analysts also contribute to decision-making processes shared across a company. For example, they contribute a number of valuable data points discussed in team settings.

This provides leadership-level skills in business development, international commerce, and economic policy. It also helps financial analysts navigate emerging market trends and the latest financial compliance regulations. Companies in virtually every major industry require some form of financial what does financial analyst do guidance, allowing financial analysts to work in a variety of different fields. Many work with investment firms, credit intermediation companies, and business management agencies.

Analysts must also develop communication and people skills by crafting written and oral presentations that impress senior management. An analyst must be aware of current developments in the field in which they specialize and prepare financial models to predict future economic conditions for any number of variables. Financial analysts work in junior and senior capacities within a firm, and it is a niche that often leads to other career opportunities. Financial analysts depend on a combination of technical and soft skills to perform their responsibilities. A lot of attention is paid to the technical skills needed to become an analyst. Every analyst must develop technical skills, or they won’t have a job for long.