Read How to Become a Financial Analyst

How to Become a Financial Analyst

The Basics of Becoming a Financial Analyst

Are you investigating how to become a Financial Analyst? Their man job is to conduct analysis of financial information to determine market conditions. They advise investment decisions, monitor financial and corporate developments, and interpret data on price and risk. They evaluate the performance of stocks, bonds, and other kinds of investments. Analysts examine the financial statements of organizations to determine their value. They also keep up to date with economic and business trends. They work in investment banks, pension funds, hedge funds, and other businesses.

What general knowledge should a financial analyst possess? First and foremost, financial analysts should have knowledge of economics and accounting. In these areas, they should understand economic and accounting principles and practices, financial markets, banking, and financial data analysis and reporting. Consistent with this realm of knowledge, they should be skilled in mathematics and how to apply it on the job. Because they might use query software and numerous computer programs, they should be adept at working with computers and software and skilled at communicating results of studies. To communicate results of analyses, they should have knowledge of communications and media and able to inform using oral, written, and visual media. They must also have command of the English language.

According to the Bureau of Labor Statistics, most Financial Analyst positions require a bachelor’s degree, and there are various fields of study that could potentially provide the appropriate preparation for this career, including accounting, economics, finance, statistics, mathematics, and engineering. For advanced Analyst positions, employers often require a master’s in business administration (MBA) or a master’s degree in finance.

Advice on Becoming a Financial Analyst

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- Winnie Sun, Managing Director and Founding Partner at Sun Group Wealth Partners

A Financial Analyst's Salary Potential

Lowest 10th%
$47,230
Median
$81,590
Highest 90th%
$156,150

States with the Highest Employment Levels

STATES	2019 ANNUAL MEAN WAGE	NUMBER OF JOBS
California	$98,850	58,810
New York	$132,290	57,980
Texas	$87,750	40,460
Florida	$73,500	22,190
Illinois	$91,110	20,510

(Bureau of Labor Statistics)

How Do Your Skills Stack Up?

Day to Day Skill Set for a Financial Analyst

As reported by O*NET, these traits are ranked as either extremely or very important to the day to day life of an Analyst.

What You Will Learn With a Finance Degree?

Interested in a bachelor’s degree in finance? Schools with undergraduate finance programs may feature finance courses like:

Corporation Finance
Investment & Portfolio Analysis
Money & Banking
Managerial Economics
Statistics

Finance majors aren’t just good with numbers—they must also understand how mathematical principles apply to areas like business, investing, risk management, supply chains, and more. A bachelor’s degree in finance often includes basic math courses like accounting, statistics, and calculus, but in addition, students typically explore business finance strategies, portfolio management, international finance, and money markets. They may also delve into current issues and concerns in this field, like the social, legal, and ethical environments of business and finance. Basic business courses like management & leadership, information systems, and even business writing may help finance students develop a well-rounded perspective.

Who were some influential Financial Analysts?

According to Ranker's List of Famous Financial Analysts, the below people are renowned for being influential in shaping the financial world (in some way).

Meredith Whitney: Co-founder and CIO of Kenbelle Capital LP, earned a bachelors degree from Brown University in history
Abby Joseph Cohen: Former Chief Investment Strategist at Goldman Sachs, earned a master’s degree in economics from George Washington University
Mario Gabelli: Founder and CEO of Gabelli Asset Management Company Investors, received an MBA from Columbia Business School

FAQs About How to Become a Financial Analyst

What is the average salary a Financial Analyst makes?

According to the BLS, the 2019 median annual wage for Financial Analysts was $81,590.

What skills do Financial Analysts possess?

Analysts are usually proficient in areas such as complex problem-solving, critical thinking, mathematics, active learning, and time-management.

What are common types of software I would have to learn as a Financial Analyst

Financial Analysts use a variety of analytical, enterprise resource planning, and financial analysis software, including Palisade Evolver, Oracle PeopleSoft, and AnalyzerXL software.

How many financial analysts are employed in the U.S.?

According to the U.S. Bureau of Labor Statistics, 329,500 financial analysts were employed in the U.S. as of 2018. Employment for financial analysts is projected to grow 6 percent between 2018 and 2028—which is about average for all industries. This means that there could be 20,300 more jobs for financial analysts in the same time. The BLS reports that in 2019, financial analysts primarily worked in the following BLS-designated industries: securities, commodity contracts, and other financial investments and related activities; management of companies and enterprises; credit intermediation and related activities; the federal executive branch; and nondepository credit intermediation. New York, California, Texas, Florida, and Illinois had the highest levels of employment for financial analysts.

What professional licenses and certifications might a financial analyst pursue?

Many financial analysts become licensed and registered by the Financial Industry Regulatory Authority (FINRA). FINRA is an independent, nonprofit organization authorized by the U.S. Congress to protect investors. It helps ensure that the securities industry operates fairly and honestly. It requires financial analysts to register to work in many positions. In many cases, hiring companies sponsor registration for their financial analysts, so financial analysts may not have to be registered before pursuing a role.

Financial analysts may also pursue certification as a Chartered Financial Analyst through the CFA Institute. To do so, they need to have earned a bachelor’s degree, have four years of qualified work experience, and have successfully passed three exams. They might also pursue certification in a particular specialty such as financial planning, financial risk management, credit analysis, or corporate financial planning and analysis. For these specialties, financial analysts might pursue the Certified Financial Planner designation (CFA), the Financial Risk Management designation (FRM), the Certified Credit and Risk Analyst designation (CCRA), or the Certified Corporate Financial Planning & Analysis designation (FP&A) respectively.

Job information sourced from O*NET

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