How to Begin a Professional Career as a Financial Analyst

How to Begin a Professional Career as a Financial Analyst
Financial Analyst: A Quick Look
Median Salary $76,950 per year
$37.00 per hour
Entry-level Education Bachelor’s degree
On-the-job training No
Primary employers Financial Investment, Professional Services, Credit intermediation
Number of positions (U.S.) 253,000
Job Growth (2012-2022) 16% (Quicker than the national average)
New positions (2012-2022) 39,300

How to Begin a Professional Career as a Financial AnalystWhat Does a Financial Analyst Do? Financial analysts assist individual clients or entire organizations in deciding how to best invest their money for the greatest return. These professionals do so by analyzing, assessing, and forecasting the profitability of various investment options (such as stocks and bonds). Read more

Salary According to data from the Bureau of Labor Statistics as of May 2012, Financial Analysts in the U.S. earned a median yearly wage of $76,950. That rate sits far higher than the average yearly median wages for all occupations throughout the United States. Read more

Becoming a Financial Analyst All employers require that professional Financial Analysts at least fulfill the entry level educational requirements to attain such a position. This career requires a bachelor’s degree in a major relevant to the job requirements. Such field of study include accounting, economics, and statistics. More and more employers now require that Financial Analysts hold a master’s degree in fields such as Business Administration or in Corporate Financing. We commonly refer to these programs as an MBA. Employers and states typically don’t require certification to become a Financial Analyst. But, we strongly recommend it to give you an advantage over the competition in the job market. You can read all about How to Begin a Professional Career as a Financial Analyst in this job post. Read more

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Job Outlook The government expects Financial Analysts to grow at a pace of 16 percent over ensuing decade. This rate sits a few percentages higher than the national average of 11 percent and should result in roughly 39,000 new jobs within the aforementioned time frame. Financial Analysis may not be booming like jobs in the technical and health care field. This career still remains incredibly viable and lucrative. Read more

Financial Analyst 2012 Data from the BLS shows that Financial Analysts earn a median yearly wage of $76,950. That rate sits much higher than the average yearly median wage for all US occupations ($34,750). At the same time, the wage sits higher than the average median salary per year for occupations within the field of business and finance ($62,500). Without a doubt, Financial Analysts serves as a well-paying, middle class career track. And although the bottom ten percent of FA earners take home less than $47,130 per year on average (which is primarily comprised of younger employees within this profession), the top 10 percent earn a cool $148,430 per year on average. Considering the field's rate of growth, the education requirements, and the lax requirements (or lack there of) for license/certification, this profession compensates its worker quite handsomely. Salaries in this field also vary depending on the employee's industry. Certain fields pay Financial Analysts better than others. According to the BLS, the financial investment industry (securities and commodities) tend to pay FA's the most. Median annual wages in this field hover around the $90,560 mark. Median annual salaries tend to fall around $75,000 in the professional, scientific, and technical services industry. Financial Analysts working with an insurance company tend to earn the lowest annual median wage at $72,200 (which is still quite high compared to the national average). Here is the complete list of industries and their median yearly salaries.

  • Securities and commodities $90,560
  • Professional, scientific, and tech services $75,920
  • Credit intermediation $75,300
  • Management of corporations and other organizations $75,200
  • Insurance carriers $72,270
Almost all Financial Analysts work full time in the U.S. Based on findings from the BLS, roughly one third of these workers worked over 40 hours most work weeks through the year.  

How to Begin a Professional Career as a Financial Analyst A bachelor's degree in accounting, economics, statistics, math, engineering, or finance serves as the entry-level educational requirement to become a Financial Analyst. These days, more and more employers require their candidates also hold a master’s degree in Business Administration or Finance (commonly referred to as an MBA). Young Financial Analysts who are just starting out must possess a solid working knowledge of risk management, pricing options, and evaluating bonds. In order to further a career as a Financial Analyst, one must first begin with a solid foundation. Financial Analysts should specialize in a particular field of investment. Following this choice, the young FA to be should begin accumulating professional experience and eventually take over management of an investment portfolio. This managerial role requires that employees coordinate a team of peers in order to determine the investment that will reap the biggest benefits for the company’s portfolio. Alternatively, FA's may develop their career to become an individual investor’s fund manager and oversee large investments for a particular client. Certification is not mandatory for career advancement. However, we certainly recommend it. Certification allows a FA a certain 'leg up' over the competition on the job market. It could also mean the difference between attaining a promotion or not. Several certifications are available for experts in this field depending on a financial analyst’s chosen specialization. The CFA (Chartered Financial Analyst) certification serves as one of the best known forms of certification for Financial Analysts and is awarded by the CFA Institute. In order to obtain it, a FA must possess a bachelor’s degree, at least 4 years of experience in the field, and proof of passing the three different exams.

Financial Analyst Job Description In a sense, Financial Analysts help individual clients or entire corporations decide how to best invest their money. A FA must be able to analyze, assess, and forecast the profitability of various investment options such as securities (which include stocks and bonds). A Financial Analyst's typical work day may include any of the following duties:

  • Recommend opportunities for individual or collective (portfolio) investments
  • Research the performance of investment opportunities, based both on data from the present, as well as from historical sources
  • Research trends in macro-economy, as well as in business
  • Assess and determine the performance and financial worth of a business enterprise, based on its financial statements
  • Determine the financial prospects of a particular company through discussions and interviews with company representatives
  • Write comprehensive, well-structured financial reports for their clients
  • Recommend and explain investment options to their clients
This position demands quite a bit from its employees. It is also incredibly competitive. Successful Financial Analysts must possess an important set of skills. These skills include the ability to properly analyze investment-relevant information, communication and decision-making skills, mathematical literacy, computer knowledge, and an eye for detail. A lot of investment decisions are based on information that is not immediately evident or available to the majority. Good financial analysts must be able to piece this kind of information together to make informed decisions. In terms of work environment, Financial Analysts in the U.S. work for a large number of companies or organizations in various fields of work. Mutual or pension funds, banks, and other credit institutions (such as insurers) employ many Financial Analysts. Alternative titles for a FA include Security Analyst or Investment Analyst. By and large, we can divide Financial Analysts into two main categories: those on the buy-side (who work for institutions that invest (such as mutual funds, hedge funds, money management companies, insurers, and not-for-profit organizations)) and those on the sell-side (which consist of agents or organizations who seek to sell bonds, stocks, and other financial investments). Some FA's cannot be classified as either buy-side or sell-side since they work for specialized media outlets which cover particular investments. Since the financial market is ample, stratified, diverse, and dynamic, Financial Analysts are specialized into a particular industry niche, geographic region, or in relation to a specific product. For instance, some FA's may be experts in Middle Eastern markets. Others have worked exclusively within the oil industry. Still, others are specialized in beauty products. This type of specialization is necessary because Financial Analysts must know how policies, laws, business trends, and even foreign politics affect their field of expertise. Given the wide array of specialization into a field of Financial Analysis, these specific professionals can bear different titles. Certain employers may refer to them as portfolio managers and place them in charge of deciding what products their company should invest in. Portfolio managers also must explain these investment decisions to board members and investors. Fund Managers serve as Financial Analysts who only work with mutual funds, investment funds, or hedge funds. Rating Analysts determine how likely a particular company or state government is to pay off potential debt. Finally, employers place Risk Analysts in charge of evaluating the financial risk that an investor exposes themselves to. Their advice helps alleviate and minimize any risks.

Job Outlook The average rate of growth for all occupations in the United States currently stands at 11 percent according to the Bureau of Labor Statistics. However, the field of Financial Analysts should develop at a quicker pace of 16 percent over the upcoming decade. We feel that this expected growth in the number of jobs is due to an increasing need for in-depth know-how within various areas of business around the globe. At the same time, the level of investment portfolio complexity increases everyday (and will likely continue to do so). The heightened complexity brings about a need for specialized Financial Analysts. The reform in financial regulations by the U.S. should increase the need for well-trained financial analysts. Banks can no longer trade as freely under the new rules. We believe that hedge funds and private equity companies will recruit Financial Analysts to combat this difficulty. The job market in the field is expected to remain very competitive given Financial Analysts’ high salaries and overall job appeal.  

 

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