Career Advice

Why Become a Financial Analyst? (And 5 Ways To Get a Job as One)

Financial analyst careers are among the most popular career paths in the field of finance. Financial analysts are needed by a range of firms to assess market data and suggest profitable ventures. Financial analysts make excellent candidates for careers in the finance industry.

In this post, we’ll talk about what financial analyst does, what their main duties are, what skills they need, and how to get started.

Who is a financial analyst?

A financial analyst, also known as an investment analyst or securities analyst, is a member of the finance industry that advises businesses on financial matters and market trends as well as the potential consequences of specific types of deals. Financial analysts do microeconomic and macroeconomic studies to forecast the performance of companies, markets, and industries. Financial analysts recommend actions a company ought to implement based on their study of data.

Government organizations, pension funds, banks, securities companies, insurance firms, mutual funds, and other businesses all employ financial analysts. A financial analyst may choose to focus on a specific area or nation. Typical categories of financial analysts include:

  • Risk analysts: These experts assess the risk associated with investing choices and pinpoint strategies to reduce possible losses.
  • Treasury analysts: These are professionals in finance and accounting who are in charge of managing an organization’s finances.
  • Financial analysts: Individuals of this kind assist firms in keeping track of their finances by ensuring a balanced budget.
  • Hedge fund managers: These experts give businesses advice on how to handle their short- and long-term hedge fund investments.
  • Portfolio managers: They are in charge of the overall success of an organization’s investment portfolio.

The steps to becoming a financial analyst

To seek a job as a financial analyst, follow these steps:

1. Earn a bachelor’s degree

The majority of financial analyst jobs demand a bachelor’s degree. Accounting, economics, finance, statistics, and mathematics are a few of the perfect academic specialties for this occupation. Consider getting a master’s degree as well. A graduate-level degree could be required by large companies or elite clients. A Master of Business Administration (MBA) with a focus on finance is often pursued by aspirant financial analysts.

Most businesses prefer candidates for financial analyst positions who have a master’s degree, but financial analysts are often needed to have at least a bachelor’s degree. For this role, bachelor’s degrees in business, finance, or a field that is closely associated are desired. Students who major in finance are equipped with the theoretical knowledge and analytical abilities necessary for this line of work. They might take courses in managerial finance, financial markets, accounting, international business, marketing, investment management, business law, ethics, and statistics as part of their finance degree program.

A master of business administration course of study should be taken into consideration by prospective financial analysts that have an interest in earning a master’s degree. Students can then select a finance specialty inside the curriculum.

2. Training

Since a financial analyst often holds a more senior-level post and needs at least ten years of experience, the majority of the training for the position will be acquired while working in other roles. Typically, aspiring financial analysts start by focusing on a particular area of investing. They frequently work as fund managers for private investors or portfolio managers for a company’s portfolio after gaining some expertise.

An internship can supplement a student’s formal education for those who plan on getting a bachelor’s degree in finance by giving them some practical experience.

3. Look into doing an internship

While pursuing their formal education, ambitious financial analysts can gain some real-world experience through an internship. You may connect with other financial experts who might help you get a career after graduation by building contacts with financial firms. Many businesses offer training opportunities so that students can learn from experts in the sector and get their questions answered.

4. Look for an entry-level position.

To obtain more experience and become eligible for certifications and licenses, seek out entry-level financial positions. Because employers frequently look for relevant work experience when hiring financial analysts, professional experience is crucial. Candidates that have experience in finance, accounting, or economics may be at a major advantage.

5. Earn a license

If you intend to sell financial goods, you must obtain a license to operate from the Financial Industry Regulatory Authority (FINRA) to work in various financial analyst roles. You might not have had this before starting an entry-level position because the majority of licenses require businesses to sponsor the candidates. These licenses are necessary for your financial analyst job to advance quickly.

6. Obtain a certification

For financial analysts, a variety of certificates are available. To be eligible for these credentials, you must have at least a few years of experience. For instance, the Chartered Financial Analyst (CFA) certification needs a bachelor’s degree in addition to four years of relevant job experience. Additionally, financial analysts might earn certification in their area of expertise.

Certifications attest to the analyst’s skills, provide them an edge over rival applicants, and increase their chances of moving up the corporate ladder. Preferable certifications consist of:

Chartered Financial Analyst

This credential, provided by the CFA Institute, assesses and confirms the proficiency and credibility of financial analysts. Candidates must pass three tiers of exams including topics like security evaluation, finance, accounting, money management, and ethics to earn this certification. A candidate must possess a bachelor’s degree, be in their final year of study, be in the program, or have a minimum of four years of work experience to be eligible to take the exam. They might also have four years’ worth of combined schooling and professional experience. The applicant must also reside in one of the participating nations, possess a valid passport, and pass an English proficiency test.

CPA: Certified Public Accountant

Accounting specialists who are dedicated to continuous learning and defending the public good are recognized by the CPA designation. Candidates must typically have a minimum of 150 hours of study in a semester, though prerequisites for certification may differ slightly from state to state. Additionally, several state boards demand that accountants have a minimum of two years of professional experience. Once students have the required training and education, they have to pass four tests in a specific order within 18 months of passing the first exam. CPAs are required to satisfy continuing education requirements to keep their certifications.

Tasks performed by financial analysts

Financial analysts develop financial models to forecast the result of corporate decisions. Their main duties are as follows:

Examine financial outcomes

Financial analysts can examine previous data and past outcomes after categorizing the data. Reviewing several metrics and ratios, such as the equity to debt ratio, the return on assets (ROA), the return on equity (ROE), the fixed vs. variable expenses, the gross margin, and the net margin are typical parts of this process. Additionally, they search for trends and evaluate performance against those of other businesses in the same sector.

Information organization

Financial analysts use a spreadsheet to arrange their relevant data after gathering it. They frequently provide expert reports and presentations using sophisticated spreadsheets, statistical tools, database systems, and other technologies. To make the spreadsheet simple to interpret, they typically arrange the values by group, add formulas or functions, and apply uniform formatting styles.

Gather data and information

Financial data and information are gathered by financial analysts. Data from accounting records, historical financial statements, industry studies, statistics, stock price information, and other quantitative information types may be included in this data. They gather data from a range of sources, including internal databases of the business, governmental organizations, and third parties. The data is then examined by financial analysts to discover societal and commercial patterns.

Make forecasts and projections

Financial analysts anticipate and project how the company could fare in the future after reviewing past data. The income statement, operational costs, expenses, sales, and cash flow of a corporation are all projected into the future. Then, they can utilize these projections to support financial choices.

Create financial modeling

Financial modeling is the process of putting the profits and losses of a business into a spreadsheet. Three financial statements are often linked at the beginning of these models, followed by layers of increasingly complex financial models, including internal budgeting models, models for discounted cash flow analyses, and models for leveraged buyouts. Financial modeling is a tool used by financial analysts to predict or explain how events, both internal and external, such as changes in economic regulations or policies, may affect a company’s stock price.

Develop suggestions

Most financial analysts are proficient with statistics and data. They can examine this data and offer analysis or suggestions on how to enhance a business’s operations. Examples of their suggestions include ways to raise income, lower expenses, enhance operational effectiveness, increase customer happiness, and gain market share.

Create presentations

Financial analysts create graphs and charts using the data they’ve studied. These images are frequently used for managerial presentations and pitch books. Key performance indicators (KPIs) or actual vs budgeted results are two more topics that financial analysts produce reports about.

Other duties that financial analysts perform are as follows:

  • Meeting with executives and senior management to have a better understanding of the prospects for an organization
  • Examining the financial statements of a business to establish its worth
  • Examining historical data, spotting trends, and offering suggestions for improvement
  • Assessing and reporting on a company’s financial performance by contrasting results with projections
  • Advising the organization on investments and portfolios
  • Conducting data mining, comparative company analysis (CCA), market research, and business intelligence
  • Building forecasts and models to keep the framework for financial analysis strong
  • Keeping track of a business’s investments and the current economic situation

Pay and employment Forecast for financial analysts

Financial analysts make an average of $71,293 annually. The geographic area, level of experience, and sector a financial analyst works in can all affect their income. By 2031, the United States Bureau of Labor Statistics (BLS) forecasts a 6% increase in employment for financial analysts. The BLS also projects that there will be roughly 41,000 vacancies for financial analysts yearly during this period, which is slightly below the median rate of growth for all occupations.

A finance analyst’s average annual pay

The geographical location and level of expertise of the financial analyst affect salary.

  • American average yearly wage: $71,511
  • Some people earn between $23,000 and $137,000 annually.

The work environment for financial analysts

  • Financial analysts often work full-time in workplaces that meet the requirements of:
  • Spending a lot of time at a desk
  • Using fax machines, printers, laptops, and other office supplies
  • Occasionally making trips to meet with businesses or clients

Financial analysts primarily work for investment firms, while some also work for enterprises, in the technical and professional services sector, or the insurance sector.

11 Different Types of Financial Analysts and Their Responsibilities

If you have an interest in this field, you might think about working as one of the various sorts of financial analysts listed below:

Treasury analyst

Treasury analysts frequently work for businesses and governmental organizations. They are in charge of monitoring and controlling how an organization’s finances are used, including investment revenue, asset and obligation levels, credit, and cash flow. They might also make suggestions about how a business can keep or strengthen its financial stability. A treasury analyst may also be responsible for the following tasks:

  • Making predictions regarding future costs and earnings
  • Generating information on particular financial instruments
  • Creating several investment plans
  • Presenting findings to business leaders
  • Making suggestions for new and existing financial management techniques
  • Collaborating with more investment managers and the finance divisions

Investment banking analyst

Analysts in investment banking assist businesses in creating or maintaining profitable investments. They evaluate a company’s requirements, define its objectives, and search for prospective investment options. If the business already has investments, it may assess them to see which ones are doing well and which ones it should think about replacing. Other tasks carried out by financial analysts include:

  • Completing a thorough valuation analysis that includes transaction comparability, discounted revenue, leveraged acquisition analysis, and trading comparable
  • Developing and utilizing financial models, as well as other financial analysis
  • Designing presentation materials for critical client conversations and other pertinent transactions
  • Helping the senior team with customer coverage projects
  • Executing client transactions
  • Assisting with project coordination
  • Performing market and product research

Hedge fund supervisor

Hedge fund managers offer guidance to businesses on how to handle their short- and long-term hedge fund assets. A hedge fund is created when investors pool their funds and invest heavily in a variety of financial assets, such as bonds, shares, and commodities. Hedge fund managers inform their clients about fee schedules and liquidity to help them choose the investments that would yield the highest returns.

To gather information, and determine which investments have performed well and which potential investments their customers should follow, hedge fund executives may employ sophisticated financial tools. To evaluate whether any adjustments or account reconciliations are necessary, the hedge fund manager also routinely reviews their clients’ spending and account accruals. Hedge fund managers also have the following responsibilities:

  • Giving clients financial advice based on expectations and risk requirements
  • Keeping track of investment performance and making a stock purchase or sale decisions
  • Interacting with prospective investors to join the hedge fund
  • Updating hedge fund investors on their financial progress and strategy
  • Maintaining knowledge of state laws and regulations

Risk analyst

Risk analysts support businesses that want to invest in or grow into new geographies or markets. They evaluate strategies and offer financial guidance to boost or maintain revenues, reduce risks, and foster growth. Risk analysts also conduct in-depth research to assist businesses in making wise financial decisions. A risk analyst may also be responsible for the following tasks:

  • Collecting economic data from businesses and industry sectors
  • Analysis of statistical and financial reports
  • Finding information from sources like libraries and governmental records
  • Carrying out risk analysis for businesses and organizations
  • Delivering corporate training to educate staff on risk awareness

Equity research analyst

An equities research analyst is employed by the securities business for both buy-side firms, like a bank or brokerage, and sell-side firms, like a pension plan or an investment management company. They produce analyses, recommendations, and forecasts concerning stocks and businesses. An equity research analyst typically focuses on a select few businesses in a specific nation or sector. An equities research analyst also handles the following tasks:

  • Monitoring customer portfolios of investments
  • Making final choices on the securities you will hold
  • The creation of reports outlining their suggestions
  • Discussing their findings with bosses at a meeting
  • Tracking financial data with software

Ratings analyst

The capacity of businesses or governmental entities to repay their debts, including bonds, is evaluated by rating analysts. These ratings aid investors in assessing the risk involved in picking a particular business, industry, or investment product. Other tasks carried out by a ratings analyst include:

  • Examining revenue, liabilities, assets, debt repayment history, and other pertinent data to assess credit risk
  • Comparing credit reports and finding inconsistencies and differences
  • Constructing models and spreadsheets to aid in the analysis of credit applications both new and old
  • Analyses results are compared to industry data standards to assess an organization’s competitiveness and financial health.

Portfolio manager

For their clients, portfolio managers design and oversee investment plans. To locate investment prospects that can assist customers in achieving their goals, they might collaborate with other financial analysts. A portfolio manager’s additional responsibilities and tasks include:

  • Keeping up with financial market developments
  • Knowing recent events
  • Keeping an eye on the general economic picture
  • Examining industry trends and changes
  • Determining the financial objectives of the customer and looking into the best investment alternatives
  • Working along with other financial specialists to choose which stocks to buy

Financial planning and analysis (FP&A) analyst

A financial planning and analysis (FP&A) analyst evaluates a company’s operations using both qualitative and quantitative analysis to determine how well it is doing in terms of achieving its objectives and creating future plans and objectives. They study business and economic developments, examine past firm performance, and attempt to foresee potential issues or roadblocks. FP&A analysts may also conduct the following tasks:

  • Being in charge of a variety of financial matters, such as income, taxes, investments, capital expenditures, and financial statements
  • Identifying the products that contribute the most to its net profit
  • Examining and evaluating each department’s cost-effectiveness inside a corporation
  • Collaborating with other departments to develop budgets and combine them into a single budget
  • Creating internal reports for executives and business executives and assisting with decision-making
  • Creating, maintaining, and upgrading financial models

Corporate development analyst

An analyst for corporate development is in charge of raising revenue and streamlining business operations. Additionally, they evaluate finances and corporate operations, look into sales prospects, and enhance business plans. They might also carry out the following tasks:

  • Keeping track of company information
  • Interpreting data
  • Creating suggestions for extending reach to new client segments
  • Helping to identify and analyze business mergers and acquisitions
  • Performing competitive market research

Financial qualitative analyst

Financial qualitative analysts analyze financial possibilities, make financial judgments, and evaluate the performance of bonds, equities, and other types of investments. They assist people and businesses in making decisions on whether to hold, buy, or sell a security by outlining their recommendations to them. Financial qualitative analysts frequently make snap judgments when trading. Financial qualitative analysts also carry out the following responsibilities:

  • Promoting investment portfolios or individual investments
  • Evaluating past and present facts
  • Researching commercial and financial trends
  • Evaluating a company’s value by examining its financial accounts and projecting its future revenue
  • Meeting with company leaders to learn more about the company’s future
  • Creating reports in writing

Budget analyst

By keeping a balanced budget, a budget analyst assists businesses in keeping track of their finances. They prepare regular financial reports, consult with executives about funding requirements, and assess budget choices for unique initiatives and one-time costs. Budget analysts examine recent and historical spending, assist businesses in setting future plans, and weigh the advantages and disadvantages of major acquisitions. Other tasks carried out by budget analysts include:

  • Creating program and departmental budgets in collaboration with management
  • Verifying that budget plans are accurate and by all applicable laws and regulations
  • Analyzing information and creating routine financial reports
  • Making recommendations for spending and planning based on data for business leaders
  • Assisting business owners in coming up with alternate options if the suggested spending plan or plans don’t fit their needs


Becoming a financial analyst can be a rewarding and fulfilling career choice for individuals with a strong interest in finance, analytical thinking, and problem-solving. The role offers a unique opportunity to work in the dynamic world of finance, analyzing market trends, evaluating investment opportunities, and providing valuable insights to support financial decision-making. The demand for financial analysts is expected to remain high as companies across industries rely on their expertise to navigate complex financial landscapes.

The potential for career growth, competitive salaries, and the ability to make a significant impact in the financial realm make it an appealing career path. Whether working in corporate finance, investment banking, consulting, or other financial sectors, financial analysts play a vital role in shaping the financial health and success of organizations. If you have a passion for finance, a knack for numbers, and a desire to make a tangible difference in the business world, pursuing a career as a financial analyst may be the right choice for you.

Frequently Asked Questions about Financial Analysts

  • What qualifications do I need to become a financial analyst?

To become a financial analyst, you typically need at least a bachelor’s degree in finance, accounting, economics, or a related field. Some employers may require a master’s degree or professional certifications such as Chartered Financial Analyst (CFA) or Financial Risk Manager (FRM) designation.

  • How can I gain relevant experience to become a financial analyst?

To gain relevant experience, you can consider internships or entry-level positions in finance-related roles, such as financial analysis, investment banking, or consulting. Networking, participating in financial competitions, or taking on finance-related projects can also help you build your experience.

  • What skills are important for a career as a financial analyst?

Key skills for financial analysts include analytical thinking, financial modeling, data analysis, problem-solving, and strong knowledge of financial concepts. Additionally, good communication skills, attention to detail, and the ability to work under pressure are important in this field.

  • How can I enhance my financial analysis skills?

You can enhance your financial analysis skills by pursuing certifications like CFA or FRM, attending workshops or seminars, and taking online courses or specialized training programs in financial analysis. It’s also beneficial to stay updated with industry trends, read financial reports, and practice financial modeling and data analysis.

  • What career advancement opportunities are available for financial analysts?

Financial analysts can advance in their careers by gaining experience, developing expertise in specific industries or sectors, and pursuing advanced education or certifications. With experience, financial analysts can move into senior analyst roles, become portfolio managers, or transition into management positions within finance departments or investment firms.

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