A career as a financial analyst is an exciting but demanding one well-suited for those who enjoy an intellectually challenging job that provides professional and financial rewards. Financial analysts gather and analyze information related to financial markets and trends and particular industries to provide businesses with guidance on investments and other financial decisions. They also assess the performance of stocks, bonds, and other types of investments to recommend investments and portfolios for individuals.
In addition to providing investment guidance, financial analysts may also assess a company’s overall financial health by evaluating sales, expenses and other financial performance data to determine its value by projecting future earnings. Analysts also may help a company develop and measure its financial goals and with its quarterly and annual financial planning.
Required Skills and Traits
Successful financial analysts have a high level of interest in financial markets and highly developed mathematical, analytical and technical skills to use advanced software to analyze data, forecast trends and build portfolios. They must also have a strong work ethic and be self-motivated. Financial analysts should also be detail-oriented since small or obscure pieces of information can sometimes have significant impacts on investments.
Analysts must also maintain a vigilant watch over financial trends, changes in the market and industry-related news. As a result, they typically spend a considerable amount of time doing research to stay current on this significant daily volume of information.
Financial analysts are often asked to make critical investment decisions involving large sums of money and high levels of risk. For analysts in certain industries, it’s not uncommon for them to have to make these types of decisions in seconds. Therefore, analysts must have confidence in their judgment and be comfortable making important decisions.
Education Requirements
Most financial analyst positions require at least a bachelor’s degree in accounting, business administration, economics, finance, statistics or a related field. However, many employers prefer or require a master’s degree in business administration or finance, particularly for advanced positions. In addition to financial markets and concepts, coursework should cover topics such as options pricing, bond valuation and risk management. Licensure and certification are valuable credentials for financial analysts who meet the work experience requirement.
Work Environment
Although some financial analysts work as consultants, most work at large financial institutions, often based in major metropolitan areas such as New York City. They may work for security and commodity brokerages, banks, investment management firms or insurance carriers. Others work in finance and accounting departments for major corporations overseeing the company’s financial planning and performance.
Financial analysts often work long hours, and according to the U.S. Bureau of Labor Statistics (BLS), over a third of all financial analysts regularly work 50 to 70 hours per week. Analysts also may be required to travel to evaluate companies and potential investments and often spend considerable time networking.
Job Outlook and Salary
According to data published in 2012 by the BLS, the median annual wage of financial analysts is $74,350. The BLS forecasts a 23% employment increase through 2020, which is faster than the average for all occupations. Some of this increase is driven by the increasing complexity of investment choices and markets, which has led to the demand for analysts with in-depth knowledge of financial concepts and investment strategies and options.
Despite the forecasted growth in employment and increase in the number of financial analyst jobs, there are still many more people interested in pursuing this occupation than there are available jobs. This means that competition is expected to remain high and graduate degrees, licenses and certifications can give candidates an edge over others with fewer credentials.
