What Is a Financial Analyst? (+ How to Become One)

 

What Is a Financial Analyst? (+ How to Become One)


Financial analysts provide informed advice to businesses and individual investors on important investment decisions. Find out what a financial analyst does and how to get started in this career.

 

What is a Financial Analyst?

Financial analysts provide businesses and individual investors with informed advice on important investment decisions by analyzing economic trends and current market conditions. They conduct research to develop strategies for their customers. To become a financial analyst, you must be able to work with data and use mathematics to analyze it.

Financial analysts may work for financial companies, such as banks or investment companies, or within corporations. They typically have university degrees in finance, economics, accounting, and statistics. If your skills match your desire to work in this field, this can be an exciting and well-paying career.

 

What does a Financial Analyst Do?

Financial analysts work with data to help organizations make business decisions. Details may be different, but it is usually stipulated that financial analysts will perform the following tasks:

• It helps to make a commercial decision by predicting trends and creating a financial model to provide commercial scenarios and other data tests.

• Study economic and commercial trends, including promotion and bond effectiveness, to secure commercial solution context

• Supports budgeting efforts in the organization

• Create a written report on financial law and recommendations

 

Financial Analyst Salary and Job Outlook

According to the US Statistics Bureau (BLS), the average salary of financial analysts is $ 95,570 per year. This amount may vary depending on your location, education and experience. Financial analysts should be in demand in the next few years. BLS estimates that the position will increase from 9 % from 2021 to 2031.

 

Types of Financial Analysts

A financial analyst may be classified into two categories: buy-side analysts and sell-side analysts.

• Buy-side analysts develop investment strategies for companies that purchase securities and other assets for asset management purposes. Commonly referred to as institutional investors, these companies include mutual funds, hedge funds, insurance companies, independent wealth managers, and nonprofit organizations.

• Sell-side analysts assist and advise financial services distributors who sell stocks, bonds, and other investments.

 

Financial Analyst Skills

In principle, financial analysts need the following skills to succeed:

Technical Skills

• Knowledge of accounting

• Analysis capabilities

• Financial literacy

• Data analysis

• Knowledge of business finance

• Knowledge of financial software

• Budget management training

• Financial information skills

• Research skills

• Financial analysis skills

 

Labor Skills

• Communication

• Negotiations and impacts

• Critic heart

• Flexibility

• Sustainability

• Cooperation

• problem solving

 


How to Become a Financial Analyst

Success as a financial analyst requires basic qualifications such as experience, skills, and knowledge. The guide at the start of this career.

 

1. Earn a Degree

Entry-level financial analysts typically have advanced degrees, with 76% of professionals holding a bachelor's degree and 16% holding a master's degree. Earning a degree in finance, accounting, economics, or a related field will prepare you for a career as a financial analyst. If you are looking for more opportunities or higher salaries, it may be useful to obtain a master's or business management (MBA) in finance.

 

2. Improve your Skills with Online Courses

Take courses to enhance your knowledge in skill areas:

• Consider earning the IBM Data Analyst Professional certification to enhance your data analysis skills.

• Majored in Financial Literacy at the University of Illinois.

• Learn how to create financial and quantitative models, a specialty designed for analysts, from UPenn Wharton.

 

3. Obtain the Certificate

Some companies prefer to hire financial analysts who are certified by the Chartered Institute of Financial Analysts. Analysts who specifically want to work in the securities field can also take the FINRA Series 7 and 63 exams to prepare for open positions.

 

4. Gain Work Experience

Apply for internships at companies that match your industry interests. Internships provide you with experience, knowledge, and networking opportunities in the financial industry that can help you find a job later on, and in some cases, at the same company. Entry-level positions are typically reserved for analysts starting or changing careers.

If you're already working, you may want to move on, but finding a job may be more difficult without relevant experience. When looking for a job, look for the following titles, which typically indicate an entry-level position:

• Junior financial analyst

• Junior financial analyst

 

5. Prepare your Job Search

Search for open positions on job sites like LinkedIn and Indeed. Prepare for the interview by anticipating the questions and preparing possible answers in advance.

Interview questions include:

• What is your experience in data analysis?

• What are you doing to keep abreast of industry developments?

• How do you prepare quarterly sales reports?

• What do you do if you discover a misstatement in your financial statements?

• What is EBITDA?

• Explain the moment you reach something like a team.

 

Financial Analyst Career Paths

These careers can be viable options for people with similar skills to financial analysts.

• Portfolio managers research the market and collaborate with other financial professionals to identify the best investment opportunities and solutions for the company's business portfolio. Their deep understanding of current business trends allows them to more accurately predict the future of the market. 

Portfolio managers use this knowledge to help companies and individuals make investment decisions.

• Fund managers primarily deal with hedge funds or mutual funds. They are always aware of the fund's overall objectives and market trends, which helps them make the right decisions.

• Rating analysts evaluate a company's market, financial capabilities, and strategy and make informed recommendations on how the company should proceed.

• Risk analysts combine business and financial knowledge to help companies determine the level of risk when making potential investment decisions. They make recommendations based on their analysis and help companies track and minimize financial losses. 

Risk analysts are often responsible for estimating and reporting asset losses, monitoring investment trends, and collecting and analyzing data. The above jobs are typically entry-level or mid-level positions.

Financial analysts can become senior financial analysts by managing analysts and interns and overseeing larger projects. You can then become a manager, director, or even director of finance (CFO).


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