Financial analyst: career path and qualifications

Financial analysts produce financial plans, forecasts and analysis reports for companies, public and private organizations, and individuals to use in investment decisions. Depending on the type of analyst’s job, responsibilities can vary greatly.

Some financial analysts work in the securities industry, analyzing stocks, bonds, and other securities for banks, brokerage companies, money management companies, and other organizations. These financial analysts usually develop expertise in narrow stock or bond categories, such as Canadian corporate bonds or technology stocks.

Other financial analysts work for large companies, analyze internal financial data and formulate financial plans, revenue and expenditure forecasts, and provide company executives with budget and investment decisions. Non-profit organizations and government agencies also hire financial analysts for this type of work.

Key points

  • Financial analysts screen data to help companies make business decisions or investors to take actions, such as buying and selling stocks or other securities.
  • They weigh macroeconomic and microeconomic issues and company fundamentals to make predictions about companies, sectors, and industries.
  • A bachelor’s degree in mathematics or finance is given, and progressing to an advanced level means obtaining a certificate and/or MBA.
  • Freshly graduated college graduates may start at the junior level under the supervision of more senior analysts.
  • People with several years of experience, multiple key certifications, and MBA degrees from prestigious universities can be promoted to senior positions.

Career path

Recent bachelor’s degree graduates who want to become financial analysts can expect to start in junior positions under the guidance of senior analysts. After several years of experience, many junior financial analysts consider returning to graduate school for advanced degrees. Although junior analysts are not prohibited from being promoted, continuing to be promoted to positions with greater responsibilities usually requires returning to school. Graduates with a master’s degree are expected to start working as senior financial analysts or to be promoted to this position soon.

With more extensive experience and expertise, senior financial analysts can continue to hold supervisory positions. Senior analysts in the securities industry are usually promoted to portfolio managers or fund managers who oversee a team of senior analysts. There may also be opportunities for senior management positions. In the corporate world, senior analysts can become financial managers and oversee work groups within their departments. High performers may be promoted to chief financial officer (CFO) or chief investment officer (CIO), responsible for all financial activities of the company.

Senior financial analyst positions usually require an MBA or a master’s degree in finance with appropriate subject focus.

Educational requirements

Although a bachelor’s degree is the minimum requirement for entry-level financial analyst positions, data collected by the US Bureau of Labor Statistics (BLS) shows that a master’s degree is usually more suitable for permanent and senior positions in the field.

Various undergraduate subjects are generally accepted by employers, including business fields such as finance, accounting and economics. Due to the importance of advanced quantitative skills in the field, bachelor degrees in statistics, mathematics, engineering, and physics are not uncommon among financial analysts. However, applicants with these degrees can benefit from business courses, especially in accounting and finance.

83,660 USD

According to data from the US Bureau of Labor Statistics (BLS) in May 2020, the median annual income of financial analysts of all experience levels.

The rise of robo-advisors

Other qualifications and skills

Some financial analysts must obtain appropriate licenses from the Financial Industry Regulatory Authority (FINRA), which is responsible for setting and enforcing rules for securities companies and brokers operating in the United States. A license usually requires sponsorship from the hiring company, so most financial analysts can only obtain a license after they start working. However, long-term employment may depend on successfully obtaining a license.

Many employers want financial analysts to be certified in this field. The outstanding certification in this field is the Chartered Financial Analyst (CFA) title awarded by the Chartered Financial Analyst (CFA) Association. It is suitable for financial analysts with at least three years of qualified work experience. Therefore, it is generally regarded as a qualification for promotion to a more senior financial analyst position. Eligibility for this title also requires a bachelor’s degree and passing scores in a series of three exams administered by the CFA Institute.

According to the latest information from the US Bureau of Labor Statistics, the recruitment of financial analysts is expected to increase by 5% between 2019 and 2029, which is higher than the average growth rate for all occupations.

Financial analysts usually need to introduce and explain their work to clients and superiors, so strong communication and presentation skills are essential. Analytical and critical thinking skills are essential for evaluating alternatives and determining final recommendations.

In addition to statistics, mathematics, and finance, experience in using software tools related to these disciplines is also valuable. Although it is not uncommon for employers to use highly specialized technologies and proprietary tools that are not available outside the company, learning and relying on the skills provided by complex quantitative software can be well transformed into other systems.

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