How Do I Become A Financial Analyst?

"I would like to work in the financial services industry someday. I love to monitor the happenings in the stock market and am keenly interested in news about banks and other financial firms—that’s how devoted I am to it. I am currently contemplating my next move after I graduate from high school so that I can be on track towards fulfilling this dream. Can you please provide me with more information about this job? How do I become a financial analyst?"

asked by Brenna P. from Los Angeles, California

Obtaining the necessary educational qualification is the first step towards becoming a financial analyst. Aspiring financial analysts need to obtain a bachelor’s degree in finance, accounting or economics. A degree in math, engineering and statistics is also accepted. A master’s in business administration or MBA or a master’s degree in finance is an added credential and is even required by companies for those seeking higher positions.

To be an effective financial analyst, understanding the dynamics of the stock market, trading, valuation of bonds, pricing of options and management of risk is a must. These subjects will often be taught in school but finding information from other sources, like books other than textbooks and the business section of newspapers, will also help deepen the knowledge of an aspiring analyst. Internships often provide valuable first-hand industry experience to budding analysts.

After college, the graduate can seek an entry-level job in banks, mutual funds, brokerages and other financial institutions. While working, employers can then recommend the employee for certification. The Financial Industry Regulatory Authority or FINRA will grant the licenses to those who have satisfied various requirements. For financial analysts to obtain the Chartered Financial Analyst certification from the CFA Institute, for example, they need a bachelor’s degree, four-year work experience and must successfully hurdle three exams. There are also certifications for those who seek to become certified in a particularly field o investment.

While being educationally qualified is a necessity, financial analysts will only be able to go far in this career if they possess a high degree of analytical and math skills. This is because they will be synthesizing information from various sources to determine the best investments for their clients. They also need to quickly tap on their calculation and math skills to determine if potential securities still carry value. In addition, they must also have knowledge about computers and software programs that would calculate financial data, view trends and predict performance.

Paying attention to detail is necessary as seemingly minor issues can have large repercussions down the road. Financial analysts need to be decisive, even to the last second on whether they ought to purchase or offload a security. Once they make the decision, they must be confident that they have made the best choice given the circumstances. Finally, they must also have the ability to communicate their ideas well to their clients who may not be well-versed about the financial services industry. Simplifying highly technical jargon to layman’s terms is an integral part of the job and will help prevent misunderstandings between the financial analyst and his clients.

Career Spotlight: Financial Analyst

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