How To Become A Financial Analyst
A financial analyst is responsible for helping others to make financial investment decisions. Their clients may include individuals as well as businesses. They use their past experiences, knowledge, data, research, and other factors to determine what investments a person should make.
They work with stocks, bonds, and other types of investment opportunities. In order to become a financial analyst, a person must have at least a bachelor’s degree and a license in their field.
Why Become A Financial Analyst
Financial analysts evaluate investment opportunities for the clients that they work with. They may be employed in a wide variety of settings, including insurance companies, mutual funds, banks, securities firms, and more.
Financial analysts have a wide range of duties. They meet with clients and companies in order to better understand their needs. This typically involves a lot of traveling in order to meet with clients. They study economic and business trends, and evaluate historic financial data. Based upon this information and their expertise, they can recommend a variety of investment portfolio decisions to clients, such as stocks and bonds. A financial analyst is trusted by businesses and companies to make smart investment decisions.
This is a good job for somebody who enjoys working with data, is analytical, wants to help people make smart decisions with their money, and enjoys working with people.
Financial Analysts should possess the following qualities and skills:
- Detail oriented
- Business skills
- Good communicator
- Computer Skills
Financial Analyst Work Environment
Financial analysts work primarily in an office environment, where they meet with clients, conduct research, and work on the computer analyzing data. There are certain parts of the country where financial analysts are more likely to find a job, such as New York City, due to the large amount of financial centers there.
Financial analysts are often in meetings or giving presentations. Their work involves traveling frequently to meet with clients. Financial analysts have a hectic work schedule, and many work over 40 hours a week in order to meet the demands of their job.
Financial Analyst Salary
The median pay for financial analysts was $84,300 in May 2017 according to the United States Bureau of Labor Statistics. There are many factors that determine the salary of any given profession. For financial analysts, the field in which they work plays a large role in determining salary.
For example, those who choose to work in securities, commodities, and financial investments earned a median salary of $100,000 in 2017.
On the other end of the spectrum, those who worked for credit intervention and insurance carriers earned about $80,000 annually. Be sure to think about what type of environment you would prefer to work in when applying for a job as a financial analyst.
Average Financial Analyst Annual Salary
The average annual salary for financial analysts is $99,430 a year. Salaries start at $51,780 a year and go up to $165,580 a year.
Average Financial Analyst Hourly Wage
The average hourly wage for a financial analyst is $47.80. Hourly wages are between $24.89 and $79.60 an hour.
Stats were based out of 294,110 employed financial analysts in the United States.
Highest Paying States For Financial Analysts
- 1. New York $64.69 / hr $134,560 / yr
- 2. Wyoming $53.47 / hr $111,210 / yr
- 3. Colorado $53.02 / hr $110,290 / yr
- 4. California $52.68 / hr $109,580 / yr
- 5. Alaska $52.56 / hr $109,330 / yr
Top Paying Cities For Financial Analysts
- 1. Missoula, MT $74.51 / hr$154,980 / yr
- 2. Boulder, CO $72.36 / hr$150,510 / yr
- 3. Waco, TX $69.69 / hr$144,960 / yr
- 4. New York, NY $66.32 / hr$137,940 / yr
- 5. San Francisco, CA $64.89 / hr$134,980 / yr
Data provided by the Bureau of Labor Statistics (BLS).
Financial Analyst Career Outlook
Employment for financial analysts is expected to increase by 11 percent from 2016 to 2026. This rate of growth is faster than most other occupations within the United States. Overall about 32,000 new jobs for financial analysts are expected to be created within this 10 year time period.
When economic activity within a country is good, demand for financial analysts tends to grow as well. Financial analysts help new businesses evaluate their investment opportunities and they also help existing businesses to reassess their options.
As technology improves as a rapid rate and companies become more interested in the use of big data, financial analysts will be able to use these tools to conduct higher quality financial research for companies.
Financial Analyst Degree
A financial analyst is required to have a bachelor’s degree in order to pursue this profession. Many colleges offer programs that would be perfectly suited to a career as a financial analyst. Some such programs include accounting, economics, finance, statistics, and more. In these classes, students will take lecture style courses. It is a great way to learn if being a financial analyst is truly something you want to do. It takes four years to earn a bachelor’s degree.
Once employed, a financial analyst can earn their license. The Financial Industry Regulatory Authority (FINRA) licenses financial analysts. Financial analysts are required to have a license in order to sell stocks, bonds, and other portfolio items.
Financial Analyst Coursework
Financial analysts take many different kinds of classes during college. Below we have listed a few examples of the types of classes a financial analyst may be interested in taking. These will be very beneficial in their pursuit of this career path.
Accounting: Students will be introduced to the basic accounting principles. They will learn how to analyze, summarize and report financial information. Students will learn how to prepare financial statements and understand how finances play a role in decision making. They will also gain awareness of the ethical considerations as part of accounting.
Economics: Students should take classes in both macroeconomics and microeconomics. In these classes, students will learn about demand and supply; scarcity and choice; money banking, and monetary policy; international economics and current economic problems; consumers, firms, financial markets, and income distribution.
Mathematics: Students will benefit from taking a variety of mathematics classes in college, including calculus, multivariable calculus, linear algebra, business mathematics, statistics, and other similar courses.
Financial Analyst Career Path
Financial analysts have many opportunities for career growth. Once you have some years in an entry-level position, you can begin to look for ways to advance your position.
Below we have listed a few examples of advancement opportunities for financial analysts. Keep in mind these are only a few ways in which you can grow inside of your career.
|Portfolio Manager||A portfolio manager is responsible for handling a company’s investment portfolio.||These managers select a mix of stocks, bonds and other investments that will be most appropriate for the client. They are responsible for their client’s financial success.||Bachelor’s degree required, licensure and certification||This is a good job for somebody who enjoys working in a management position|
|Risk Analyst||A risk analyst evaluates investment decisions and which would have the most beneficial outcomes.||The finance world is risky because you are making decisions with another person’s money. A risk analyst decides which investments are worthwhile and how to limit potential losses in the economic market.||Risk analysts need a bachelor’s degree, a license and a certification.||This is a good choice for somebody who enjoys doing research and carrying out a risk-loss assessment for their clients.|
Related Financial Analyst Careers
Financial analysts have great careers. If you are interested in becoming a financial analyst, there are many other careers to consider as well. Below we have listed just a few related professions.
Financial Advisor: Financial advisors provide advice of investments, insurance, mortgages, estate planning, retirement, and more to their clients.
Financial Manager: A financial manager is responsible for the finances within a company. They analyze data, produce financial reports, give presentations to stakeholders, and develop strategies for short-term and long-term financial goals of the company.
Insurance Underwriters: Insurance underwriters work at insurance agencies. They evaluate incoming insurance applications of all kinds and decide whether to provide insurance to applicants. They determine coverage amounts and the terms of insurance.