To become a Financial Analyst you have a keen interest in analyzing industries and making decisions to help investors.
The financial analyst is a rare breed and puts you in a niche that often leads to other career opportunities. Becoming an analyst can be challenging and you’ll need to be ultra competitive, but as you might expect the rewards are high. To discover if this career is for you, take one of our quizzes.
To become a financial analyst, applicants usually require a bachelor’s degree, though often a master’s degree is needed for more advanced positions. There are several appropriate academic preparation tracks such as general finance, accounting, statistics, economics, or mathematics, but for advanced positions, an MBA (master’s in business administration) or a master’s degree in finance is required. Additionally, knowledge of bonds valuation, options pricing, and financial risk management are helpful to get a good position. You can see if this track is something for you by taking a free career test.
Financial analysts are providing information and guidance to companies and individuals so they can make educated investment decisions. Financial analysts evaluate and assess performances of bonds, stocks, or any other type of investment. Financial analysts in general study business and economic trends, they determine a company’s value by studying financial statements and determine its value.
These professionals evaluate new and old data to see trends, and recommend investments to individuals and organizations regarding their portfolios (collections of investments). Sometimes they meet with company officials in order to get a better understanding and idea of the company’s management, direction, and prospects. and management. They also may contact investors to explain their recommendations, and will be preparing written reports.
Financial analysts are typically evaluating investment opportunities. These professionals are working at pension funds, banks, insurance companies, securities firms, mutual funds, or some other related business. They are referred to as investment or securities analysts as well. We can divide these professionals in two main categories, the sell-side analysts, and the buy-side analysts.
Sell-side analysts are providing advice and financial services to sales agents who are in the business of selling bonds, stocks, or some other investments, while buy-side analysts will be developing investment tools and strategies forganizations and companies that possess of great sums of money for invest purposes. These so-called institutional investors are mostly hedge funds, mutual funds, pension funds, insurance companies, assets managers, or nonprofits organizations with large endowments, for example some universities.
Some financial analysts concentrate on trends that will affect a geographical certain region, a specific industry, or a particular product type. Some analysts may thus focus on a certain world region such as Latin America, some may concentrate on the energy industry, while others focus, for example, on the market of foreign exchange. They all have one thing in common, though, they must all be able to understand how policies, new regulations, and economic and political trends are likely to affect investments.
Investing has become a global activity, and there are financial analysts that have specialized in a particular country or economic region. Companies expect and require that financial analysts who have regional expertise understand the business environment, culture, language, and political settings and conditions of that specific country or geographic region.
Financial analysts work mainly in offices, but also are required to travel frequently because they have to visit potential investors or companies. The majority of financial analysts are working at major financial institutions that are based in key financial centers such as New York City, London, Frankfurt, or Shanghai. Almost half of all financial analysts are employed by companies in the financial or insurance business, such as banks and credit institutions, security and commodity brokerages, or insurance carriers. There are also quite a few of these professionals who work for the private sector for various governments.
Many financial analyst positions require proper licensure, and the main licencing body for the securities industry is the FINRA (the Financial Industry Regulatory Authority). The majority of licenses, though, require employer sponsorship, so at the entry level companies are not expecting applicants to hold a license.
Certification may influence the chances for job advancement considerably and is usually recommended by employers. The CFA (Chartered Financial Analyst) Institute provides CFA certification. Applicants must have at least a bachelor’s degree, four years of relevant experience, and take and pass three exams, and financial analysts are also offered the option to become certified in their specialty area.
Over the next decade, the job outlook of financial analysts is expected to increase by more than 15 percent. We will see an expanding range of new financial products and there is also a growing need for in-depth understanding and knowledge of upcoming geographic regions. Emerging markets worldwide provide all kinds of new investment chances, and this calls for regional expertise.
Growth in the financial services industry will likely lead to new positions, but holding a graduate degree and the proper certification will improve applicants’ prospects. The median income per year for financial analysts was $76,220 in 2014, and expectations are that this level will go up considerably over the next few years.