financial analyst

How To Become A Financial Analyst

Financial analysts are a key component to any successful business. They track global economic and political trends and analyze the financial conditions of businesses. They may also be involved in buying or selling securities or work as personal finance advisors. The scope of this career is great.

The financial analyst is a frequently sought-after position in the finance world. This is partially due to the well-above-average salary, but also because of the tremendous opportunities for growth and the job stability that comes with every business and many individuals needing financial analysis. Today we will discuss what a financial analyst is, how to become one and other things to consider for this career path.

What Is a Financial Analyst?

Financial analysts analyze many things. Some focus on investment performance analysis and act as financial advisors for individual investors. However, most financial analysts are employed by businesses or work as contractors for several businesses at once. If performing financial analysis for investors, they need to keep up with economic, political and regional trends. They create investment plans for investors based on the delicate relationship between acceptable risk and desired returns. They may advise investment sales agents, develop financial strategies and prepare reports.

What to Expect

Expect a lot of travel. If you are a contractor, you may do most of your work remotely, but you may be flown out to your client’s site to see how the business operates on the ground. If you are an employee of a company, you may be sent to several conferences each year to further your education and stay up-to-date on the latest technology and analysis techniques.

Subscribe to The Wall Street Journal. You need to know what is happening to the global economy and stay abreast of any changes to your company’s industry. If you are consulting for a pharmaceutical company that provides drugs to 340B-qualified hospitals and medical centers and President Trump reduces the scope of such hospitals that qualify, your client may lose customers overnight. You need to keep upper management informed of such pending legislation.

How to Become a Financial Analyst

To become an entry-level financial analyst, there is a minimum education requirement of a Bachelor’s degree. Earn a degree in a relevant field such as accounting, finance, statistics, microeconomics, macroeconomics or business administration. However, depending on the industry you want to break into, degrees in engineering or biology may hold leverage. To move up in your career, you may need to pursue a Master’s degree in finance or business administration.

Getting a Job

Entry-level financial analysis roles are highly competitive, and most employers require two years of experience. If this is true of your local job market, start with an entry-level accounting role and take on as many finance-related responsibilities as you can. After a couple of years, try to transition into finance. To get a job on the buy side of the industry, seek a job with an insurance company, an investment bank, pension fund or mutual fund.

To get a job on the sell side, work for a securities firm. You will be expected to specialize in a specific industry, region or product. For example, you may focus on the Middle East, the options market or the oil field.


Depending on the role you take in your financial analysis position, you may need one or more licenses throughout your career. This is particularly true for those who sell securities. The Bureau of Labor Statistics shows most employers will sponsor your licensure, so you do not need to worry about paying for your licensing exam before employment. Licensure is overseen by the Financial Industry Regulatory Authority, and you will need to renew your license when you change employers.

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Depending on the financial analysis you perform you may be required to get certifications. The most common certification for financial analysts is a CFA or chartered financial analyst. To earn this designation, you must complete four years of relevant work experience and pass three exams administered by the CFA Institute. You will be tested on such topics as economics, financial markets, portfolio management, accounting, and corporate finance. You may take these exams while completing the required work experience. Most people take two to five years to earn this certification.

Key Skills

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Your job duties will vary from industry to industry and company to company. However, there are universal key skills that will help you sell yourself as the best candidate for a job. Good financial analysts have a passion for learning and growing both personally and professionally. They can streamline functions and automate systems to improve efficiencies. They have excellent oral and written communication skills and work well in teams. They must be comfortable making presentations to the highest-ranking executives in the organization and making recommendations on how to change practices to be successful in the ever-changing economy. They must have significant financial modeling experience and a passion for in-depth research and analysis.

Basic Qualifications

The basic qualifications for a financial analysis role are zero to three years of corporate finance or other related experience such as accounting or business analysis. You must have excellent business acumen and analytical and data gathering skills. Many companies require a B.A., B. Sc. or B. Com. degree in a relevant degree such as accounting, finance or economics.

You must be highly proficient with financial modeling and analysis techniques and fluent with spreadsheets, formulas, and functions. Most companies use Microsoft Excel or Google Sheets, but you may encounter a company that uses Apple Numbers.

Preferred Qualifications

As you move up in your career, standards become more rigid. Required experience includes three to five years of corporate finance or related experience. This means, if you perform strongly in your first year of financial analysis, you can get away with that, plus two years of accounting experience including finance-related functions.

MBAs from a top business school are preferred. Strongly preferred majors include statistics, economics, accounting or finance. You need glowing letters of recommendation from supervisors and bosses showing you thrived in a heavily quantitative and analytic role. FMVA (Financial Modeling and Valuation Analyst) or similar designations are strongly preferred. You must also be a proven self-starter with a strong drive to solve problems and expertise in communicating with high-level executives.

Additional Considerations

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There are several things to consider for a career in financial analysis. One important factor is job outlook. According to the U.S. Bureau of Labor Statistics, financial analysis careers are expected to grow 12% between 2014 and 2024. The Bureau of Labor Statistics predicted overall job growth of 6.5%. This means, there is a great chance there will be a job available for you when you graduate college. Between 2016 and 2026, the job market for financial analysis is expected to expand by 32,200 positions.

Opportunities for Advancement

Within three to five years of investment analysis, you can work your way up from junior analyst to senior analyst. From there, you can become the portfolio manager, the senior manager or partner.

How to Be Successful

To be a successful financial analyst, you must be tech-savvy. Most of your day will be spent developing spreadsheets, writing database queries, creating PowerPoint presentations and learning other software applications.

Related Careers

Careers related to financial analysis are financial managers and personal financial advisors. Being a personal finance advisor goes far beyond investment decisions. These professionals also help individuals manage every aspect of their finances including mortgages, taxes, and daily finances. Financial managers take on a role that incorporates a lot of accounting along with finance such as preparing financial documents, data analysis and directing finance activities for businesses or organizations.


The median financial analyst salary was $84,300, which works out to an average rate of $40.53 per hour. Here are the top 10 states to seek careers in financial analysis based on median salary:

  • TX – $102,447
  • IL – $101,849
  • MO – $101,482
  • NC – $93,407
  • AL – $90,493
  • MI – $90,157
  • MS – $89,720
  • LA – $89,219
  • MN – $87,450
  • MT – $87,192

The above numbers are adjusted for cost of living in the state. For example, the median wage in Texas is $92,920, but the cost of living for the state is only 90.7. Thus, we divided 100 by 90.7 and multiplied the result by the median salary of $92,920 to get $102,447. Junior financial analysts make an average wage of $20.13 per hour or $48,482 per year. Senior analysts make on average $93,738 annually, as a base wage before benefits and bonuses. Financial managers make on average $125,080 per year. Personal financial advisors make an average of $60,539 per year.


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Financial analysts can serve in several capacities. Most people think, not incorrectly, of financial advisors who offer investment advice to individual investors. However, they may also work for businesses, analyzing the company’s financial data and helping the businesses make decisions to strengthen their position in the market or improve other metrics.

No matter which path you want to take with your career, expect a lower to upper-middle-class salary shortly after starting work. To get a job, you may have to start in accounting for a couple of years if your local job market is highly competitive. To advance, you need at least three to five years of relevant experience and depending on the industry, you may need licenses or certifications. MBAs or Master’s of Finance degrees are preferred.

To be successful in this field, you need strong interpersonal and communication skills, a passion for research, and comfort using software to analyze data. The field is looking to grow nearly twice as fast as the rest of the job market and is great to break into for many reasons.

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