Financial analyst: career path and qualifications

Financial analysts produce financial plans, projections and analytical reports for use in the investment decisions of businesses, public and private organizations, and individuals. Depending on the type of analyst position, the tasks can vary considerably.

Some financial analysts work in the securities industry analyzing stocks, bonds, and other securities for banks, brokerage houses, fund management companies, and other organizations. These financial analysts generally develop expertise in a narrow category of stocks or bonds, such as Canadian corporate bonds or technology stocks, for example.

Other financial analysts work for large corporations, analyzing internal financial data and producing financial plans, income and expense projections, and recommendations to inform the budget and investment decisions of business executives. Nonprofit organizations and government agencies also employ financial analysts in this type of work.

Key points to remember

  • A financial analyst collects data to help companies make business decisions or help investors take action, such as buying or selling a stock or other security.
  • They assess macroeconomic and microeconomic issues and business fundamentals to make predictions about businesses, sectors and industries.
  • A bachelor’s degree in a math or finance related field is a given and taking it to the next level means getting certifications and / or an MBA.
  • A recent college graduate can expect to start at the junior level, under the supervision of a more experienced analyst.
  • Someone with a few years of experience, several key certifications and an MBA from a prestigious university can progress to a senior position.

Career opportunities

A recent bachelor’s degree who wishes to become a financial analyst can expect to start a junior position under the guidance of a senior analyst. After several years of experience, many junior financial analysts plan to return to graduate school for graduate degrees. While junior analysts are not excluded from advancement, continued progression to positions of greater responsibility usually requires a return to school. A graduate with a master’s degree can expect to start working as a senior financial analyst or get into the job very quickly.

With greater experience and expertise, a senior financial analyst can continue in a supervisory position. A senior analyst in the securities industry often evolves to become a portfolio manager or fund manager overseeing a team of senior analysts. There may also be an opportunity to step into a senior management role. In the corporate world, senior analysts can become treasury managers overseeing work groups within their departments. An outstanding performer can rise through the ranks to become Chief Financial Officer (CFO) or Chief Investment Officer (CIO) responsible for all financial activities of the company.

An advanced financial analyst position typically requires an MBA with a relevant subject or a master’s degree in finance.

Education requirements

While a bachelor’s degree is the minimum requirement for an entry-level financial analyst position, data collected by the United States Bureau of Labor Statistics (BLS) shows that a master’s degree is generally preferred for positions. permanent and advanced in the field.

A variety of 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 this field, bachelor’s degrees in statistics, mathematics, engineering, and physics are not uncommon among financial analysts. However, applicants with these degrees may benefit from business courses, especially in accounting and finance.

$ 83,660

The median annual income of financial analysts of all experience levels, according to May 2020 data from the U.S. Bureau of Labor Statistics (BLS).

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Other qualifications and skills

Certain financial analysts must obtain an appropriate license from the Financial Industry Regulatory Authority (FINRA), which is responsible for drafting and enforcing rules for securities firms and brokers operating in the United States. Licensure usually requires sponsorship from the company that employs them, so most financial analysts only get licensed after starting a job. However, long-term employment may depend on successful licensure.

Many employers expect financial analysts to pursue certification in the field. The certification par excellence in the field is the Chartered Financial Analyst (CFA) designation awarded by the CFA Institute. It is available to financial analysts with at least three full years of qualifying professional experience. Thus, it is generally considered a qualification for advancement to more senior financial analyst positions. Qualifying for the designation also requires a bachelor’s degree and a passing score on a series of three exams administered by the CFA Institute.

The hiring of financial analysts is expected to increase by 5% between 2019-2029, a faster pace than the average for all occupations, according to the most recent information from the Bureau of Labor Statistics.

Financial analysts are often expected to present and explain their work to clients and supervisors. Strong communication and presentation skills are therefore crucial. Analytical skills and critical thinking are essential for evaluating alternatives and deciding on a final recommendation.

In addition to knowledge of statistics, mathematics and finance, experience in using software tools associated with these disciplines is valuable. While it is not uncommon for employers to use highly specialized technology and proprietary tools that are not available outside the company, learning and using complex quantitative software provides skills that translate well in other systems.

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