An individual who wants to become a financial advisor must complete a degree program in a finance-related major and obtain some work experience. Depending on their work duties, financial analysts may also need to be licensed. Once an individual becomes a financial analyst, he or she can also choose an area of specialty. Below is an overview of what it takes to become a financial analyst as well as general information on the career.
Education Requirements to Become a Financial Analyst
To become a financial analyst requires completing a bachelor’s degree program in business management, finance, economics, accounting statistics or mathematics. Although some employers may prefer to hire financial analysts who have master’s degree, many are hired with only bachelor’s degrees. Course topics in a financial analyst program include financial analysis, economics, business, accounting and statistics to name a few.
Because financial analysts spend a lot of time with clients, they should possess good communication skills. It’s also beneficial to a financial analyst to be detail-oriented and have good analytical, decision-making, math and computer skills.
Financial analysts often choose a specific area of interest or a certain product, region or industry. One analyst might work in the Middle East while another could choose to work in the Information Technology field. Financial analysts may work as buy-side analysts or sell-side analysts, which would affect what courses they might take. Once the financial analyst obtains the degree, the next step is obtaining some work experience in this field.
Some financial analysts work in a capacity where they sell financial products. In this situation, the financial analyst will be required to be certified by the Financial Industry Regulatory Authority. The CFA Institute also offers certifications for financial analysts. Financial analysts who choose areas of specialty can also obtain certifications in those fields of specialty. In many cases, the analyst must have a certain amount of work experience to be eligible to apply for certification.
What They Do
Financial analysts study business and economic trends, evaluate current and past financial data and make investment recommendations based on their evaluations and findings. Their analysis is generally based on the performance of investments like stocks and bonds. They also evaluate the financial stability of a company, prepare written reports and meet with company heads to discuss the financial status of the company and make financial recommendations. A financial analyst may work in banks, mutual funds, insurance companies, pension funds and similar businesses.
Career Outlook and Wage Potential
As the economy continues to grow, financial analysts will be called upon to provide their services. These financial geniuses are expected to see an employment growth of 11 percent during the 2016-2026 decade, according to the U.S. Bureau of Labor Statistics (BLS). Average annual wages for financial analysts ranged from $51,780 to $165,580 with the average wage at $99,430, according to a 2017 report by the bureau. U.S. News & World Report ranks financial analysts 15th among best business jobs; 16th among best STEM jobs; and 74th among 100 best jobs.
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Individuals who are good with number crunching and enjoy working with math are often the ideal choices for financial analysts. Being in a position to make recommendations that can help others make money can be very challenging but can also be extremely rewarding when the results are positive. This is probably the main reason people choose to become financial analysts.