The position of a financial analyst is one of the most sought-after occupations in the financial services sector. A financial analyst’s primary responsibility is to sift through data in order to find opportunities or assess results in order to make business choices or investment recommendations. Within a company, financial analysts can have both junior and senior positions, and it’s a speciality that frequently opens doors to different job prospects.
It might be challenging to establish oneself in the financial services sector due to competition. If you’re thinking about working as a financial analyst, keep reading to learn how you may get ready for the position.
Who is a Financial Analyst?
Financial analysts analyze financial data and utilize the results to assist businesses in making choices. Frequently, their study is intended to assist businesses in making investment decisions.
Financial analysts primarily do research on macroeconomic, microeconomic, and firm basic factors in order to create predictions about companies, markets, and industries. On the basis of a company’s overall performance and future prospects, they frequently suggest a course of action, such as buying or selling its stock.
An analyst must be knowledgeable about recent advancements in their area of expertise as well as the creation of financial models to forecast future economic circumstances for a variety of factors.
Financial analysts don’t all analyze the bond or stock markets or assist their companies in financial decisions. Additionally, businesses may employ an analyst to evaluate the effectiveness of various marketing strategies in relation to costs using numerical data. Financial analysts who are in charge of monitoring certain franchises or clusters of franchises within a geographical area are frequently employed by businesses that use the franchise model. Hence, the analysts identify the company’s strengths and shortcomings and forecast profit and loss.
Financial Analyst Salary
In 2022, the median salary for financial analysts is $83,660. The top 25 percent of earners can earn up to $112,460, while the bottom 25 percent make roughly $63,670.
Financial Analyst Salary by Highest Paying States
The five states and the District of Columbia that pay the highest mean salaries to financial analysts are New York ($130,670), Massachusetts ($105,680), Connecticut ($105,020), and New Jersey ($101,780).
|District of Columbia||$109,070|
Financial Analyst Salary by Highest Paying Cities
Indeed, New York, Bridgeport, Medford, Sebastian, and San Francisco are the cities with the highest salaries for those working as financial analysts.
|New York, New York||$130,020|
|San Francisco, California||$120,410|
Required Skills and Education For a Financial Analyst
The requirements to become a financial analyst are far less strict and well-defined than those of many high-paying professions. There are no industry-wide educational requirements, unlike in law and medicine. Therefore, whether you must obtain any necessary licensing depends on a number of variables, including your employer and the particulars of your employment.
To that end, obtaining a bachelor’s degree in the 21st century has de facto become necessary for becoming a financial analyst, especially with a major in economics, finance, or statistics. Accounting, math, biology, and even engineering are also desirable majors, particularly if one is interested in specializing as an analyst in those fields. Because of the intense competition and the prevalence of undergraduate or graduate degrees on the job market, there is little possibility of success in applying for an analyst position with less than a bachelor’s degree.
Elite institutions and universities like Harvard University and also, Princeton University are the only places where the giant investment banks, where the enormous first-year salaries are paid, almost exclusively hire. Therefore candidates who apply with degrees from less esteemed institutions have a better chance of being accepted if they continue their studies and earn an MBA from a well regarded business school. Hence, senior analyst positions are frequently available for MBA grads fresh out of business school.
Regardless of degree, having strong quantitative capabilities, expert problem-solving skills, a mastery of logic, and above-average communication skills are necessary for a career as a financial analyst. Financial analysts must analyze data, but they also must present their results to their superiors in a way that is convincing, succinct, and clear.
Financial Analyst Job Outlook
The future of employment for financial analysts seems promising. Although it’s a competitive sector, there were over 492,100 positions in it overall in 2020, according to the most recent BLS numbers, and the profession is expected to rise by nearly 6% between 2020 and 2030.
The BLS observes that as overall economic activity increases, so does demand for financial analysts. When new enterprises are launched or old ones grow, financial analysts will be required to assess investment prospects. Additionally, emerging markets around the globe provide fresh investment opportunities, but doing so requires knowledge of the areas in which such markets are situated.
What to Expect On the Job
Financial analysts must continue to be careful in acquiring data on the macroeconomic level. Including data on particular companies, particularly in evaluating such companies’ financial fundamentals via their balance sheets. Analysts must read extensively on their own time in order to stay current on financial news. The Wall Street Journal, The Financial Times, The Economist, and financial websites are among the periodicals that analysts frequently read.
Additionally, traveling extensively is a common aspect of being an analyst. Some analysts go on site visits to businesses to observe activities firsthand. Also, analysts usually go to conferences with other professionals in their field of expertise.
Also, in the workplace, analysts develop their skills using relational databases, spreadsheets, and statistical and graphical software. They employ these technologies to create financial reports that contain forecasting. They also contain cost-benefit analysis, and trend analysis, as well as suggestions for top management. Analysts must also evaluate documents for conformity with legal requirements and understand financial activities.
Preparation and diligence are necessary for a career as a financial analyst. Additionally, it has the ability to bring actual joy. This comes from contributing to the company environment, in addition to cash incentives.