Financial Analyst Career and Salary Profile
Financial analysts advise businesses and individuals on investments by assessing the performance of stocks, bonds and commodities. They accomplish this by conducting a quantitative analysis of information affecting the investment plans of public and private institutions. With a broad understanding of business and accounting, they determine a company’s value by projecting its future earnings. The skills and knowledge needed for this challenging and rewarding career can be obtained through a bachelor’s degree in business administration program with a specialization in accounting.
Job Outlook for Financial Analysts
The U.S. Bureau of Labor Statistics (BLS) reports that financial analyst job growth is expected to be very strong in coming years. Employment will rise as the level of investments does, due to the increasing diversification, complexity and globalization of business. As the number of mutual and hedge funds grows, the demand for expert analysis and recommendations by financial analysts will increase.
Job Duties
Financial analysts work for banks, insurance companies, securities firms and other businesses, making investment recommendations or decisions on behalf of the firm. They usually specialize in either the “buy side” or the “sell side.”
Analysts on the buy side work for organizations with large amounts of money to invest, such as non-profit endowments, mutual funds or insurance companies. In their daily work, buy-side financial analysts devise sound investment strategies on behalf of their employer or clients. Sell-side analysts assist securities dealers such as banks and other firms in selling investment products.
Often, financial analysts focus on a specific product or service, industry or region. It’s important that financial analysts understand regulations, politics and economic trends, as well as the resulting impact of changing conditions on investments.
Some financial analysts evaluate the risk in investment portfolios and help limit potential losses. Others supervise teams of analysts and choose the mix of investments for a company’s portfolio. Financial analysts work with spreadsheets and specialized software packages to analyze data and develop forecasts. They measure risks and make recommendations to buy, sell or hold investments.
Financial analysts usually work in an office setting. They may be required to travel to meet with clients or potential investors. A fast-paced work environment is typical, and they may work more than 40 hours per week.
Potential Salary
The BLS reports that in May 2009, the average annual income for financial analysts was $85,240. The middle 50% earned between $55,640 and $98,920. Salaries for the lowest 10% were around $44,080, while the highest 10% brought in upwards of $139,350. Recent bachelor’s degree program graduates will typically start out at the lower end of the scale and move up in salary with experience and advanced education.
Education and Training
Entry-level financial analyst jobs require a bachelor’s degree. Employers often favor applicants with a bachelor’s degree in accounting, finance or business administration. Previous experience is attractive to many employers, and can be obtained through summer jobs or internship programs while pursuing a degree. Some companies prefer to hire candidates with Chartered Financial Analyst (CFA) certification or a graduate degree, such as an MBA with a specialization in accounting and finance.
The road to a financial analyst career can begin with a bachelor’s degree in business administration with a specialization in accounting. Coursework typically includes principles of accounting, accounting information systems, applied decision methods for business and international management.
Employers can be confident that graduates of a business administration program with a specialization in accounting are able to:
- Identify and solve problems through quantitative techniques.
- Apply decision-making principles to global business scenarios.
- Practice the fundamentals of data analysis.
- Exhibit strategic planning and change management skills.
- Leverage advanced skills and knowledge to succeed as a financial analyst.
Many employers offer opportunities for continuing education. It’s possible to gain an entry-level position with a bachelor’s degree and use tuition assistance to further your education.
Is a Financial Analyst Career a Good Choice for You?
If you have an affinity for numbers and are intrigued with the finance and business worlds, you might consider a career as a financial analyst. This occupation requires strong math, analytical and problem-solving skills, as well as self-motivation and self-confidence. If you possess these characteristics and complete a bachelor’s degree in business administration with a specialization in accounting, you can be on your way to an exciting career as a financial analyst!
