- Education Required
- Most positions require a bachelors degree. A number of fields of study provide appropriate preparation, including accounting, economics, finance, statistics, and mathematics.
- Job Outlook
- The projected percent change in employment from 2016 to 2026: 11% (Faster than average)
(The average growth rate for all occupations is 7 percent.) - Advancement
- Financial analysts typically start by specializing in a specific investment field. As they gain experience, they can become portfolio managers and select the mix of investments for a companys portfolio. They can also become fund managers and manage large investment portfolios for individual investors. A masters degree in finance or business administration can improve an analysts chances of advancing to one of these positions.
- Licenses/Certifications
- The Financial Industry Regulatory Authority (FINRA) is the main licensing organization for the securities industry. A license is generally required to sell financial products, which may apply to some financial analyst positions. Because most of the licenses require sponsorship by an employer, companies do not expect individuals to have these licenses before starting a job.
- Median pay: How much do Financial Analysts make?
- $81,760 Annual Salary
- $39.31 per hour
Financial analysts provide guidance to businesses and individuals making investment decisions. They assess the performance of stocks, bonds, and other types of investments.
What do Financial Analysts do?
Financial analysts typically do the following:
- Recommend individual investments and collections of investments, which are known as portfolios
- Evaluate current and historical financial data
- Study economic and business trends
- Examine a companys financial statements to determine its value
- Meet with company officials to gain better insight into the companys prospects
- Assess the strength of the management team
- Prepare written reports
Financial analysts evaluate investment opportunities. They work in banks, pension funds, mutual funds, securities firms, insurance companies, and other businesses. Financial analysts are also called securities analysts and investment analysts.
Financial analysts can be divided into two categories: buy-side analysts and sell-side analysts.
- Buy-side analysts develop investment strategies for companies that have a lot of money to invest. These companies, called institutional investors, include hedge funds, insurance companies, independent money managers, and nonprofit organizations with large endowments, such as some universities.
- Sell-side analysts advise financial services sales agents who sell stocks, bonds, and other investments.
Some analysts work for the business media or other research houses, which are independent from the buy and sell side.
Financial analysts generally focus on trends affecting a specific industry, geographical region, or type of product. For example, an analyst may focus on a subject area such as the energy industry, a world region such as Eastern Europe, or the foreign exchange market. They must understand how new regulations, policies, political situations, and economic trends may affect investments.
Investing is becoming more global, and some financial analysts specialize in a particular country or region. Companies want those financial analysts to understand the language, culture, business environment, and political conditions in the country or region that they cover.
The following are examples of types of financial analysts:
Careers for Financial Analysts
- Corporate financial analysts
- Corporate securities research analysts
- Corporate statistical financial analysts
- Fund managers
- Institutional commodity analysts
- Portfolio managers
- Ratings analysts
- Risk analysts
- Securities analysts
