What does a financial analyst do?
Financial analysts provide guidance and analysis to businesses and people to assist with investment decisions. They use special tools to examine financial information, recognize trends, and develop predictions. They also use data to calculate the financial risks that are linked to certain investment decisions. They use their results to create reports to present and provide recommendations on which investments a business or individual should buy or sell.
Financial analysts usually concentrate on a certain region, industry, or product type. They evaluate current trends in business practices, competition, and products of their specialty area. They are required to keep up to date on new policies or regulations that can affect the investments they are looking after. They must also watch the economy to see how it will affect earnings.
What kind of training does a financial analyst need?
Financial analysts must have at least a bachelor degree in finance or related field, but many earn a master degree in finance or business administration. The main licensing organization for the securities industry is the Financial Industry Regulatory Authority (FINRA). Depending on the position, financial analysts may need many different licenses such as the Series 63, 66, or 7. The employer must sponsor most of these licenses. Most financial analysts regularly attend seminars and training conferences to stay up to date on the latest advancements.
Many financial analysts obtain certifications to remain competitive in their field. The CFA Institute sponsors the Chartered Financial Analyst (CFA) designation. Applicants need a bachelor degree and at least four years of work experience to qualify. The applicant must pass three examinations covering a variety of subjects.
What are the prospects for a career as a financial analyst?
Employment of financial analysts is projected to grow much faster than average for all professions, increasing 34% from 2006 to 2016 (1). Growth will be driven by growth in the financial industry and the rising complexity of investments.
Job prospects are expected to be good with keen competition for high-paying positions. Financial analysts with a strong educational background and related work experience will have the best prospects.
How much do financial analysts make?
As of July 2009, the middle 50% of financial analysts earned annual salaries between $41,837 and $53,594, with the highest 10% earning annual salaries of more than $58,778 (2).
A career as a financial analyst is a great choice for people who are interested in finance and have good communication skills to present multifaceted strategies and concepts. Maturity, motivated, detail orientation, self-confidence, and ability to work independently are important attributes. Financial analysts must also have strong problem solving, analytical, and math skills.