Financial Analyst Career Profile
If you’re a business professional who seeks employment in the financial services sector, you may be interested in a career as a financial analyst. Financial analysts provide information, guidance, and support to businesses and individuals who are interested in making investment decisions. To do so, they must analyze and evaluate the performance of a wide selection of investment products, including stocks, bonds, and securities. Financial analysts may also focus on international markets or other financial specialties, and provide specific advice as requested by their clients.
Job Duties and the Work Environment
Financial analysts perform a number of tasks to provide guidance and advice to investors. They recommend investment portfolios, assess financial data, determine a company’s value by examining financial statements, and communicate with companies to evaluate their prospects. Financial analysts must also study business trends and economic developments, and prepare written reports on these trends and forecasts for their clients.
Broadly speaking, most financial analysts spend their time assessing investment opportunities for the organization they work for or their clients. Some analysts focus on developing investment strategies for large organizations including mutual funds, hedge funds, insurance companies, and nonprofit organizations that have large endowments. These analysts must track specific economic developments to best assess what types of investments will generate the highest rate of return.
Some financial analysts specialize in specific regions, including international markets. To evaluate investment opportunities in a foreign country, it is critical for these analysts to understand the region’s political conditions, business climate, and even its language and culture. As businesses begin to expand and invest globally, successful analysts need to understand the need to grasp broader knowledge of markets beyond their home country or region.
According to the U.S. Bureau of Labor Statistics (BLS), 24% of financial analysts work in securities, commodity contracts, and other financial investments and related activities. Fourteen percent manage investments for companies and enterprises. Thirteen percent work in credit intermediation, and 12% work in scientific, technical, and professional services.
First and foremost, financial analysts must have a strong command of accounting and budgeting principles. They must have the skills and abilities to research, organize, and analyze large amounts of data to gain insight into the performance of various potential investments, and understand how both macro and micro-conditions could affect the financial health of these investments. They must be able to consistently and accurately perform highly complex mathematical computations, and be well organized to maintain sufficient accounting records for everything they do.
Beyond strong math and analytical skills, financial analysts must be effective communicators. As advisors to investors, financial analysts not only need to understand the complexities of the markets, products, and advice they’re offering, but also how to effectively communicate this advice to a broad range of individuals with varying levels of financial literacy.
Education and Advancement
Most financial analyst positions these days require candidates to hold at a minimum level a bachelor’s degree, though many senior level roles are now requesting candidates have graduate level education. There are a number of educational tracks that adequately prepare job candidates for these roles, including financial economics, statistics, mathematics, accounting, and economics. While many aspiring financial analysts often look to MBA degrees for career progression, it’s important to remember that MBA’s are designed to help managers run a business, and the primary goal of the MFE is to equip individuals to become financial analysts.
Beyond education, proper certification is also highly recommended. The main licensing organization for the securities industry in the U.S. is the Financial Industry Regulatory Authority (FINRA). However, these licenses are not always prerequisites for a new job, and often require sponsorship by an employer.
Certifications like the Chartered Financial Analyst (CFA) also may help improve the prospects of career advancement. The CFA certification requires a bachelor’s degree plus four years of work experience, and some MFE programs, including Ohio University’s online MFE, prepares students to complete the CFA exams upon graduation.
Many financial analysts these days specialize in certain areas or sectors, and analysts often find opportunities of interest in specific market areas that suit their career goals and interests. Specializations may include working in specific market economies, or with specific investment products, and during your research on financial analyst career opportunities you may come across a broad range of job titles like ratings analyst, security analyst, tax analyst, credit analyst, Wall Street analyst, and mergers and acquisitions analyst. Experienced analysts may also have aspirations to become fund managers of large investment portfolios for investors, or portfolio managers who choose investments for a company’s portfolio.
Job Growth and Salaries
The job growth for financial analysts is particularly strong here in the U.S. currently, with projected growth to be 12% between 2014 and 2024. In 2014 there were 277,600 financial analysts employed in the U.S.; by 2024 however, the employment number is expected to reach 310,000.
While salary levels for analysts vary, the Bureau of Labor Statistics reported the median salary for financial analysts in 2015 was $80,310. The BLS data also identified that financial analysts mainly work full time, and a significant percentage work more than 40 hours per week.
If you’re seeking a career as a financial professional who aims to understand the links between the economy and financial markets, and who’s adept at forecasting potential impacts and timing investments for maximum return, then consider a career in the growing financial analyst sector.
Today’s employers seek finance professionals who understand the links between the economy and financial markets; professionals who are adept at forecasting potential impacts and timing investments for maximum return. This is the level of expertise you can acquire with the Ohio University online Master of Financial Economics.