How to Become a Financial Analyst in 5 Steps

Research what it takes to become a financial analyst. Learn about education requirements, job duties, median wages and job outlook to find out if this is the career for you. Schools offering Finance degrees can also be found in these popular choices.

What Does a Financial Analyst Do?

Financial analysts look into money-related data about products, industries or regions, and use this data to create financial forecasts and assess the potential risks of investment decisions. As a financial analyst, it's important to have a good understanding of investment-affecting trends, including regional, political and economic trends. Your job duties may include preparing reports, developing financial strategies and advising investment sales agents.

Consider the information in the following table to determine if a career as a financial analyst is right for you.

Degree Required Bachelor's degree typical, Master's degree often preferred
Education Field of StudyAccounting, finance, statistics, mathematics, and engineering
Key Skills Analytical, communication, computer, math, and decision making skills
Licensure RequiredLicensure by the Financial Industry Regulatory Authority (FINRA) or certification as a Chartered Financial Analyst (CFA)
Job Growth (2014-2024)12% for all financial analysts*
Median Salary (2015) $80,310 for all financial analysts*

Source: *U.S. Department of Labor Statistics.

Step 1: Earn a Degree

Most financial analysts have a bachelor's degree in business administration, finance, economics, statistics or accounting. If you choose to attain a master's degree in business administration or finance, you may be more marketable when seeking employment. Whatever major you choose, courses in business, statistics, accounting, economics and financial analysis can be helpful in preparing you for this career. Since strong communication and computer skills are necessary, courses that develop these skills can also be helpful.

Step 2: Obtain a Job

If you want to work on the buy side, get a job with a mutual or pension fund, investment bank or insurance company. If you want to work on the sell side, obtain a job with a securities firm. As a financial analyst, you'll often specialize in a specific product, region or industry. For instance, you might focus on the options market, work primarily in Asia or stick entirely to the telecommunications field.

When you begin working, you can expect many employers to have in-house training programs for entry-level analysts. Entry-level positions are very competitive and employers generally require two years of experience. It's common to begin with an entry-level position in accounting, such as a job as an accounting technician, and then cross over to finance after a period of time.

Step 3: Earn Licensure

You may have to obtain one or more licenses, especially if you are dealing with securities firms on the sell side. The Financial Industry Regulatory Authority oversees licensing of professionals in the securities industry. According to the U.S. Bureau of Labor Statistics (BLS), your employer will most likely sponsor your licensure so you don't need to worry about becoming licensed before seeking employment (www.bls.gov). Licensure must be renewed if you change employers.

Step 4: Consider Earning Certification

As a professional financial analyst you can obtain optional certification as a Chartered Financial Analyst (CFA). This designation, administered by the CFA Institute, requires four years of work experience and the successful completion of three examinations (www.cfainstiute.org). You'll be tested on subjects like corporate finance, financial markets, economics, accounting and portfolio management. The exams may be taken while concurrently completing the work experience requirement. It typically takes 2-5 years to become a CFA.

Step 5: Advance Your Career

You can help advance your career by keeping up-to-date on money markets, the economy and tax laws. Advancement opportunities include becoming responsible for larger or more important products, managing other financial analysts and becoming a senior financial analyst. You may also decide to move into another career as a fund or portfolio manager, consultant, investment advisor or investment banker.

What Are Some Related Alternative Careers?

If you are looking for a career with similar education requirements, you may consider becoming a personal finance advisor or financial manager. Job duties of financial managers include directing an organization or business's finance activities, preparing financial documents and analyzing data. Personal finance advisors help individuals make decisions on how to manage their finances, including mortgages, investments and taxes.

To continue researching, browse degree options below for course curriculum, prerequisites and financial aid information. Or, learn more about the subject by reading the related articles below:

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