Risk Analyst Jobs: Salary and Career Facts
Research what it takes to become a risk analyst. Learn about education requirements, salary, and job outlook to find out if this is the career for you.
What Is a Risk Analyst?
Risk analysts are financial analysts who specialize in assessing risk. In general, they are responsible for the researching, estimating, and explaining probability and costs of financial uncertainty, and they help organizations make financial decisions based on their findings. However, in most cases, they work for banks and insurance companies, where they evaluate applicants in order to determine whether or not they are good credit risks. Based on their results, they write up summaries for company leaders and decision makers.
Take a look at the following chart for an overview of how to enter this field.
|Degree Required||Bachelor's degree minimum|
|Licensure||Professional license may be required|
|Key Skills||Problem-solving, math, communication, analytical|
|Job Growth (2018-2028)||6% (for all financial analysts)*|
|Median Salary (2019)||$63,418**|
Sources: *U.S. Bureau of Labor Statistics; **Payscale.com
What Are the Responsibilities of a Risk Analyst?
As a risk analyst, you would be responsible for providing the cautionary perspective in protecting an organization's assets. When determining how to allocate large sums of money for the purpose of gaining wealth from the investment, you would consider potential losses and determine how to limit loss. Usually this involves spreading the available funds into specific kinds of investment vehicles, such as credit derivatives, currency futures, short selling and hedge funds.
How Do I Prepare to Become a Risk Analyst?
You would need at least a bachelor's degree in a relevant field, such as finance, business, economics, accounting or statistics, in order to become a risk analyst. Many organizations will require you to have a Master of Business Administration (MBA) or master's degree in finance. Risk management should be among your course selection. This is a competitive field, so you may wish to become certified in order to improve your employment opportunities. The CFA Institute offers the Chartered Financial Analyst (CFA) designation, as well as specialized certification as a Professional Risk Manager (PRM).
Employment in the securities industry may require that you obtain a license through the Financial Industry Regulatory Authority. Licensure occurs after you have obtained employment, and it usually involves the sponsorship of your employer. If you change employers, a new license would be required.
What Skills Will I Need?
To be successful as a risk analyst, you would do well to possess excellent mathematical and analytical skills. Confidence and a level head are useful personal capabilities, as this profession requires problem-solving and independent work. You would do well as a risk analyst if you have an eye for detail and an aptitude for dealing with the complexities of tax law, economics and money markets. You should feel comfortable presenting the complexities of an investment strategy to senior executives. Also, you will need to have the skills to effectively utilize computer software, such as proprietary and branded spreadsheets and statistical software.
What is the Earning Potential of this Profession?
According to Payscale.com (www.payscale.com), the median annual salary for an entry-level risk analyst with less than five years of experience is $56,241. With 10-20 years of experience, you could earn the median salary of $77,918. Advanced education and certifications contribute to your ability to obtain the higher paid positions.
What Are Some Related Alternative Careers?
Instead of becoming a risk analyst, you could get a financial analyst job in a different area of finance. For instance, as a ratings analyst, you would evaluate an organization's capacity to repay debts, which you would then use to come up with a risk rating for the organization. Another option is to work as a portfolio manager, where you would analyze investment options and make selections based on the needs of a particular company or organization. To get a job as a ratings analyst or a portfolio manager, you usually need to have at least a bachelor's degree.