Learn all about the steps to becoming a financial analyst, including education and licensing requirements.
Do you have a knack for money? Enjoy making economic charts or giving financial advice to friends and family? Why not consider turning these interests into a high-paying and rewarding career?
Keep reading. In this article, we'll talk about how to become a financial analyst and outline the five steps you should take to attain success in this field.
What Is a Financial Analyst?
A financial analyst holds an important position within any company. It is the financial analyst's job to pay attention to financial trends and make recommendations to their employers and clients relative to spending and investing.
Financial analysts work for many different types of companies, including banks, insurance companies, investment firms, and financial planning providers.
They monitor the flow of money in specific areas relevant to their company, collect and interpret data, and forecast future financial trends.
Other job duties include:
- preparing written reports and records
- evaluating economic data
- examining financial records and portfolios
Financial analysts typically work in office settings and are usually employed by large organizations and corporations. They typically work normal business hours, but some overtime may be required depending on the employer and their specific circumstances.
Much of their time is spent on the computer and phone, preparing and monitoring data and communicating with team members, management, and clients. They must have excellent oral and written communication skills.
The median income of financial analysts is $95,570 per year, according to the U.S. Bureau of Labor Statistics. This gives financial analysis a reputation for being one of the most lucrative entry-level financial positions out there.
Now that you know a little more about what these professionals do, let's take a look at the steps you can take to become a financial analyst.
<h2 id="section---Step1BuildRelevantJobSkills">Step 1: Build Relevant Job Skills</h2><p>Even before you enter college, you can begin preparing for your future career as a financial analyst by building the professional skills you will need to succeed.
</p><p><b>We've already mentioned the need for effective communication skills as a financial analyst; what other skills are necessary?</b>
</p><p>Financial analysts must be <b>detail-oriented and highly organized</b>. They are best able to communicate their thoughts and ideas when they present them in a clear, easy-to-follow structure.
</p><p>They'll need sharp <b>math skills</b>. Much of a financial analyst's job involves working with numbers and statistics. Advanced understanding of mathematical principles is crucial for success in this field.
</p><p>Financial analysts need <b>technology skills</b> since they are often required to use technological programs to track financial data and create charts and reports. Excellent computer skills are a must in this line of work.
</p><p>Last but not least, financial analysts must have an <b>analytical mind</b>. They need to have a knack not just for collecting data, but interpreting it and making recommendations based on their findings.
</p><h2 id="section---Step2ObtainABachelorSDegree">Step 2: Obtain a Bachelor's Degree</h2><p>Almost all financial analysts hold at least a bachelor's degree. A variety of degree options are acceptable, but aspiring financial analysts typically earn their degree in a financial field.
</p><p><b>Good degree options include:</b>
</p><ul><li>accounting
</li><li>finance
</li><li>data analytics
</li><li>economics
</li><li>statistics
</li></ul><h2 id="section---Step3GetLicensedAndCertified">Step 3: Get Licensed and Certified</h2><p>Not all companies require financial analysts to have specific licenses or certifications; however, many of these credentials are available and may give you an edge with prospective employers.
</p><p>One of the most common licenses is offered through FINRA, the Financial Industry Regulatory Authority. Many employers do require this license and may sponsor new employees to sit for the exam as part of the hiring process.
</p><p>You may also obtain certifications as a financial planner, public accountant, or a similar designation. Another popular credential is the Chartered Financial Analyst option, available through the CFA Institute.
</p><p>These extra credentials are not always required for employment, but they look good on a resume and can help you stand out from the crowd.
</p><h2 id="section---Step4GatherWorkExperience">Step 4: Gather Work Experience</h2><p>The world of financial analysis is a competitive field, and the best way to set yourself apart from the competition is to get on-the-job training and build real life experience.
</p><p>Find out about internship opportunities while you are still in school or after graduating. These can help you build a professional network which, in turn, can come in handy when you are searching for a job.
</p><p>Take on entry-level jobs in finance, even if they aren't specifically financial analyst positions. Getting related experience will help you land the types of jobs you want later on.
</p><p>Finally, explore in-house financial analyst training programs offered through many companies. These programs will help you learn the tricks of the trade and build professional connections, and they may even lead to job offers upon completion.
</p><h2 id="section---Step5PursueAdvancedEducation">Step 5: Pursue Advanced Education</h2><p>Many financial analysts go on to receive their <a href="https://learn.org/article_directory/Masters_Degree_FAQs.html">master's degree</a> or a graduate certificate in order to better their work opportunities.
</p><p>These advanced education options are not required to become a financial analyst, but they can open up higher-paying jobs with larger and more well-established companies.
</p><p>Consider degree or certificate options such as accountancy, business administration, or finance. All of these degrees can further your knowledge in business and financial topics and will make you an invaluable asset to any company.
</p><h2 id="section---StartYourPathToBecomingAFinancialAnalystToday">Start Your Path to Becoming a Financial Analyst Today</h2><p>And there you have it—the career path to become a financial analyst. Though it requires a lot of education and work experience, it can be a lucrative and rewarding career for anyone who enjoys statistics and working with money.</p>
