Financial Analyst: Career Profile, Employment Outlook, and Educational Requirements

<h2 id="section---WhatIsAFinancialAnalyst">What is a Financial Analyst?</h2> <p>Financial analysts provide investment advice to companies and individuals. As a financial analyst, you'll need to have an understanding of trends that affect investments. You'll analyze data and prepare reports. You may develop financial strategies or advise investment sales agents. </p> <p>The chart below includes vital information about becoming a financial analyst. </p> <p /> <table border="1"><tr><td><b>Degree Required</b> </td><td>Bachelor's or master's degree</td></tr> <tr><td><b>Education Field of Study</b></td><td>Finance, accounting, business administration</td></tr> <tr><td><b>Key Skills</b> </td><td>Assist clients with selecting and managing investments</td></tr> <tr><td><b>Licensure Required</b></td><td>Licensure varies by role and often requires employer sponsorship</td></tr> <tr><td><b>Job Growth (2020-2030)</b></td><td>6%*</td></tr> <tr><td><b>Average Salary (2020)</b> </td><td>$96,630*</td></tr> </table><p><i>Source: *U.S. Bureau of Labor Statistics</i> </p> <h3 id="section---WhatIsTheCareerProfileOfAFinancialAnalyst">What Is the Career Profile of a Financial Analyst?</h3> <p>Financial analysts assist their clients who wish to invest in commodities, stocks and the like. Through intensive analysis of a company's sales and expenditures, financial analysts determine a company's worth based on future earnings. Analysts also examine the political, industry and economic trends, current and future products, and existing services. They monitor the performance of potential investments and weigh the monetary risks. Once all information has been collected and reviewed, financial analysts supply their clients with written reports consisting of recommendations as to which investments to pursue, or which ones to sell. </p> <h3 id="section---WhatIsTheEmploymentOutlook">What Is the Employment Outlook?</h3> <p>The U.S. Bureau of Labor Statistics (BLS) estimated that approximately 492,100 people worked as financial analysts in 2020 (<i>www.bls.gov</i>). Employment of financial analysts was expected to grow by 6% between 2020-2030, which is as fast as the average growth. However, more want to get into this field than there are positions available; those with master's degrees and certifications could have the job prospects. </p> <p>The BLS also reported that in 2020, financial analysts made an average annual salary of $96,630. Those employed in securities and commodity exchanges had higher average earnings of $125,040 per year. </p> <h3 id="section---WhatEducationalRequirementsMustIComplete">What Educational Requirements Must I Complete?</h3> <p>The minimum educational requirement for aspiring financial analysts is a bachelor's degree, but be aware that a number of positions require master's degrees plus licensing, certification or both. You should major in finance, business administration or a related field. When pursuing an undergraduate degree in finance, you'll study such topics as raising capital, international finance, mergers and acquisitions, investments and security analysis. Master's degree finance programs will require study in such areas as cost management, advanced corporate finance, funding investments and financial markets. Your program of study should also educate you in risk management, accounting and options pricing. </p> <p>Once you've been hired as a financial analyst, your employer may require that you become licensed. Different licenses are granted by the Financial Industry Regulatory Authority (FINRA), corresponding to the type of financial analysis you perform. The licensing examinations consist of multiple choice questions and can last upwards of three hours, although some can be completed in less time. In addition, you may obtain voluntary certification through the CFA Institute, which grants the Chartered Financial Analyst (CFA) credential, along with the Certificate in Investment Performance Measurement (CIPM) designation. </p> <h3 id="section---WhatAreSomeRelatedAlternativeCareers">What Are Some Related Alternative Careers?</h3> <p>Financial managers and personal finance advisors are two other careers that also require a bachelor's degree. Financial managers are responsible for directing an organization or business's finance activities, preparing financial documents and analyzing data. Personal finance advisors advise individuals on how to manage their finances, including investments and taxes.</p>