One of the most in-demand professions of the accounting sector is financial analysis. They collect, monitor, and assess financial information to predict trends and outcomes and recommend measures accordingly. Security analysts and investment analysts are some alternative terms for this profession.
Where Does A Financial Analyst Work?
Financial analysts work in a wide-ranging organization, including banks, insurance companies, financial planning enterprises, investment advisory and government regulatory agencies, and portfolio management providers.
People who choose to work for financial services acquire skills that help them excel in their field and ultimately in their success. These people are planners with strong analytical and leadership skills. However, not everyone can become a financial analyst. Getting started on your career path involves a long academic journey.
Let’s explore the journey of an aspiring financial analyst step by step
- Getting The Right Education
The first step towards becoming a financial analyst starts with the right and relevant educational degree. A bachelor’s degree in finance and accounting paves the way to a career in this field. Candidates can also choose general courses such as statistics, economics, and other related subjects.
In a highly competitive job market, financial analysts can polish their professional skills and increase their business acumen by going for advanced degrees. They can pursue a master’s in business administration or a master’s in accounting to enhance their credentials.
- Obtaining Licenses and Certifications
Licensing and certifications are not required for graduates to begin a career in accounting, banking, or investment. However, in later stages, they will need to obtain licenses and certifications to boost their careers.
The extensive and arduous studies often discourage individuals from going for certifications due to their fear of messing up their professional careers and being unable to balance both work and studies. Fortunately, several online institutes offer test prep and a platform for financial analysts to obtain licenses and relevant certifications like FINRA, CPA, and CFA.
How Is Getting A License Going To Give My Career A Boost?
In companies that sell financial products, obtaining a license has become essential. They must comply with government regulations to protect consumers from unfair practices and fraudulent procedures. The Financial Industry Regulatory Authority (FINRA) requires companies to register and comply with regulations. Financial analysts must avail of the license issued by FINRA.
In addition, Chartered Financial Analysts (CFA) is a recommended certification issued by the CFA Institute for financial analysts. However, they have to gain professional experience before applying for CFA certification.
In some states, licenses and certifications are not mandatory, but they can prove beneficial for advancing a career in the long run. Moreover, financial analysts can get new skills and hone their old skills based on the latest industry practices.
- Building On The Job Experience
Getting relevant job experience is as important as obtaining education, licenses, and certifications for financial analysts who want to excel in their careers. According to the data, employers consider and prefer relevant work experience while hiring a financial analyst. Professionals with hands-on experience in finance, accounting, economics, and other sectors have a competitive edge over other job seekers.
What Are The Skills Required For A Financial Analyst?
Several specialized skills and core competencies are vital to excel in this career and education and professional experience. Some professionals are naturally inclined to accounting and finance; they examine and compare facts and then use the information gained from comparison to make judgments and predictions. Making investments and purchases, they plot graphs and charts and compare the pros and cons of different options.
However, for those who wish to acquire skills, here is a recommended list to help them in their career:
- Critical thinking for making sound decisions and well-reasoned judgments based on logic and facts
- Research to systematically investigate the information for establishing facts and drawing conclusions
- Analysis to examine the strength and weaknesses of the structures, systems, and processes to improve their efficiency
- Time management to deliver the expected outcomes within the designated time frame
- Interpersonal communication to share and exchange information for developing understanding with other stakeholders
A financial services degree program provides opportunities for students to become proficient in these important skills. By gaining relevant work experience with appropriate training, graduates can improve their skill sets to pursue careers as financial analysts.
What Is The Demand And Growth Of Financial Analysts?
The demand for financial analysts has increased with the production of a diverse range of financial products globally and the emergence of new challenges. Many businesses now rely on these analysts for their expertise and updated knowledge to stay competitive.
The Job Outlook Of This Profession Is Bright With Remarkable Growth Potential.
The United States Bureau of Labor Statistics has estimated an 11% growth in financial analysts by 2026.
While considering shifts in market trends and various economic factors, the strong demand and growth potential are strong indicators for professionals to advance their careers as financial analysts. This profession has high earning potential as the median salary of a financial analyst is $83,660 per year in the United States. However, their salaries can vary by state and industry.
The commodity contracts, securities, financial investments, and other related activities offer financial analysts a higher median salary of $100,180. On the contrary, insurance companies and other associated activities may offer a lower median salary of $76,860. Entry-level analysts who have only five years of professional experience are earning less than seasoned and experienced analysts with more than ten years of working.
Finance is a rewarding field with much growth potential. If you’re interested in becoming a financial analyst, you can climb the ladder by obtaining a degree in finance or another relevant field, which will prepare you with the skills and expertise to help companies achieve their goals. You can also acquire certifications to fast-track your career with the help of online platforms. Last but not least, experience in the relevant field will set you apart from the pack, and you are bound to rise to the top.