All About Financial Analysts

Financial Analyst


AnnaMarie Houlis
AnnaMarie Houlis

Are you good at crunching numbers and even better at analyzing data? If you're interested in becoming a financial analyst but find yourself wondering what exactly a career as one would entail — and how to land a job in the first place — we're here to help you.

What Is a Financial Analyst?

In the finance world, one of the most coveted careers is that of a financial analyst. It pays well with attractive bonuses, and it has a promising career trajectory.

If you're wondering, What is the role of a financial analyst in a company?, the answer isn't necessarily easy. The job of a financial analyst is a nuanced one, but, according to the Bureau of Labor Statistics (BLS), financial analysts "provide guidance to businesses and individuals making investment decisions" and "assess the performance of stocks, bonds and other types of investments."

Now maybe you're wondering, but what is a financial analyst job description exactly?
Financial analysts run the gamut with responsibilities, but they are primarily responsible for coming up with solid financial recommendations that can predict the outcome of the business decisions their clients make. To do this successfully, they're tasked with aggregating financial data and analyzing trends, the client's financial situation, predicted deal outcomes and more.
A financial analyst's recommended course of action might be to buy or sell a company's stock based upon its overall performance and outlook — though not all financial analysts work with stock or bond markets or help with making investment decisions. Perhaps, instead, the course of action might be how to best utilize marketing techniques relative to cost, or how to streamline the recruitment process to save dollars.
That said, the role of a financial analyst can be very different depending on where an analyst works — perhaps they work for an investment bank, or an insurance company, or a startup, or for a pension fund. Perhaps they work in a suburban area, or perhaps they're based in a city.
"Away from Wall Street, financial analysts work for local and regional banks, insurance companies, real estate investment brokerages and other data-driven companies," according to Investopedia. "Any business that frequently makes weighty decisions on how to spend money is a place where a financial analyst can potentially add value."
In fact, financial analyst jobs in fintech are especially in high demand as startups continue to crop up and grow, according to Vocate Blog.
"Not only do these businesses need financial analysts to manage their own revenue, but they also need recent graduates on the front lines working with clients to analyze data through the use of whatever tool or service the startup has built," the blog explains.
Whatever the case, the industry they're working in, the geographic location and the company's products and services will ultimately determine the financial analyst's day-to-day work. They're expected to be up-to-date with new regulations, policies, political situations, economic trends and other developments and variables that may affect a company's investments.
To simplify, according to the BLS, financial analysts typically take on the following duties:
  • Recommend individual investments and collections of investments, which are known as portfolios
  • Evaluate current and historical financial data
  • Study economic and business trends
  • Examine a company’s financial statements to determine its value
  • Meet with company officials to gain better insight into the company’s prospects
  • Assess the strength of the management team
  • Prepare written reports

What Does a Day in the Life of a Financial Analyst Look Like?

Financial analysts can have long days — and their work goes beyond the office a lot of the time. Financial work in offices, mostly full time; in fact, about three in 10 financial analysts worked more than 40 hours per week in 2016, according to the BLS.
"Financial analysts need to remain vigilant about gathering information on the macroeconomy as well as information about specific companies and the fundamental microeconomics of their balance sheets — on order to stay on top of financial news, analysts will need to do a lot of reading on their own time," according to Investopedia. "Analysts tend to peruse publications such as The Wall Street JournalThe Financial Times and The Economist as well as financial websites."
Travel is another significant factor for financial analysts. They often have to visit companies to get first-hand looks at their operations and attend conferences and speaks with those who share their specialty.
When they are in the office, however, they're spending a lot of time working with spreadsheets, crunching numbers into databases and crafting detailed presentations and reports.
Of course, the hard work pays off. On average, a financial analyst salary is about $84,300 per year or about $40.53 per hour, according to the BLS. Plus, many employers will use bonuses, which can be equal to or double the beginning analyst’s salary, retain talent. 
There's also major room for growth.
"As interoffice protocol goes, analysts interact with each other as colleagues while they tend to report to a portfolio manager or other senior in management, [so] a junior analyst may work his or her way up to a senior analyst in a period of three to five years," according to Investopedia. "For senior analysts who continue to look for career advancement, there is the potential to become a portfolio manager, a partner in an investment bank or senior manager in a retail bank or an insurance company. Some analysts go on to become investment advisors or financial consultants."
Here's what the career trajectory looks like, according to the Princeton Review:
You'll start out with long hours, a low base pay and a fair amount of responsibility. You'll travel a ton to meet with clients, and you'll have very little control over your hours and possibly personal life in your first year or two. Though the burnout rate is still low (around eight percent in the beginning) because of the opportunities.
At the five-year mark, you'll achieve the rank of "associate" or "senior financial analyst," and instead of producing work, you'll be pitching it. Client contact will increase, and you'll probably go back to school at this point. Over 70 percent of those who began in the field have also changed firms or jobs by this point. Your salary, nonetheless, will remain stable and your bonuses can be hugely beneficial.
After 10 years in the industry, if you're successful, you'll have moved on to a vice-president position in the investment banking, financial analysis or valuation departments of the company. You'll be rewarded with attractive salaries and bonuses — and decreased hours — but you will have more responsibilities and pressure to solicit new business.

What Are the Different Types of Analyst Positions?

There are different types of financial analyst jobs — and a good number of them. In fact, in 2016 alone, there were 296,100 jobs available, according to the BLS. The growth rate for a financial analyst from 2016 to 2026 is anticipated to be about 11 percent, which is faster than average, as well — so evermore jobs are expected to become available.

According to the BLS, "a growing range of financial products and the need for in-depth knowledge of geographic regions are expected to lead to strong employment growth." The statistics are in your favor considering how popular a career path this is.

Financial analysts can be divided into two categories, according to Truity: buy-side analysts and sell-side analysts.
Buy-side analysts develop investment strategies for companies that have the money to invest — institutional investors such as hedge funds, insurance companies and nonprofit organizations with large endowments.
"They help their employers make decisions on how to spend their money, whether that means investing in stocks and other securities for an in-house fund, buying income properties (in the case of a real estate investment firm) or allocating marketing dollars," according to Investopedia. "Some analysts perform their jobs not for a specific employer but for a third-party company that provides financial analysis to its clients. This shows the value of what a financial analyst does; an entire industry exists around it."
Meanwhile, sell-side analysts advise sales agents who sell stocks, bonds and other types of investments.
"At a sell-side firm, analysts evaluate and compare the quality of securities in a given sector or industry," according to Investopedia. "Based on this analysis, they then write research reports with certain recommendations, such as 'buy,' 'sell,' 'strong buy,' 'strong sell' or 'hold.' They also track the stocks that are in a fund's portfolio in order to determine when or if the fund's position in that stock should be sold.The recommendations of these research analysts carry a great deal of weight in the investment industry, including with those working within buy-side firms."
There are also subspecialties of financial analysts such as the following examples:
  • Portfolio Managers — They manage the overall performance of the portfolio and explain investment decisions and strategies in stakeholder meetings.
  • Fund Managers — They work exclusively with hedge or mutual funds to make buy or sell decisions.
  • Ratings Analysts — They evaluate companies' abilities to pay their debts and rate the risk of those companies.
  • Risk Analysts — They evaluate the risk in investment decisions and try to limit potential losses.

How Do You Become a Financial Analyst?

The financial services industry is competitive, which means breaking into it can be tough. That's why getting the education and experience you need to rise above the rest is key.
"Compared to many high-paying careers, the qualifications to become a financial analyst are much less rigid and well-defined," according to Investopedia. "Unlike law and medicine, no career-wide educational minimums exist. Whether you face any required licensing depends on a few factors, such as your employer and specific job duties."

What Education is Required?

According to the BLS, a bachelor's degree is typically required to become a financial analyst. If you're wondering, What major is a financial analyst?, there's no specific major necessary. Though there are some recommended majors. A number of fields of study would appropriately prepare you, including accounting, economics, finance, statistics and mathematics. Other majors that might be helpful include biology and engineering due to the analytical skills necessary. 

That all said, according to Investopedia, "the big investment banks, where the huge first-year salaries get paid, recruit almost exclusively at elite colleges and universities such as Harvard and Princeton." Candidates applying with degrees from non-elite schools might want to consider getting themselves an MBA from a highly ranked business school, since MBA graduates have a better shot of getting hired as senior analysts out of school.
You may also want to consider taking the Series 7 and Series 63 exams or participating in the Chartered Financial Analyst (CFA®) Program. The Series 7 exam will require sponsorship from a Financial Industry Regulatory Authority (FINRA) member firm or regulatory organization.
"While the CFA exam is highly technical, the Series 7 and 63 exams are other ways to demonstrate a basic familiarity with investment terms and accounting practices," according to Investopedia. "If you look at a sample CFA exam and it seems overwhelming, start by taking the SIE and then work your way up to the CFA exam, or begin to interview for junior analyst positions after passing the SIE. Many institutions also have training programs for those candidates who show promise in the field."

Financial analysts can eventually become CFA certified if they have a bachelor’s degree, four years of qualified work experience, and once they pass three exams. Then they can go on to also get certified in their field of specialty.

What Are the Top Three Skills for a Financial Analyst?

On top of having good decision-making skills and being detail-oriented, financial analysts have to possess these three very key skills:

1. Analytical/Math skills. Financial analysts must be able to mentally process information and use mathematical skills when estimating the value of financial situations.
2. Communication skills. Financial analysts must be able to effectively and clearly communicate their recommendations to clients in a way they can understand.
3. Computer skills. Financial analysts must be skilled at using a variety of software that they'll need to analyze trends, create portfolios and make predictions.


AnnaMarie Houlis is a multimedia journalist and an adventure aficionado with a keen cultural curiosity and an affinity for solo travel. She's an editor by day and a travel blogger at by night.