The field is competitive, but salaries in the mid to senior level are above average, and the job outlook is generally very positive. So, knowing how to become a financial analyst can be a good first step in improving your prospects. Entry-level positions can be extremely competitive, and many financial analysts put in long hours early in the career, looking forward to a sizable paycheck as they advance to more senior positions.
See below for more tips on how to become a financial analyst.
Key Takeaways
- What is a financial analyst? A financial analyst is a highly skilled who keeps their fingers on the pulse of the economy and helps their clients make critical decisions related to overall financial strategy, investments, and wealth management.
- Financial analysts can make higher than average salaries, with work in the financial services industry offering the most lucrative pay. As of May 2021, the median annual wage for financial analysts was $91,580, according to the U.S. Bureau of Labor Statistics. In the financial services industry, these workers earn a mean annual salary of $124,020.
- The job outlook for financial analysts is excellent as the global financial market is experiencing monumental growth and that is expected to continue, providing many opportunities for financial analyst jobs and many diverse career paths for financial analysts.
What does a financial analyst do?
In highly sought-after industries like investment banking, asset management, insurance, and corporate finance, a financial analyst is a skilled professional who specializes in analyzing financial data to help individuals or companies make informed investment decisions. Financial analysts typically examine financial statements, economic trends, and other financial data to assess the performance of companies or markets.
A financial analyst is responsible for a variety of research tasks in order to inform investment strategy and make investment decisions for their company or clients. This can include things like evaluating financial data, examining current events and market developments, examining an organization’s financial statements, and creating financial models to predict future performance.
Financial analysts may work in a variety of industries, including investment banking, asset management, insurance, and corporate finance. They may also work for government agencies, non-profit organizations, or as independent consultants.
What is a typical financial analyst career path?
Depending on the position, financial analysts can monitor macroeconomic trends or have a narrow focus on specific sectors and industries. These roles are data-intensive and require strong mathematical and analytical skills.
Given the value of their role, financial analysts can be employed by large corporations such as investment banks, insurance companies, mutual funds, hedge funds, pension funds, securities firms, investment firms, private equity groups, venture capital firms, government agencies, and similar types of organizations.
A day in the life of a senior financial analyst will likely involve the supervisory work of junior analysts, the synthesis of junior analyst findings to finalize client recommendations or insights, and direct networking with clients. Depending on the senior analyst’s position on the buy side vs. the sell side, there may be travel requirements involved in the course of client meetings and presentations.
In general terms, financial analysts do exactly what their title implies: They advise companies and individuals on the most profitable investments. These professionals must be able to distill large amounts of information into concise recommendations.
Finance analysts assess whether a company is worth investing in by poring through the company’s financial history. These professionals may also help companies decide how to invest in growing industries. Financial analysts are responsible for studying economic, political, and global trends to make recommendations.
While financial analysts need a broad understanding of the market, they aren’t expected to know everything. Analysts tend to focus on one industry, region, or product, and they build expertise in their specialty area.
What are the requirements for financial analyst jobs?
For the financial analyst career path, there are several core competencies and financial analyst requirements that an individual can develop through their education and early career experiences.
Most entry-level financial analyst jobs require a bachelor’s degree in accounting, finance, business administration, or a related field such as statistics, economics, or general business. In some cases, you may be able to substitute a formal degree with several years of relevant experience, but a degree like UM’s online Master of Science in Finance will likely make you a more competitive candidate. The coursework covers essential industry matters like statistical analysis, economic theory, strategic management, and more. At UM, students can also earn one of two certificates offered as part of the online finance master’s program or as a separate mode of study.
Whether your goal is to springboard your career in finance, enhance your professional value, or increase your earning potential, UM’s online master’s in finance program faculty go above and beyond to provide expert guidance on the financial analyst requirements and career path.
Senior financial analyst positions tend to have a heavier emphasis on communicating directly with high-ranking client contacts, speaking with company management, and developing marketing ideas to promote financial analyst services to potential new clients.
Therefore, having experience in demonstrating good communication skills to develop client relationships with company officials is essential to have a successful career. Also, proving one’s ability to think strategically on behalf of clients is another way to improve chances of career advancement into a more senior role.
What is the best financial analyst degree?
Whether you are continuing your education as a university student who wants to develop skills for a future career as a financial analyst, or you are a junior analyst who wants to advance professionally in the field, focusing on developing financial analyst skills is key.
Most firms require candidates to have at least a bachelor’s degree. The Chartered Financial Analyst Institute recommends a finance-related major such as a bachelor’s degree in accounting, finance, statistics, economics, or general business.
Financial analyst industry certification
Entry-level licenses for financial analysts are available from the Financial Industry Regulatory Authority (FINRA). FINRA regulates the securities industry and offers dozens of exams for various job types. Most of these exams require employer sponsorship.
In most cases, financial analysts must pass the Securities Industry Essentials® exam, which covers basic information about the industry. General securities representatives must pass the Series 7 exam.
After gaining some work experience, analysts may pursue the Chartered Financial Analyst (CFA) charter, administered by the CFA Institute.
CFA candidates must have a bachelor’s degree or be within 11 months of completing one. If not, they should have a significant amount of work and/or higher education experience over at least three years. They also need an international passport, a few professional references, and 4,000 hours of qualifying work experience.
Do I need a master's degree in finance?
While most employers don’t require a master’s degree for entry-level positions in finance, an advanced degree in finance can help you move up to the next stage of the financial analyst career path.
With a proven track record and the additional credibility of a master's degree in finance, a financial analyst can advance to a role as a portfolio manager or a fund manager for wealthy individual investors. An advanced degree also demonstrates an analyst’s communication and business knowledge.
Four areas of valuable skill for financial analysts in the investment industry include analytical and math skills, industry or sector expertise (including awareness of the regulatory environment), awareness of global current events, and persuasive communication skills.
Financial analysts should, of course, have analytical minds and be detail-oriented in their research. They need both strong math skills and computer literacy, as analysts use software to look at trends and make forecasts.
What are the opportunities for advancement in the financial analyst career path?
Career advancement for senior analysts can include becoming a portfolio manager or fund manager where they manage a company's investment portfolio. They have the ability to move into high-ranking roles in investment banking.
If you enjoy analytical work that produces actionable insights on behalf of clients making lucrative financial decisions, then this job could be a great career path for you.
The career path of a financial analyst can vary depending on the individual's interests, experience, and goals. While a master’s degree in finance can springboard your career, our certificates – the Certificate in Corporate Finance and the Certificate in Financial Decision Making – can also augment your career path into leadership, as well as increase your earning potential and overall professional value to an organization.
Entry-level financial analysts: An entry-level financial analyst position is usually the starting point for most financial analysts. They work under the supervision of a more experienced analyst and are responsible for tasks such as collecting financial data, creating financial models, and conducting research.
Senior financial analysts: After gaining a few years of experience as an entry-level analyst, individuals can progress to a senior financial analyst role. In this role, they take on more complex projects and are responsible for providing financial insights to senior management.
Managerial roles: After several years of experience as a senior financial analyst, individuals may move into managerial roles such as finance manager or director of finance. These roles involve managing a team of analysts and providing financial guidance to the organization.
Executive roles: The highest level of financial analyst positions can include roles such as chief financial officer (CFO) or chief investment officer (CIO). In these roles, individuals are responsible for the overall financial strategy of the organization.
What is the job outlook for financial analysts?
Overall, the prospects for financial analyst jobs are positive, with strong demand, competitive salaries, diverse opportunities, and opportunities for advancement and career growth.
Competition for these jobs is fierce, especially among analysts new to the field.
According to US News & World Report, Financial Analyst ranks #7 in Best Business Jobs and #23 in 100 Best Jobs overall.
The field is also growing at a steady pace. The Bureau of Labor Statistics (BLS) projects employment for financial and investment analysts to grow by 9% from 2021 to 2031, which is faster than the average projected growth for all jobs. This amounts to about 32,000 new financial analyst jobs by 2031.
Increases in economic activity affect the demand for financial analysts. Expanding and emerging industries require the help of financial analysts to guide their growth. Globalization is a factor as well. As more markets develop around the world, companies need analysts to advise on where to expand or invest. The BLS predicts that these investors will hire financial analysts who have a deep understanding of political, economic, and cultural trends in the geographical areas at play.
How can an online master’s degree in finance improve my job prospects?
A master's degree in finance can provide you with a range of skills and knowledge that can be valuable for advancing your career in the finance industry.
At UM, the online Master of Science in Finance program provides a holistic study of financial principles and executive leadership. Coursework covers essential industry matters like statistical analysis, economic theory, strategic management, and more.
Students can earn one of two certificates – the Certificate in Financial Decision Making and the Certificate in Corporate Finance – offered as part of the online finance master’s program or as a separate mode of study. Whether your goal is to springboard your career in finance, enhance your professional value, or increase your earning potential, our faculty goes above and beyond to assist you with expert guidance.
The UOnline Master of Science in Finance program creates an opportunity to learn from the experience of your professors and fellow students to drive both academic and experience-based learning in your virtual classroom.
Graduates are equipped with world-class knowledge and definitive business management abilities that will enhance their career prospects and augment their pathway to leadership.
Overall, a master's in finance provides specialized knowledge and skills in areas such as financial analysis, financial management, risk management, investment banking, and asset management. This can make you more attractive to employers who require specific skills. Our certificate programs – either in Corporate Finance or Financial Decision Making – introduce students to advanced finance topics, integrating conceptual and applied case methodologies to develop practical solutions to real-world problems.
A master's in finance can also help you develop a professional network of peers and professors who can provide mentorship, job leads, and connections to other professionals in the field. Our top-ranked UM faculty are unmatched experts in their fields with the professional and practical experience to connect you to the latest trends in your degree program, the best practices in your discipline, and the best opportunities for career advancement. University of Miami graduates gain access to the expansive University of Miami global alumni network and become 'Canes for Life.
In addition, securing a master's in finance can help you advance in your career by providing you with the necessary skills and knowledge to take on higher-level positions. You may also be able to command a higher salary with a master's degree.
A master's in finance can give you credibility in the eyes of potential employers and clients, as it demonstrates your commitment to the field and your willingness to invest in your education.
In addition, a master’s in finance can give you international experience, which can help you develop a global perspective on finance and business. This can be valuable in today's globalized economy. At UM, our faculty are acknowledged thought leaders, recognized worldwide for their cutting-edge research. Their work drives business change and helps shape public policy, while their classroom commitment guides the next generation of global business leaders.
Finance involves a lot of data analysis and quantitative skills. A master's degree in finance provides you with a deep understanding of financial theory, concepts, and practices. This knowledge can help you perform your job more effectively and make better-informed decisions. By earning a master's degree in finance, you will enhance your analytical and quantitative skills, which can help you excel in finance-related positions.
A master's in finance can be a valuable investment in your career, providing you with specialized knowledge, a professional network, career advancement opportunities, credibility, and a global perspective.
In addition, many master's programs in finance offer opportunities for internships, case studies, and projects that simulate real-world scenarios. These experiences can help you gain industry-relevant experience, which is valuable to potential employers. In addition, the UM Master of Finance Program provides students with access to highly trained career advisors as they move forward to advance their careers.
UOnline students have access to the same career resources as on-campus students. Resources such as networking opportunities, career fairs (on-campus and virtual), shadowing opportunities with potential employers, skill development, resume building, and interview preparation prepare students to achieve their professional aspirations.
A master's degree in finance is often viewed as a valuable credential in the financial industry. It can lead to higher salaries, better job titles, and more career advancement opportunities. Overall, a master's degree in finance can help you develop the knowledge, skills, and experience necessary to advance your career in finance and increase your earning potential.
For up-to-date salary estimates, run a search for your desired position on the U.S. Bureau of Labor Statistics website.
