How To Become a Financial Analyst

If you’re a data-driven individual who works well with numbers, you might have considered pursuing a career in finance. Jobs in this field require attention to detail, a strong analytical mind, and the ability to explain complex financial information in an easily understood way.

One such career is financial analyst, which is a good entry-level finance job for several reasons. In the role, you will scrutinize financial activities and become intimately familiar with important financial principles. You’ll also have the opportunity to hone key skills in finance. You’ll see opportunities for advancement, which makes this a versatile foundational option if you’re considering jobs you can get with a bachelor’s degree in finance.

Financial Analyst Job Description

A financial analyst is a popular career choice in finance, with an estimated 373,800 people holding the role in 2021. These finance professionals offer guidance to businesses and investors on stocks, bonds, and other investment opportunities. The day-to-day tasks of a financial analyst typically consist of:

  • Evaluating current and past financial data: Financial analysts spend much of their time gathering and interpreting complex financial data, both from internal sources within their organization and external sources like industry reports and economic forecasts.
  • Recommending different investments and portfolios: These professionals use their findings to make informed recommendations on investment decisions, which involve things like suggesting when to buy or sell certain securities.
  • Preparing written reports on financial analysis: Financial analysts frequently prepare reports and present them to company leadership and clients. These include recommendations about investment strategies and potential business ventures.
  • Studying business and economic trends: To offer the best analysis, financial analysts need to monitor trends affecting their industry, as well as other influences that could impact their organization’s investment portfolio.

The role of financial analyst requires strong analytical, decision-making, and communication skills. It is a career that offers a unique opportunity to apply financial skills in a variety of industries.

Required Skills for a Financial Analyst

To perform their job effectively, financial analysts must possess several hard and soft skills. These include:

  • Financial analysis: An essential part of the job is interpreting financial data, understanding statements, and performing quantitative analysis.
  • Financial modeling: Financial analysts must be able to create and interpret financial models to forecast future scenarios based on current and historical data.
  • Mathematical skills: Calculating figures like financial ratios, growth rates, and other types of quantitative analysis requires analysts to have a strong background in mathematics.
  • Communication skills: Financial analysts need to explain complex financial concepts clearly and concisely to clients or others who may not have a financial background.
  • Decision-making: In this role, it is often necessary to be able to make informed, high-stakes decisions under time pressure.
  • Problem-solving skills: The ability to think critically and create solutions to problems is crucial when analyzing financial data and making recommendations.

Different organizations may require different skills, for example, knowledge based on the specific industry. Others may have more technical requirements such as computer programming skills for manipulating data.

Education and Certification Requirements for Financial Analysts

Typically, entry-level financial analysts are required to have a bachelor’s degree in finance, economics, statistics, accounting, or another related field. These degrees help you build the skill base you need to perform your job successfully.

Some roles or functions of the job may require a license from the Financial Industry Regulatory Authority. However, many of these licenses require employer sponsorship, so they typically aren’t employment prerequisites.

To progress in their careers, financial analysts might also work to achieve their Chartered Financial Analyst certification (CFA), a distinction that requires a bachelor’s degree, 4,000 hours of work experience, and passing grades on three exams. Many financial analysts go on to pursue a master’s degree in finance to improve their knowledge and increase their credibility.

Aside from degrees and certifications, financial analysts should have excellent analytical, communication, decision-making, technical, and math skills. A bachelor’s degree in finance can help students develop these skills through high-level courses and hands-on experience through internships.

Financial Analyst Salary and Job Outlook

According to the U.S. Bureau of Labor Statistics, the median yearly wage for financial analysts is $91,580, as of May 2021. The lowest 10% of earners made around $57,900, and the highest 10% made $166,560. Most financial analysts can expect to work full-time, but may have to work more than 40 hours a week.

The BLS estimates the role to grow by 9% from 2021-2023, which is greater than the national average of 5% across all careers.

Financial Analyst Career Path and Advancement

There are a variety of specialized career paths financial analysts can pursue. Depending on what area of finance they’d like to work in, these professionals can choose one of the following specializations:

  • Portfolio managers curate collections of investments for their companies. They are responsible for the performance of portfolios.
  • Fund managers focus on hedge funds or mutual funds. They may be expected to make quick buy-and-sell decisions in response to changing market conditions.
  • Ratings analysts evaluate companies on their ability to remain profitable and successful. Their analyses help inform management teams on whether they should invest in select companies.
  • Risk analysts review specific investment decisions to determine their risk levels. They will then develop a plan on how to limit potential losses and deal with unpredictable circumstances.

Beyond these specific titles, financial analysts may focus on the buy or sell side of investment opportunities. A financial analyst on the buy side will work with companies with large budgets such as hedge funds, insurance companies, nonprofit organizations with endowment funds, and independent money managers. An analyst on the sell side will work with financial services sales agents, informing these salespeople about investment opportunities like stocks and bonds.

Additionally, as international markets fluctuate, investors will turn to knowledgeable analysts to help them navigate complicated investment areas.



U.S. Bureau of Labor Statistics, “Financial Analysts: Occupational Outlook Handbook”


CFA Institute, “Charter Program”