The success of an investment can turn on factors such as company earnings, the quality of management and economic conditions. Financial analysts process this information to recommend, buy or sell investments. The Financial Analyst Job Description details the tasks, skills, education and training required to render informed opinions and decisions on investments. It also explains the impact of licensing and certification on career prospects.
Job Overview: What Does a Financial Analyst Do?
The Financial Analyst Job Description requires the professional to consider several pieces of data. In fact, financial analysts consider information such as profits, cash flow and management practices to evaluate companies. Furthermore, politics, economic conditions and events in a particular region can also affect firms.
Financial Analyst Job Duties
- Find and recommend individual or groups of investments to acquire or offer for sale.
- Assess a company or firm’s past or present financial performance, such as profits, losses, values.
- Analyze business and economic trends in sectors or categories such as industries, countries and geographic regions.
- Determine a company’s value by examining its financial statements, such as balance sheets, income statements and cash flow statements.
- Research a company’s background, management, organization, activities and performance through reading articles and reports and interviewing directors and officers.
- Prepare reports detailing analysis, performance (past, present and future) and the effects of various events or economic conditions on a firm, industry or economy.
A Financial Analyst working in her office (Wikipedia-Financial)
Financial Analyst Job Essential Skills
Analytical Skills. The financial analyst job description involves analyzing financial statements, reports, news accounts and data to determine the suitability of stocks, bonds and other investments.
Decision making Skills. Financial analysts must recommend what investments and when to buy, hold or sell and how to fashion investment portfolios.
Research Abilities. The acquisition of information, even including from obscure sources, shapes the advice and decisions of financial analysts. These professionals must probe company management to learn their strategies and practices. Research also includes finding news accounts, reports, social media posts and other information in the public domain.
Math Skills. Any financial analyst job description includes mandatory math skills. These professionals must be able to calculate cash flows, profits and various financial ratios to arrive at reliable estimates of a company’s value.
Computer Skills. Financial analysts rely upon computers apps and models to forecast future earnings, cash flow and economic indicators such as gross national product.
A financial analyst cross checking data (chartered-financial -analyst)
Financial analysts usually must earn at least a bachelor of science in business administration or finance. A master’s degree in business administration or finance can enhance job prospects. Many financial analysts seek or take positions, such as securities brokerage or dealing, that require a license from the Financial Industry Regulatory Authority.
Qualification & Training
As a minimum, a financial analyst must earn a bachelor of science in business administration or finance. However, employers seek those with MBAs, online MBA or a master’s in finance to hold advanced or supervisory positions. Classes in undergraduate and master’s programs cover subjects such as math, accounting, statistics, finance, economics, pricing and valuation of securities and risk management.
A financial analyst must be registered, or licensed, by the Financial Industry Regulatory Authority to participate in securities transactions for clients. Candidates are tested on subject such as securities regulation, the securities industry and its structure, types of securities and financial operations. Financial analysts must distinguish among bonds, stocks, options and other securities. Some of the tests are required to hold supervisory jobs in the securities industry.
With four years of professional experience, which does not have to involve investment work, and a bachelor’s degree, analysts can test for and obtain certification as a Chartered Financial Analyst (CFA). The CFA course of study includes subjects such as ethics, financial statements, securities, corporations and tools to analyze markets.
Work Experience
Financial analysts typically begin their work in a specific field or type of security. Having 2-4 years of relevant experience in corporate finance, financial planning & analysis, investment banking, or other related fields increase the prospects of becoming financial analyst. As experience grows, the financial analyst might turn to portfolio or fund management. As a portfolio manager, a financial analyst selects the right mix of securities for a company portfolio. Fund managers focus on individual investors, taking into account their tolerance for risk and goals for returns. Experience is typically required to sit for licensing exams from FINRA in order to hold these and other positions involving the sale or purchase of securities or supervision of these activities.
Working Hours
Financial analysts work in offices. Most work full time, and some work more than 40 hours per week. Financial and investment analysts held about 317,200 jobs in 2022. Financial analysts work primarily in offices but may travel to visit companies or clients. Analysts may research and analyze reports after the close of business. During office hours, financial analysts often place and return calls or email messages.
With corporations operating globally, financial analysts must track events in places or execute trades in markets in different time zones. Even within the United States, financial analysts along the West Coast might start their days as early as 5 a.m. to 6 a.m. to be ready for the opening of markets in New York around 9:30 a.m. Eastern Time.
Job Outlook & Advancement Opportunities
The U.S. Bureau of Labor Statistics reports that, in May 2022, financial analysts averaged a salary of $108,790 per year. The median annual wage for financial risk specialists was $102,120 in May 2022. The lowest 10 percent earned less than $59,510, and the highest 10 percent earned more than $175,720.
A financial analyst reading the financial trend (edhec.edu-financial-analyst)
According to the U.S. Bureau of Labor Statistics, employment of financial analysts is projected to grow 8 percent from 2022 to 2032, faster than the average for all occupations. About 27,400 openings for financial analysts are projected each year, on average, over the decade. Demand for financial analysts could increase because of complex and diverse securities and other financial products. Investors and financial firms may seek analysts with expertise or knowledge in emerging markets or foreign regions.
Conclusion
To conclude, financial analysts receive education, training, licensing and certifications that prepare them to evaluate investments and companies for individual or institutional clients. As a result, financial analyst career can offer salaries above $100,000, depending on experience, certifications and the ability to land senior or supervisory positions. Candidates can enhance their employment prospects by exhibiting a grasp of international and emerging markets, and being aware of the requirements in financial analyst job description.
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FAQ
Although many employers favor candidates with postgraduate degrees, financial analysts often hold a bachelor’s degree. You can acquire the theoretical and analytical abilities required for this line of work with a degree in finance.
Internships that provide a career path into managerial roles are available. This enables you to set more deliberate goals for your career. Acquiring certificates can enhance your resume and demonstrate your abilities to prospective employers. You may concentrate on risk analysis, which frequently entails assisting businesses in estimating the likelihood of profits and losses on investments.
Indeed, obtaining specific qualifications is necessary to work as a financial analyst. A bachelor’s degree in finance, accounting, economics, or a similar discipline is one of these prerequisites. A master’s degree in a relevant discipline, like an MBA, or professional qualifications, like the Certified Financial Planner (CFP) or Chartered Financial Analyst (CFA) designation, may also be required by certain employers.
An understanding of financial analysis methods, including forecasting, modeling, and financial ratios; comprehension of financial statements, operations management, and financial planning; the capacity to spot patterns and trends in financial data and extrapolate significant insights from them; skills in Microsoft Excel and other financial analytical software; the capacity to provide clear explanations of complicated concepts; and capacity to cooperate with partners and function well in a group.
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