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Financial Analysts

Financial analysts evaluate the economic performance and financial situation of companies and industries on behalf of companies and institutions which invest money. Financial analysts evaluate the feasibility of a deal and develop a plan of action based on financial analysis. Financial analysts make investment decisions or recommendations. They're also called investment analysts and securities analysts.

Financial analysts are employed by investment banks, pension funds, insurance companies, mutual funds, securities firms, the business media and other types of businesses. They often focus on a particular industry, product or region. In addition, a financial analyst must keep up-to-date with movements of the markets, news stories and industry profiles.

Financial analysts that are employed on the "buy side" work for institutional investors. They develop investment strategies for a company's portfolio. Financial analysts that are employed on the "sell side" assist security dealers at investment banks, securities firms and other businesses with selling their products.

Financial analysts fields of specialization:

  • Credit analysts
  • Ratings analysts
  • Budget analysts
  • Risk analysts
  • Money market analysts
  • Tax analysts
  • Investment analysts
  • Wall Street analysts
  • Security analysts
  • Mergers and acquisitions analysts

Responsibilities

  • Develop investment strategies for a company's portfolio
  • Analyze company financial statements
  • Stay current with new policies and regulations that might affect investments
  • Evaluate current trends in business practices, competition and products
  • Assess the ability to repay debts by governments and companies that issue bonds
  • Assist security dealers with selling their products
  • Create reports and make presentations
  • Observe the economy in order to determine its effect on earnings
  • Assist companies with creating their investment portfolio
  • Perform cost, budget and credit analysis

Job Characteristics

A financial analyst needs to have good analytical, math and problem solving skills. Good communication skills, being detail oriented and the ability to work independently are also important. They need to be able to interact well with clients. In addition, dealing with deadlines is often part of the job.

Financial analysts need a strong foundation in the economy, money markets and tax laws. They should also have good computer skills. The job sometimes involves traveling in order to visit potential investors or companies. They sometimes work more than 40 hours per week. They also spend a lot of time in meetings and telephone conversations.

Employment Outlook

The Bureau of Labor Statistics forecasts the employment of financial analysts will increase by 34% from 2006 to 2016 which is much faster than the average for all occupations. The major factors for the expected employment growth are the complexities of investments, the growth of the industry and the demand from mutual fund companies.

More than two out of five financial analysts are employed in the finance and insurance industries. Some work for the government and also throughout private industry.

In 2006 the median annual earnings, including bonuses, for financial analysts was $66,590. Bonuses can be a significant portion of their total earnings. Many companies offer lucrative bonuses in order to attract and keep important employees.

Financial analysts have opportunities to take positions as finance or portfolio managers, which manage the investments of a company or a customer. A qualified financial analyst can move up to a senior financial analyst position or an associate position. Some financial analysts start their own financial consulting firm. Some financial analysts become investment bankers, management consultants and financial consultants.

Education, Certification, and Licensing

Most employers require financial analysts to have at least a bachelor's degree in finance, economics, statistics, accounting or business administration. Courses in economics, statistics and business are typically required. Advanced courses in bond evaluation and options pricing are useful. Some employers prefer candidates that have a master's degree in finance or business administration.

Candidates should have knowledge of corporate budgeting, accounting policies and procedures, and financial analysis methods. A strong foundation in risk management is also useful.

The firms provide training. Financial analysts frequently attend seminars and training sessions in order to stay current with the latest developments.

The main licensing organization for the securities industry is the Financial Industry Regulatory Authority. Most of the licenses require sponsorship from an employer, thus companies don't expect workers to have licenses before they begin the job.

Resources

Major Employers

Most of the jobs are provided by investment banks, financial advising firms, mutual funds, investment funds, insurance companies and hedge funds.

Schools for Financial Analysts are listed in the Browse Schools Section.

Financial Analysts Skills

Below are the skills needed to be financial analysts according to their importance on the scale of 1 to 5 (1 being lowest and 5 being highest) and competency level on a scale of 1 to 7 (1 being lowest and 7 being highest).

   
Skill NameImportanceCompetence
Critical Thinking4.124.12
Reading Comprehension44.12
Mathematics3.884.12
Active Listening3.883.88
Writing3.754.12

Financial Analysts Abilities

Below are the abilities needed to be financial analysts according to their importance on the scale of 1 to 5 (1 being lowest and 5 being highest) and competency level on a scale of 1 to 7 (1 being lowest and 7 being highest).

   
Ability NameImportanceCompetence
Oral Comprehension44.38
Oral Expression44.38
Written Expression44.12
Near Vision44.12
Written Comprehension44.5

Financial Analysts Knowledge

Below are the knowledge areas needed to be financial analysts according to their importance on the scale of 1 to 5 (1 being lowest and 5 being highest) and competency level on a scale of 1 to 7 (1 being lowest and 7 being highest).

   
Knowledge AreaImportanceCompetence
Economics and Accounting4.695.83
English Language4.395.16
Mathematics4.315.73
Computers and Electronics3.964.73
Communications and Media3.452.99

Financial Analysts Work activities

Below are the work activities involved in being financial analysts according to their importance on the scale of 1 to 5 (1 being lowest and 5 being highest) and competency level on a scale of 1 to 7 (1 being lowest and 5 being highest).

   
Work ActivityImportanceCompetence
Interacting With Computers4.854.05
Getting Information4.585.88
Analyzing Data or Information4.575.86
Processing Information4.395.52
Identifying Objects, Actions, and Events4.215.43

Financial Analysts Work styles

Below are the work styles involved in being financial analysts according to their importance on the scale of 1 to 5 (1 being lowest and 5 being highest).

   
Work StyleImportance
Analytical Thinking4.99
Attention to Detail4.86
Adaptability/Flexibility4.75
Dependability4.65
Achievement/Effort4.63

Metro Areas Sorted by Total Employment for
Financial Analysts

Listed below are the 10 largest metro areas based on the total number of people employed in Financial Analysts jobs , as of 2017

   
Metro AreaTotal EmploymentAnnual Mean Salary
Los Angeles-Long Beach-Anaheim12,340 $102,470
San Francisco-Oakland-Hayward10,310 $127,800
Dallas-Fort Worth-Arlington10,210 $91,410
Houston-The Woodlands-Sugar Land8,860 $99,820
San Jose-Sunnyvale-Santa Clara5,270 $115,820
Atlanta-Sandy Springs-Roswell5,260 $82,760
Phoenix-Mesa-Scottsdale4,840 $78,920
Seattle-Tacoma-Bellevue4,650 $92,910
Miami-Fort Lauderdale-West Palm Beach4,050 $78,190
Detroit-Warren-Dearborn4,050 $86,460

Compare Total Employment & Salaries for Financial Analysts

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Employment
Salary

Total employment and salary for professions similar to financial analysts

Source : 2017 Occupational Employment Statistics and 2016-26 Employment Projections, Bureau of Labor Statistics, BLS.gov; O*NET® 22.1 Database, O*NET OnLine, National Center for O*NET Development, Employment & Training Administration, U.S. Department of Labor, onetonline.org

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We have some additional detailed pages at the state level for Financial Analysts.

Numbers in parentheses are counts of relevant campus-based schools in the state; online schools may also be available.