How to Become a Financial Analyst

Welcome, future financial whiz!

You stand at the crossroads of possibility, and one question nags at you: Is becoming a Financial Analyst your true calling?

Whether your Inner GPS has landed you here or you are keen on exploring the possibilities of becoming a Financial Analyst, I assure you are at the best platform. 

It is a question that many of you grapple with as you begin your journey into the professional world.

Starting a career as a financial analyst can be overwhelming—many technical terms, checklists of tens of tasks to do, learning resources contradicting each other, and the list goes on.

To become a financial analyst:

  • You need a bachelor’s degree in finance, accounting, economics, or a related field

  • Additionally, gaining relevant internships or work experience in finance is crucial for building practical skills and networking with professionals in the financial industry.

  • Finally, consider pursuing professional certifications like the Chartered Financial Analyst (CFA) designation to enhance your credibility and career prospects in this field.

However, sometimes all you need are ideas to get your dream alive and kicking and to give you a leg up when entering a new field.

This journey will be a blend of learning, challenges, and self-discovery. 

That is why, in this guide, I have put together a comprehensive guide to becoming a financial analyst that is easy to follow and actionable, too.

In every section below, I have shared insights, examples, and actionable strategies to give your career wings quickly. It is a mentorship opportunity.

Ready to learn? Let’s get started.

How to Become A Financial Analyst- Practical Steps

How to Become A Financial Analyst

You will learn in this section some of the qualifications and skills needed to break into the finance or financial analyst salary career. It should also help you decide on what type of financial analyst career you want to be. Let’s take a look.

In a world filled with diverse career paths, finance stands out as a field where numbers come alive, telling stories about the heartbeat of businesses and economies. It is like solving puzzles with real-world implications, a bit like being a financial detective.

Imagine deciphering the financial health of companies, helping individuals make smart investment choices, and even influencing the strategies that shape the business landscape. These are just a few of the exciting avenues that open up when you dive into the world of financial analysis.

But beyond the allure of numbers, it’s important to consider your inner calling. 

  • What drives you? 

  • What ignites that spark of curiosity? 

  • Can you see yourself immersed in the world of finance, day in and day out, striving to understand the financial tapestry that underpins our society?

This journey will be a blend of learning, challenges, and self-discovery. 

So, if you are ready to explore whether financial analysis is your true passion, let us start with the steps of becoming a financial analyst and uncover the path that resonates with you.

Step1. Education and qualifications

The pathway to becoming a financial analyst is well-defined. 

What qualifications do I need to be a financial analyst?

Let’s examine what academic qualifications you need for an entry-level financial analyst.

  1. Earn a relevant bachelor’s degree: Earn a bachelor’s degree in a subject related to finance, such as business, economics, statistics, accounting, or finance, from an elite university or college, such as Harvard. It will take you three years of full-time study.

  2. Coursework: Relevant coursework during your undergraduate studies is essential. It typically includes financial accounting, corporate finance, investments, statistics, and economics. These courses lay the groundwork for understanding financial markets, risk assessment, and investment analysis.

  3. Earn a master’s degree in a finance-related field (optional): Without mincing words, the competition for financial analyst positions is very high. After completing all of the above steps, my secret is to go for a relevant MBA. Getting it should take two years of study, but it will prove helpful.

You will learn advanced analytical skills in advanced auditing, financial accounting and reporting, managerial methods, strategic analysis, and other finance-related major topics.

  • It will improve your knowledge, business knowledge, and communication skills and spark interest from employers.

  • Additionally, with a proven track record, you can advance to a role as a portfolio manager or a fund manager for top investors.

Now that you have fully settled on the academic qualifications and analytical skills needed to become a financial analyst let’s proceed to the skills you, as an aspiring financial analyst, have that are necessary for this field.

Step 2: Skills and competencies

Beyond classroom learning, focus on skill development.

  • Cultivate your quantitative and analytical abilities, as financial analysts must work with data and regularly perform complex calculations. Proficiency in spreadsheet software like Microsoft Excel is invaluable.

  • As important as the academic qualifications are the skill sets. Many hiring managers and firms take their time to assess your skills during interviews and the first few days of your career entry.

To put this into perspective, let’s look at some of the technical, business administration, and soft skills you need to succeed.

Technical and Soft Skills Required for to Become a Financial Analyst

No.Technical skillsSoft skills
1.Financial analysis of financial modelsProject management
2.Financial planningCommunication
4.Data analysis of past financial dataTeamwork
5.BudgetingTime management
6.Strategic reportingResearch
7.Risk analysisLeadership
Business administration

Step 3. Internships and gaining practical experience

Financial Analyst Internships

While not strictly part of your educational requirements, securing internships or entry-level positions during your studies is highly advisable. It’s one thing to be a graduate or licensed professional in the finance field, and it’s another to be able to execute your responsibilities as a financial analyst.

  • Practical experience allows you to apply classroom knowledge in real-world scenarios, build a professional network, and enhance your resume.

  • In addition to that, the competition among job seekers is high, which is why having a master’s degree or bachelor’s degree and practical experience will give you a competitive advantage over the rest.

  • To build your wealth of experience, you can start by seeking an internship or volunteer opportunity while studying to apply your skills under the guidance of experienced financial professionals, portfolio managers ratings analysts, and investment analysts.

Step 4: Attain licensing and certifications

To improve your chances of being employed by top firms, consider pursuing:

  • Chartered Accountant (CA), or

  • Chartered Financial Analyst (CFA) or 

  • Certified Public Accountant (CPA) qualification or

  • Financial Industry Regulatory Authority (FINRA) license.

Why are all these important? For a good reason, all financial services sales agents, other financial investments, financial products, and related firms must comply with specific regulations to protect consumers from unfair practices.

It’s important to note that these certifications require hard work and lots of sacrifices to get them. Some of the key requirements include:

  • A bachelor’s degree in finance or accounting or be within 11 months of completing one

  • A minimum of four years of qualified work experience

  • Passing scores on the three CFA Institute exams

You can read more to shed some light on every type of financial analyst certification.

Step 5: Networking

Networking is invaluable in the finance and investment industry for several reasons. Firstly, it lets professionals stay updated on industry trends and market insights, crucial for making informed investment decisions.

Additionally, networking can lead to new business and investment opportunities, partnerships, existing business expansion, companies to expand upon, and potential clients. It fosters community and collaboration within the finance industry, facilitating the exchange of knowledge and ideas.

Step 6: Job search strategies and application

  • Online Job Boards: Utilize websites like LinkedIn, Indeed, Glassdoor, and specialized finance job boards to search for financial analyst openings.

  • Company Websites: Check the career sections of companies’ websites you’re interested in. Many organizations post job listings directly on their sites.

  • Networking: Leverage your professional network to learn about hidden job opportunities and receive referrals. Attend industry events and join finance-related groups on platforms like LinkedIn.

  • Recruitment Agencies: Consider working with specialized finance recruitment agencies to access job opportunities tailored to your skills.

  • Professional Associations: Join financial associations and access job boards or career resources specific to your field.

  • Resume and cover letter

Step 7: Interview preparation tips

The hiring process for financial analysts is the most rigorous exercise.

But it doesn’t have to be the case for you—because I’m about to share a guide to acing your future interviews.

  1. Research the Company: Understand the company’s financial standing, recent news, and position in the industry. This knowledge will demonstrate your genuine interest.

  2. Review Your Resume: Be ready to discuss your work experience, skills, and accomplishments mentioned in your resume. Be concise and specific in your responses.

  3. Understand the Job Description: Familiarize yourself with the job requirements and responsibilities to align your answers with what the employer is seeking.

  4. Practice Common Questions: Practice your responses to common interview questions to build confidence and clarity in your answers.

  5. Prepare Questions: Prepare thoughtful questions to ask the interviewer. It shows your interest and engagement.

Financial Analysts Common Interview Questions and Answers: 

For details, refer to the following guide: Financial Analysts Common Interview Questions and Answers.

As a good steward of knowledge, it’s important to note that your answers to the above questions should not be set in stone but customized depending on the prevailing situation.

Step 8: Career Progression in Financial Analysis

It is a very lucrative career in finance—you see, financial analyst jobs can work in almost every industry with tons of responsibilities in each. So, what are the different work environments most aspiring financial analysts will work and have?

In this section, we’ll look at the most common types of where financial analysts work. We’ll also look at some of the responsibilities that set them aside.

Responsibilities and Functions of Financial Analysts

Types of Financial AnalystsResponsibilities and Functions
1. Investment banking analystTheir work assists companies and firms in developing or maintaining effective investments that meet their financial goals. Search for potential investment opportunities. Evaluate investments to identify which ones are performing well and which ones the company should consider replacing. Perform client transactions
2. Equity research analystOverseeing client investment portfolios. Making decisions about what securities to hold
3. Treasury analystOversee and manage an organization’s finances, including investment income, liabilities, asset levels, credit, and cash flow. Recommend how a company can maintain or improve its financial health.
4. Financial planning and analysis (FP&A) analystUndertake qualitative and quantitative analysis of a firm’s operations to assess its progress toward meeting its plans and goals. Analyze previous company performance and try to anticipate potential risks and challenges.
5. Corporate development analystOptimize business processes and improve revenueAssess finances and operations, research sales leads, and improve business strategies
6. Risk analystHelp companies invest or expand in new markets or locations. Review plans and provide financial advice to increase or sustain profits, limit risks, and create growth
7.Ratings analystEvaluate and assess the market and a company’s financial abilities and strategies to make educated recommendations on how a company should proceed. 
8. Financial qualitative analystEvaluate investment opportunities and make investment decisions. Assess the performance of bonds, stocks, and other kinds of investments.
9. Budget analystHelp companies monitor their finances by maintaining a balanced budget. Run regular financial reports
10. Portfolio managerCreate and manage investment plans for their clientsAnalyze market developments and trends
11. Hedge fund managerAdvise companies on how to manage their long- and short-term hedge fund investments.

The list of the various types of financial analysts is extensive; there are far more roles within the securities industry. Which one fits you well?

Job Outlook For Entry-Level Financial Analyst Positions

Firms are looking for the right people to help them achieve their goals and objectives without missing a beat—be that person.

If you want to learn more about the job description, see my article, “Entry Level Financial Analyst Job Description: A Short Guide.”

So, what do financial analysts do? More on this in the next section.

What Do Financial Analysts Do?

I have a confession to make.

Sometimes, being a financial analyst can feel like a complicated task. There are many tasks to think about—and almost every time, your cup will be full to the brim.

It is because of the nature of the business environment. The responsibilities include:

1. Gather financial data and information

Financial analysts start their journey by researching the critical financial markets and conditions of the economy that inform their investment strategies.

  • In evaluating financial data, they identify and gather relevant financial data from financial and accounting reports, which they further break down to inform decisions.

2. Organize information

You must organize all the data, statistics, and information collected above.

Financial analysts use tools like Excel and other software that store the information before it’s analyzed or for future reference.

These tools help fund managers and analysts:

  • manage and make profitable financial investments,

  • organize large amounts of financial data, perform complex calculations and modeling,

  • see investment trends,

  • create visualizations and charts, and

  • generate reports other than financial analysis and investments.

3. Analyze financial results

It is the next process after data collection and organization, from financial reports to financial analysis and financial modeling.

Financial analysts break down a company’s financial statements and data, creating financial models that can predict the outcome of certain business decisions.

For example, a financial analyst at an insurance company may:

  • Analyze economic trends and claims data to see economic trends

  • Identify and rating analysts

  • Evaluate potential investment trend areas for cost savings

  • Evaluate investment opportunities to develop new insurance products that better meet customer needs.

4. Develop recommendations

Firms, hedge and mutual funds,, independent money managers, investment banking, financial analysts, hedge funds, and companies rely on recommendations made by financial analysts to inform their investment strategies and decisions.

5. Make presentations and generate reports

Pitchbooks, internal reports, and management presentations form this last part of the work done by a financial analyst.

  • They convert the data into accurate, easy-to-understand, and insightful presentations and reports to help their clients and company executives.

  • They plan future financial transactions with their sell-side analysts, call-side analysts, and buy side analysts, and investment analysts and plans.

As a financial analyst, you can not afford to make a mistake; it will translate to a big economic loss—that is not desired. That’s why staying updated with new technologies, market trends, and conditions for sustained efforts is important.

If you want to learn more about Financial Reporting Analyst, I’ve created a resource you can benefit from.

Now that we’ve figured out some of the key things a financial analyst does, it’s time to add some weight to some of the challenges of being a financial analyst today.

Salaries and Compensation- Financial Analysts 

According to Glassdoor, the average salary for a financial analyst in the United States is $ 87,101 per year.

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Source: Glassdoor

According to the U.S. Bureau of Labor Statistics, the mean hourly rate for a financial analyst stands at $52.30, which translates to a median annual wage of about $108,790 in mean yearly salaries.

Financial Analysts Salary -U.S. Bureau of Labor Statistics

Source: U.S. Bureau of Labor Statistics

According to the Salary Guide for Accounting and Finance Professionals, the salary for entry-level work environment financial analysts and financial risk analysts in New York is between $69,000 and $91,080.

In contrast, senior analysts, financial analysts, and entry level financial analysts can bag somewhere between $ 69,000 and $ 91,080.

Financial Analyst Salary New York 2023- Roberthalf

Source: Roberthalf

As is evident, the salary you can expect will depend on three things:

  • Your level of experience

  • Your position

  • The firm that you’re working in.

What Are the Career Prospects for Financial Analysts?

The demand and job outlook for financial analysts continue to grow in the U.S. There are more job openings and more firms, businesses, institutional investors, pension funds, financial services sales agents, and companies looking to hire financial analysts.

So that they can have research analysts help them make profitable investments and make informed investment decisions.

Are financial analysts in demand?

According to the U.S. Bureau of Labor Statistics, there are about 296100 financial analyst jobs, respectively, in the U.S. At the same time, projections indicate job market openings with a projected growth of 11% over the next 10 years.

As you plan for your career, it’s important to position yourself strategically, as discussed above, to be absorbed when opportunities arise.

Additionally, working hard and smart once you land your first job and aim to rise up the ladder with time is very important.

That’s the ultimate goal—so that you can enjoy the benefits and opportunities that come with titles and roles.

How to Become a Financial Analyst: Frequently Asked Questions

1. How long does it take to become a financial analyst?

A relevant bachelor’s degree is the minimum qualification to become a financial analyst. It means you immediately become one after completing your undergraduate studies. In some cases, if you need a license from FINRA, it may take some time to complete the exams before you’re fully certified.

2. Are financial and investment analysts’ roles the same?

No. At the entry-level hire financial analysts and investment analysts have similar responsibilities but focus differently. Financial analysts assess an organization’s financial health, while investment analysts focus on evaluating investment opportunities.

3. Can I become a financial analyst after B.Com?

To pursue a career as a financial analyst, you can pursue a bachelor’s degree in either BBA-Finance or B.Com. These undergraduate programs provide a solid foundation for a career in finance. They can be a stepping stone toward becoming a financial analyst.

4. Can a fresher like me (undergraduate) become a financial analyst?

If you are passionate about applying your strategic thinking abilities and providing guidance to company decision-makers, pursuing a career as a financial analyst is attainable even as a recent graduate. Entry-level opportunities are accessible in this field, allowing newcomers like you to start your journey in financial analysis.

My Exclusive Insights for You – Is a Financial Analyst Career Right for Me?

In conclusion, while a successful career as a financial analyst can offer numerous opportunities for growth and advancement, it’s essential to thoroughly assess your interests, skills, and goals to determine if they align with your career aspirations.

Is Finance a Good Career path for you? Seeking guidance from professionals in the field and conducting thorough research can aid in making an informed decision about pursuing a career as a financial analyst.

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