If you’re interested in becoming a financial analyst, you should know from the beginning that you have a difficult and long road ahead of you, but you might discover on the way that this is one of the best decisions you’ve ever made in your life after you know that what does a financial analyst do.
Given the fact that you put in the necessary studying, efforts and working hours, what awaits you is a long and flourishing career, job security, very good wages, peer respect, interesting projects and the possibility of doing business with interesting people and companies, from which you will learn very much.
However, there are many things you need to know before you get started on this path, which is why this article is here to answer all your preliminary questions, such as what diploma you actually need, how much does a financial analyst make, what are the job opportunities out there and why is the market shifting as some analysts put it?
Now that we’ve established the basis of the financial analysis game, a financial analyst’s job description and tasks should be much easier to understand.
So, a financial analyst is the actual person who takes a look at a company’s or client’s financial statements, accounts or capitals, pulls out financial reports using that financial data, presents them to the company’s management and helps them make viable decisions for the company’s future.
However, breaking down these responsibilities lets us know there are three types of financial analysts.
This leads to one major difference between the two types of analysts: Buy-side and sell-side analysts. Because you are not directly employed by the company that requires the analysis, you also need to make marketing a part of your job.
This basically means you need to know how to sell yourself and your services so that companies like insurance companies pick you out of thousands of others and come back to you after you’re done.
These are the three types of financial analysts.
One thing that is very important for you to remember regarding this is that you don’t need to decide right off the bat what type you would like to be.
Independently of that, when you first get hired as a financial analyst, you will start as a junior which means that your main attributes will be to gather data, work on the financial models, keep-up with the news and changes, update the files and the spreadsheets and attend meetings with senior analysts so that you can learn.
Therefore, whatever of the three you choose, at first, you will be doing exactly the same job.
This is a good thing because it will allow you to see the underbelly of the business and make an informed decision regarding what your next steps will be.
Normally, most companies require a bachelor’s degree in a financial related field, because you need to know the basics.
But you can also reach for this career of you have a master’s degree either in finance or in business administration and you then take some data analysis courses on the side.
One thing you need to know here is that you must get your certification as a financial analyst; otherwise, you will not get hired.
But the good thing is that many companies nowadays have become far less strict upon hiring and do not require a person to have the certification beforehand, as long as he or she has the proper studies.
Companies are actually glad to put you through training and classes and to pay for them.
Getting the certification will definitely get you ahead in the business. You can also take some advanced courses related to your specialty so that you can focus solely on that and become the best in the branch.
And, if you are truly ambitious, you can take some management courses as well and go on to become fund managers, usually a position held in high regard by financial analysts and one reserved only for the best.
Courses can most easily be taken online. All you have to do is to visit some sites like Breaking Into Wall Street to help you decide what you want or need to study and where exactly you can do that.
As a financial analyst, you need a very strong and specific set of skills, so that you can perform the required analysis of the information regarding investment plans for your client-companies. Here they are:
The internet is your best friend once again when trying to find a job as a financial analyst.
All the jobs are posted online, of course, but there are two ways of finding an opening. They depend on whether you have gone to a field-related college or not.
If you have and you have decided since the beginning that this is the career path for you, then the seniors in the field suggest you should never wait until you graduate to start finding jobs and companies.
While still in college, prospect the market, talk to your colleagues, professors, and older students and get to know the market. This is called networking and the sooner you start doing it, the better.
It does not mean that you need to start working straight away, but rather to make yourself known, understand how the business works, learn which are the best and worst companies to work for, what does their client portfolio looks like, what is the office atmosphere and so on.
Also, this is a very good time for you to put yourself out there and make yourself remembered.
Later on, after you graduate, get your certificate and go to an interview, they will remember you and half the battle is already won.
The second way of finding a job refers to those people who didn’t go to a field-related college, are older and are just now starting on the financial analysis road.
For those of you out there, learning as much as possible is the key.
Find companies and job openings online and go to the interviews with as much knowledge as possible in your back pocket.
This is your ticket for convincing companies that, even if you didn’t study finance, this is what you want and were meant to do.
As far as finding jobs go, look for online job market tools, such as indeed.com, which allows you to find a financial analysis job in your city or area.
You might think that an interview for a financial analyst position is your typical job interview and you would be right to some extent.
Only that there are some tips and tricks you need to know so that you can home in on your success as much as possible.
First of all, most companies still like to subject all their candidates to a test.
It’s usually a 30 minutes written quiz with questions regarding technicalities of the business.
This is good news for the people who haven’t graduated from field-related colleges because here is where they can prove they are just as qualified as or even more so than those who have a finance degree under their belt.
Second of all, there’s the usual interview advice one gets before participating. Only that, in this case, they really do matter. You will hear advice such as be yourself, be strong, confident, professional and likable.
Yes, be all those things and more.
What you need to understand from the beginning and not take lightly is the fact that this is a very serious position and one that requires a lot of responsibility on your part and much confidence from your employer.
You will be dealing with companies and their finances – budgets, assets, worker’s salaries, bonds, stocks, and investments.
Basically, you will be telling companies what to do with their money. And this is why your employer needs to see you as a very serious and reliable person.
Thirdly, you need to check out what kind of profile the company you’re applying to, has. In recent years, there has been a shift in the market. Some financial companies are becoming a lot more relaxed when it comes to their employees and understand that coming to work in jeans or a suit doesn’t decide how good of a financial analyst you are.
This is why they are taking the friendly and casual approach towards both their clients and their employees. So, if your company’s profile is like that, wear something smart casual, act friendly, smile a lot and be relaxed.
However, keep in mind that most companies still work in the traditional way, which means suit and tie are obligatory.
Here is the story of a recent graduate who managed to get a job at a Silicon Valley company as a financial analyst, telling all about her interviewing experiences.
According to the US Bureau of Labor Statistics :
It’s also good to know that the best areas as far as salaries go are New York City, of course, Bridgeport, Connecticut, and San Francisco. But you can also try in California, especially San Jose and Colorado Springs in Colorado.
Compared to other best jobs, the financial analyst comes third as far as salaries go and the financial advisor comes in fourth, after marketing manager, the highest paying job at the moment and the sales manager, the second-highest paying job.
But being in the top 5 best-paying jobs in the world does indeed count for something and it can serve you as a great incentive to pursue this career.
I am sure after reading this guide, you are now sure of what does a financial analyst do. If you have any comments or questions, please comment below.