How to Become a Financial Analyst

| Staff Modified on June 8, 2022

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Financial analysts work closely with organizations and businesses to offer their expertise on how to invest assets. They pour over numbers and create detailed spreadsheets to provide the best financial advice to their company. Now is a terrific time to consider a career as a financial analyst, as the Bureau of Labor Statistics projects jobs in this field to grow 6% percent through 2028.

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This guide outlines what it takes to become a financial analyst, including the skills you'll develop, the education requirements, and other helpful resources.

What Skills Do You Need to Become a Financial Analyst?

The most successful financial analysts demonstrate the skills listed below. While some of these may come more naturally than others, the full range can be developed through a combination of education and on-the-job experience.

Interpersonal communication skills

A large part of a financial analyst's job includes communicating with clients. Companies and investors need to feel that they can trust these professionals to give them good advice on where to place their money. Financial analysts must communicate clearly and openly about the various risks associated with investments.

Analytical skills

These professionals must possess strong analytical skills. Financial analysts must be able to weigh risks and potential benefits for investments, and know how to properly analyze changes in the stock market. Without strong analytical skills, financial analysts can't offer sound investment advice.

Financial reporting skills

Understanding how to conduct and decipher financial reports can help financial analysts determine the financial health of a company. Knowing more about financial reports can also help a financial analyst determine whether a company can afford to make an investment, as well as the best stocks in which to make an investment.

Superforecasting skills

Superforecasting is the ability to make predictions grounded in research -- which is dramatically different than simply guessing. Financial analysts must be able to make predictions about the stock market and look for indicators that could reveal a company's probable financial future. While superforecasting does not mean accurately predicting outcomes 100% of the time, it does mean demonstrating a high success rate.

How Long Does It Take to Become a Financial Analyst?

When preparing to become a financial analyst, make sure to map out your career plan. Doing so will give you direction as well as detailed goals to meet. Below is an outline of the common steps it takes to earn a job and succeed as a financial analyst. Keep in mind that everyone's career path varies from another, so you can't expect your steps to look identical to this list, or even a peer's list. Allow yourself the flexibility to change plans when necessary; however, you can expect to take steps similar to the ones below:

  1. Acquire a bachelor's degree Before landing a job in the field, it is important to earn a bachelor's degree in a related field, like accounting, statistics, or economics. During your studies, consider whether or not you enjoy what you're learning. The beginning of college is the best time to reevaluate your career choice and change paths. You can expect to spend four years completing a bachelor's degree.
  2. Complete an internship Participating in an internship can help you learn from experienced financial analysts. This experience can also provide further confirmation that you've chosen the right career path, or it can signal that it is time to switch careers. Participating in an internship can also help you form relationships with a potential employer and cultivate positive references. Internships usually last around one semester.
  3. Acquire a master's degree Not every employer or client will expect you to have a master's degree in a finance-related field; however, an advanced degree certainly helps and can open doors to work with higher-paying clients. Earning a master's degree can help you make valuable connections with both your peers and your professors. You can earn your master's degree either before earning a job, or once you've established yourself in a position. Luckily, many schools provide online financial analyst master degree programs that you can complete while still maintaining your full-time job. Master's degrees can take 2-3 years to complete.
  4. Obtain a job After completing your studies and earning your diploma, start looking for a job. A person's first job is rarely their dream job, so don't feel discouraged if you cannot immediately find a position that feels like a perfect fit. After you secure a license and gather enough job experience, you could be well on your way to owning your own firm and working with big-name clients. The job search can take just a few days or a few months.
  5. Get a license Although it may come as a surprise, you don't necessarily need to earn licensure before you earn a job. In fact, not every employer requires a financial analyst license. If it is a requirement for your job, many employers will pay for your licensure. It can take several months of studying before you're ready to take the licensing exams.

What Education Do You Need to Become a Financial Analyst?

Getting an education is one of the most important steps towards becoming a financial analyst; however, no degree or education guarantees a job in this competitive field. To stay relevant and outshine other candidates, you should supplement your education with internships and develop an impressive portfolio.

While earning a bachelor's degree can certainly qualify you for most entry-level jobs, earning a master's degree can demonstrate your dedication and expertise.

Most organizations who hire financial analysts require a candidate to have a bachelor's in a finance-related field, such as economics, accounting, or business. While earning a bachelor's degree can certainly qualify you for most entry-level jobs, earning a master's degree can demonstrate your dedication and expertise.

During your studies, you can expect to learn the principles of macroeconomics and microeconomics. Both these fields involve examining the reasonings behind financial decisions. Microeconomics examines small-scale decisions made by individuals and businesses. On the other end, macroeconomics analyzes the financial choices made by countries and governments.

Understanding the relationship between business and politics empowers financial analysts to offer the best advice on making wise business investments.

Students can also expect to take courses in politics and public policy. The choices elected officials make can greatly impact the economy's health and the stock market. Understanding the relationship between business and politics empowers financial analysts to offer the best advice on making wise business investments.

Aside from earning a bachelor's degree, most employers and clients do not require additional qualifications for an entry-level position; however, you may find it helpful to work in a related field like accounting before feeling confident enough to offer investment advice that could make or break a company.

Some employers may require an additional license, but many will pay for these licenses once you gain employment at their firm.

Financial Analyst Career Development and Credentials

To be successful in this field, financial analysts must commit to lifelong learning. The landscape of politics and economics change rapidly, and professionals must stay informed in order to offer the best advice to their clients. Earning additional certifications and licenses can help you learn more about a specific branch of financial advising, which can allow you to charge even more for your expertise.

Certifications and Continuing Education Earning financial certifications can help you succeed in this competitive career field and provide a source of continuing education. Keep in mind that your future employer may require specific certifications, but the company usually sponsors the certification cost. Overall, earning a financial certification will enhance your resume and make you a more desirable job candidate. Overall, earning a financial certification will enhance your resume and make you a more desirable job candidate. You can earn a certification in business-related areas such as financial planning, charter financial analysis, chartered investment counseling, financial risk managing, and chartered life underwriting. The certification you earn will depend on your career path, so waiting to earn certifications until after you land your first job may be a wise decision. Some certifications require you to work at a specific type of firm for several years. For example, if you work at a firm that specializes in investments, you should earn the investment counseling certification. This certification requires you to acquire at least five years of experience at a firm that is a member of the Investment Adviser Association.
Credentials and Licensing Even though earning some certifications can take many years, you can still get a jumpstart on broadening your knowledge by earning other credentials and licensing. For example, pursuing a CPA license can show future employers and clients that you know how taxes impact a business. Joining professional organizations is another great way to earn more credentials. Many of these organizations offer continuing education opportunities like webinars and conferences, and you can make valuable connections with other members. You can also pursue a spot on the leadership board of your local chapter if you want to add another credential to your resume.

Learn More about Financial Analysis and Take the Next Step Today

Career and Professional Resources

  • American Finance Association This organization educates those who work in financial economics. Professionals in this field likely know AFA by its noteworthy publication, the Journal of Finance. You can also choose to submit a paper to this journal, which can provide another credential for your resume.
  • Investment Adviser Association The IAA advocates for the financial advisor profession by lobbying and providing educational opportunities. The organization hosts an annual leadership conference and its network includes 650 firms.
  • Securities Industry and Financial Markets Association SIFMA is an advocate for resilient capital markets. This organization acts as a forum for industry policy and provides professional development opportunities. Members can attend conferences and other events and gain access to a resource library.
  • Entrepreneurs' Organization Many financial analysts open their own firms later on in their careers. If you follow this path, this organization can connect you to other entrepreneurs and help you grow your business. The EO also has a valuable mentorship program.
  • The Professional Accounting Society of America Accounting and financial advising go hand-in-hand. Joining the PASA can connect you with other accountants, while members benefit from access to exclusive online articles and member-only discounts.

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