How to Become a Financial Analyst

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Updated November 10, 2022

Many paths can lead to a financial analyst career. Explore the steps that can take you into the field and beyond, including education, experience, and certification.

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Financial analysts help individuals and organizations spend and invest money effectively. They study markets and financial data to find the best opportunities and recommendations for their clients and employers. With the ability to expand profits and minimize risk, financial analysts play a very important role in the financial industry.

Interested candidates can pursue employment as financial analysts through multiple paths. This guide explores available options, including experience, credentials, and what degree you need to become a financial analyst.

Steps to Becoming a Financial Analyst

  1. Earn a bachelor's degree: Most employers require a bachelor's degree for financial analyst positions. These four-year programs teach students business finance principles and fundamentals. Degree-seekers may also learn investment and portfolio management.
  2. Complete an internship: Internships allow students to receive practical training and see firsthand how financial analysts work. Interns can also build professional networks to connect with future employers and references.
  3. Get an entry-level position: Individuals can pursue entry-level finance jobs, which allow workers to familiarize themselves with finance processes, tools, and systems.

Advanced Career Path

  1. Earn a bachelor's degree.
  2. Complete an internship.
  3. Get an entry-level position.
  4. Become a chartered financial analyst: Financial analysts do not need CFA certification to work in the field, but these credentials can improve their employment chances and earning potential. The CFA requires a combined 4,000 hours of education and experience.
  5. Obtain a securities license: A securities license permits financial professionals to sell securities to investors. Financial analysts do not require licensure, but it can add to their professional capabilities and make them more marketable.
  6. Continue your education: As they develop experience and expand their credentials, financial analysts might also advance their education. Continuing education courses, certificate programs, and full degrees like a master's in finance all fulfill this step.

Requiered Financial Analyst Education

Financial analysts can have various educational backgrounds, but most employers seek candidates with bachelor's degrees. Handling large investment portfolios may require a master's degree or significant experience. With more responsibility usually comes increased pay.

Several educational disciplines can prepare graduates for financial analyst careers, including accounting, finance, and business. While a specialization in financial analysis provides the most targeted education, any relevant bachelor's program with courses in portfolio management, risk management, and analysis should be helpful.

Master's programs feature more relevant specialization options, including financial management and securities. A master's in finance and an MBA can both lead graduates directly onto the financial analyst career path. Master's graduates may also qualify for the larger portfolio management positions and the higher salaries that come with them.

Required Licensing and Certifications for Financial Analysts

The financial analyst career path does not feature mandatory certifications across the board, but certain positions may require additional credentials. For example, a professional who sells investments needs a securities license. Licensure requires candidates to pass the appropriate examinations from the Financial Industry Regulatory Authority (FINRA).

Employers may also prefer candidates with a professional certification, such as the chartered financial analyst (CFA) credential from the Certified Financial Analyst Institute. Some companies may require financial planner (CFP) certification with the Certified Financial Planner Board of Standards.

Optional Certifications and Degrees

An individual typically needs a degree to get into the field, but certifications can fast-track their journey along the financial analyst career path. With specialized credentials like the CFA or CFP, financial analysts demonstrate their knowledge of investment and financial management practices.

The CFA and CFP certifications require candidates to possess a combination of education and professional experience. The CFA requires 4,000 hours of education and professional experience accumulated over three years. The CFP requires a bachelor's degree and at least 2,000 hours of professional experience.

Once qualified, candidates need to complete the required examinations. To maintain their certification, CFA charterholders should complete 20 continuing education credits each year. CFPs need to complete 30 hours of continuing education every two years.

Required Experience for a Financial Analyst

The financial analyst career path typically begins with an entry-level finance-related position. New graduates may start in business finance or accounting roles, performing tasks like recording financial data, tracking financial transactions, or performing market research. More advanced experience includes financial modeling and forecasts, identifying variances, and creating reports.

Experience can also come via college internships, practical training opportunities, and mentorship programs. Most employers prefer to hire candidates with at least some familiarity with the field. Since a securities license requires association with a FINRA firm, many employers do not require licensure for entry-level positions.

Should I Become a Financial Analyst?

Financial analysts occupy a rewarding space as their work can provide immense value to individuals and organizations. As a result of the growth in analytical technology and investment opportunities around the world, the profession should continue to expand. The broad applicability of financial analysis also offers professionals added freedom and flexibility to switch and advance their careers.

The Bureau of Labor Statistics (BLS) projects a 9% growth rate for the occupation from 2021-2031, almost doubling the national average for all jobs. The field's median annual salary also exceeds the median annual salary for all occupations by more than $45,000.

However, since they deal with finances, financial analysts may face considerable pressure. They need precision and confidence when advising clients, as it can sway their decisions and greatly affect their financial health.

Searching for Financial Analyst Jobs

Aspiring financial analysts can use many job search resources. While in school, college career services departments help connect students with internships, mentors, and employers. Most schools also host job boards and career fairs.

Job-seekers can also join industry organizations to access job boards, conferences, and professional networks. The following job boards feature specialized posts for financial analyst positions.

Career Growth Opportunities

Financial analysts possess valuable skills that apply to many finance fields, including financial planner and budget analyst positions. This flexibility can allow for movement between careers without having to learn new skills or complete additional degrees. They may, however, need to pursue continuing education to qualify for some positions.

To move up the financial analyst career path, financial analysts typically need to possess experience and complete continuing education opportunities. Many financial manager careers, for example, require a candidate to hold a master's degree in finance and leadership experience. Financial analysts can acquire this experience by moving from junior-level positions into portfolio and fund management roles.

Financial managers oversee the financial activities and operations within organizations, such as supervising finance employees, analyzing financial opportunities, and providing input on organizational decisions. According to the BLS, financial managers earned a median annual wage of $131,710 in May 2021.

Questions About the Financial Analyst Career Path

What do you need to study to be a financial analyst?

You can study accounting, business, or finance to become a financial analyst. Relevant courses will cover financial statement analysis, portfolio management, and investment analysis.

How long does it take to become a financial analyst?

The time it takes to become a financial analyst can differ, but each candidate needs a four-year bachelor's degree to enter the field.

Do you need a CFA to be a financial analyst?

No. Financial analysts do not need the CFA credential to work in the field, but employers may prefer individuals with certification. Candidates with a relevant degree alone can qualify for entry-level positions.

Can I be a financial analyst without a degree?

While there are no mandatory degree requirements to become a financial analyst, many employers seek candidates with bachelor's degrees.

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