How to Become a Financial Analyst: Career Path and Job Description

Start your career path to becoming a certified financial analyst today. Learn about the steps, classes and educational options you will need to become a successful financial specialist. The team at University HQ strives to provide accurate and trustworthy rankings that highlight the best programs for finance.

What is a Financial Analyst?

A financial analyst is a professional who specializes in evaluating financial data, market trends, and business performance to help companies and individuals make informed decisions. They are experts at interpreting numbers, spotting patterns, and providing recommendations that drive smarter financial choices. Whether it’s advising on investments, assessing risks, or helping businesses manage their budgets, financial analysts play a critical role in shaping financial strategies.

In their day-to-day work, financial analysts may focus on a variety of tasks depending on their specialty. Some work on investment analysis, helping clients decide which stocks, bonds, or other assets are worth their time and money. Others might evaluate the financial health of businesses, ensuring they’re on the right path for growth and profitability. They often use tools like spreadsheets, data visualization software, and financial modeling to make their insights clear and actionable.

Beyond the technical skills, financial analysts also need strong communication abilities to explain their findings to people without a background in finance. Whether they’re crafting reports, presenting to executives, or advising clients, their goal is to turn complex data into simple, practical advice. In short, financial analysts are the behind-the-scenes experts who help make sense of the financial world, ensuring that businesses and individuals alike can achieve their goals.

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Steps to Take to Achieve This Career

The steps to becoming a financial analyst are clear and there are several avenues you can explore. The need for a formal education cannot be ignored, the market simply doesn’t allow it. However, there is latitude in the degree in which you receive your education. For example, you are not automatically tied to a degree in business to become a financial analyst. All industries need people who understand the business side as well as the industry itself to help them make financial planning decisions. If you can combine business acumen with in-depth understanding of your chosen industry, there is an financial analyst job out there for you.

Step 1: Earn Your Bachelor's Degree
Step 2: Gain Relevant Experience
Step 3: Develop Skills and Tools
Step 4: Pursue Certifications
Step 5: Continuing Learning and Networking

Step 1: Earn Your Bachelor's Degree

To start your journey as a financial analyst, earning a bachelor's degree in finance is essential. Programs in finance, economics, accounting, or business administration provide a strong foundation in key concepts like financial reporting, market analysis, and investment strategies. These fields equip you with the theoretical knowledge and analytical skills needed to understand complex financial data and make informed recommendations.

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Step 2: Gain Relevant Experience

Experience is crucial for building a successful career in financial analysis. Internships or entry-level roles in finance, such as a junior analyst or financial associate, offer hands-on exposure to analyzing data, creating reports, and working with financial tools. This practical experience not only enhances your technical skills but also helps you understand the dynamics of financial decision-making in real-world settings.

Step 3: Develop Skills and Tools

To excel as a financial analyst, you need a strong set of skills and familiarity with essential tools. Proficiency in software like Excel, financial modeling platforms, and data visualization tools is a must. Equally important are soft skills, such as critical thinking, problem-solving, and effective communication, which enable you to analyze data thoroughly and present insights clearly to stakeholders.

Step 4: Pursue Certifications

Certifications like the Chartered Financial Analyst (CFA) or Financial Risk Manager (FRM) can significantly enhance your qualifications. These credentials demonstrate expertise in areas like investment analysis, portfolio management, and risk assessment. While earning these certifications requires passing rigorous exams and gaining professional experience, they can open doors to higher-level positions and boost your credibility in the field.

Attain an MBA
This step isn’t required to attain an entry-level financial position, but those who have MBAs are almost always offered senior analyst positions instead of entry-level ones. Plus, the graduate degree makes you even more attractive if your undergraduate is from a less prestigious school or you majored in something other than business. You look more well-rounded with a larger worldview.
SIE
If you opted to not get your MBA, you can take the Security Industry Essentials exam. It is offered by the Financial Industry Regulatory Authority (FINRA). This exam tests your knowledge of financial rules and regulations handed down by the SEC and other regulatory agencies. Once you’ve passed the SIE and are working for an organization, you can prepare and take the Series 7 exam, which many organizations require their management team to take and pass.

Step 5: Continuing Learning and Networking

Networking and lifelong learning are key to advancing as a financial analyst. Joining professional organizations, attending industry events, and leveraging platforms like LinkedIn can connect you with mentors and job opportunities. Staying updated on market trends and industry developments ensures you remain competitive, and pursuing advanced degrees like an MBA can prepare you for senior or specialized roles in the finance industry.

What Does a Financial Analyst Do?

Financial analysts do exactly what their title implies, as well as other duties. A financial analyst looks at possible financial planning transactions and determines the best possible outcomes, the worst case scenarios, and the best course of action. If the transaction is deemed a good risk, the analyst will put together a detailed research report for managers to follow so they can achieve the best financial outcome while avoiding as much of the risk as possible. If the transaction is deemed too risky, the analyst will create a report detailing the specific risks and why the transaction might not be worth it.

Along with analyzing possible transactions, financial analysts work with clients and help them build financial portfolios that meet their investment needs. Some financial analysts teach other analyst or students of finance. On any given day a financial analyst might meet with a small customer, interact with other analysts or staff members, and present findings to the CEO of a company. At any point during the day, the financial analyst could be called upon to provide guidance on a variety of issues or financial matters, from understand financial reports to the risk of a certain stock.

Skills to Acquire

As a financial analyst, there are obvious skills you need, but also some other skills you might not have considered. Financial analysts are a blend of scientist, investigator, manager, and customer service representative. It’s not a job that allows you to sit in a corner cubicle and crunch data alone for eight hours.

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Communication skills. Most likely, you will present your findings to at least the management team, if not the entire board. Depending on the type of financial analyzing you do, you could also be required to meet with clients or members of the media. So, clear and well-honed communication skills are a must.
Interpersonal skills. To get the data you need to accurately complete financial analysis requires interacting with other in-house employees who have that data.
Analytical skills. This is a given, but the ability to look at data, calculate it, and decipher what it all means is required.
Financial statement compilation and explanation. Businesses are looking for people who can read and explain financial statements in laymen’s terms. Knowing how to compile, decipher, and explain these reports is a valuable skill.
Computer skills. Knowing how to use various types of software such as Excel and being familiar with SAP and Oracle are useful traits.
Problem-solving. Once you analyze financial data and know what it means, creating a solution or providing guidance will make you stand out from other financial analysts.

Financial Analyst Career & Salary

Where Might You Work?

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Many financial analysts have the goal of working on Wall St. If this appeals to you, then you have a couple of avenues to pursue:

Sell-side firms
Financial analysts at this type of company help the organization determine which financial holdings (stocks, bonds, notes, etc.) should be kept, sold, or purchased. Also, whether those holdings should be increased or decreased in number.
Buy-side firms
Financial analysts for investment houses that manage their own funds help the organization determine which stocks make the best investment based on a set of pre-determined parameters.
Investment Banks
A financial analyst for investment banking will help the bank decide which IPOs, mergers, and acquisitions are best for the bank. As some mergers and acquisitions could be met with pushback, a bank wants to know if it’s worth the hassle.

A financial analyst can also embark on a satisfying career away from Wall St. A few options include:

Local and regional banks
They have the same needs as the big banks, just on a smaller, more local scale.
Insurance companies
Real estate investment firms
Data-driven companies
Basically, any company that makes major decisions about how to spend or invest money needs a financial analyst to tell them where to spend the money and how much to invest.

Potential Career Paths

The career path for a financial analyst is vertical, but there are offshoots as well. Basically, a financial analyst starts off in an entry-level analyst position and works his way up through management. But on the way, the analyst can pick up additional career options and interesting financial-based positions in a variety of fields.

Junior financial analyst
These financial analysts are usually fresh out of college and working on an advanced degree, such as an MBA. This is an entry-level analyst position that works on smaller, less risky accounts and reports directly to a senior financial analyst.
Senior Financial Analyst
This analyst has attained an MBA and Series 7 certification. They work on major accounts and manage junior financial analysts and report to either the Financial Manager or Chief Financial Officer, depending on the structure of the business.
Financial Manager
They will manage junior analysts and senior financial analysts and report directly to the CFO. They review suggestions and forecasts of the financial analysts and add additional input and advice for presentation to senior management.
Finance Instructor
Necessary to teach finance classes on the college level to help train new financial analysts.
Analyst training
Corporate level training for junior analyst can be done by senior financial analysts or financial manager.
Corporate spokesperson
Some companies let their financial analysts represent the organization to the public in interviews with the media.

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Salaries

Occupation	Entry-Level	Mid-Career	Late-Career
Financial Analyst	$55,000	$69,000	$75,000
Fund Manager	$86,000	$96,000	$102,000
Funding Analyst	$32,000	$68,000	$49,000
Portfolio Analyst	$56,000	$74,000	$79,000
Portfolio Manager	$60,000	$88,000	$117,000
Risk Analyst	$59,000	$75,000	$77,000
Risk Manager	$64,000	$91,000	$99,000

**Salary info provided by PayScale

Career Outlook

According to the US Bureau of Labor Statistics, the need for financial analysts is going to increase 9% between the years of 2023 to 2033. Reasons for the increase in demand will be an increase in financial institutions wanting financial analysts on staff and the retirement of older financial analysts. Geographically, most of the demand will take place on the east and west coasts, as well as the larger states, such as Texas. There is also a demand for financial analysts in Ohio and Illinois. Both states have large financial districts and a number of corporate headquarters.

From an income outlook, smaller markets are paying better. In New York, the median income for a financial or investment analyst is $143,330. However, in some states, their income lowers to around $90,000. States that are offering higher salaries include New York, Montana, New Jersey, Massachusetts, and California.

Advancing From Here

A financial analyst can start in an entry-level position and rise to the top as the CEO. This can occur in any industry, from working in the financial district to engineering or real estate. You’ll want to stay abreast of all the regulations that exist in your industry so continuing education and refresher courses are a good idea. If you’re savvy and know how to analyze financial data and help organizations make solid business decisions that lead to profits, there will be room for you to advance.

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Frequently Asked Questions

What do these specialists do?

The main job of a financial analyst is to make financial recommendations based on research. A financial analyst will collect and evaluate data to make suggestions of how a client should invest their money. Financial analysts gather data, develop recommendations, generate reports, build excel models, make forecasts, analyze results, organize information, and make presentations.

What is the job like?

The job of a financial analyst requires a significant amount of research and information gathering on and off the job. Another aspect of the job may include travel. Financial analysists may be required to visit companies and attend conferences.

What are typical credentials for these analysts?

Most financial analyst jobs require a bachelor's degree or a master's degree in a related field. After you complete your education, you will also be required to take and pass the series 7 exam.

What skills should you have in this field?

A financial analyst should have analytical skills, mathematical skills, leadership skills, research skills, attention to detail, research skills, ease with technology, and communication and writing skills.

What types of companies hire these analysts?

Insurance companies, law firms, banks, and other large companies all hire financial analysts.

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Becoming a Financial Analyst Careers & Salary Outlook