Use your talent for numbers as a financial analyst
Financial analysts can wear many hats. Some pursue highly specialized niche areas of expertise, other financial analysts use their training and skills to help businesses achieve their monetary goals.
If you're just getting started as a financial analysis, you might look for jobs in banking so you can advise investors about the best vehicles for their cash. Your financial analyst job description varies significantly based on your position at work and the company you choose for employment. Despite the differences all financial analysts work with numbers and help people solve financial problems.
What Can a Financial Analyst Do?
As mentioned above, financial analysts can take widely different paths in their careers. Understanding your options will help you choose a path that makes excellent use of your skills and fulfills your desire for purpose and meaning in your professional life.
Some financial analysts study investment instruments, such as stocks and bonds, and make recommendations to their employers for buying and selling. This is the quintessential Wall Street career that involves large sums of money and fast-paced decision-making. Some financial analysts work on a commission-type pay structure, which means their salary depends on their performance.
In this capacity, financial analysts can work for banks, investment groups, insurance agencies, and other entities. They often specialize in either macroeconomic or microeconomic conditions and decisions.
Morrison, a financial analyst and divorce mediator, uses his finance background to help divorcing couples make practical decisions about their money. He mediates disputes over spousal maintenance, child support, asset division, and other factors that arise when two people decide they no longer want to live together.
When asked about the nature of his work, Morrison says, "I serve as a mediator for divorcing couples and families in conflict. I also provide financial analysis services to divorcing couples and individuals." Since he works for himself, he sets his own hours and must devote part of his workday to marketing and administrative tasks.
Yu, a senior financial analyst with two years under his belt, says his job description requires him to "[analyze] and interpret financial data." He goes on to say that his superiors rely on him to "[m]ake recommendations to management based on [his] findings."
In a corporate position, a financial analyst might review the company budget, find ways to cut costs on expenses like overhead and merchandise, and devise new spending solutions. According to Yu, the best part of his job is the opportunity to "[provide] meaningful solutions to management."
How Do You Move Up as a Financial Analyst
If you want to learn how to become a financial analyst, start with your education. You'll need a minimum of a bachelor's degree in a finance-related discipline, such as economics, accounting, statistics, financial analysis, or business administration. However, the Bureau of Labor Statistics (BLS) reports that many employers prefer to hire analysts with master's degrees.
If you're already in the field, you're ahead of the game. Financial analysis constitutes a high-level position, so you'll need experience in the industry if you want access to the best jobs. Consider working as a CPA, financial advisor, or other professional in the field while you complete your master's level coursework. Then, with degree in hand, you can move up the ladder.
You'll also want to take and pass any exams that might further your career prospects. Yu, for instance, took the CPA exam to gain his credentials. Other financial analysts take financial securities license exams, such as Series 7, Series 63, or Series 69. Still more become certified financial analysts, or CFAs.
How Much Can You Earn as a Financial Analyst?
If you're interested in furthering your career as a financial analyst, you likely want to know about your earning potential. Financial analysts earn an average annual salary of $82,000 across the United States. Salary potential increases in certain cities, such as San Francisco and New York, because they're known for having strong financial districts. After you gain a few years of experience and prove your skill, your salary could easily exceed $85,000 per year.
Additionally, the BLS projects a 12 percent growth rate for financial analysis jobs through 2024. This career will expand faster than average, which means excellent job opportunities and potential job security.
Are There Any Drawbacks to This career?
According to Morrison, he doesn't dislike a single aspect of his job. He says, "I love that I work directly with people, helping them resolve serious matters of great importance to them." He does, however, admit that he faces challenges; specifically, he sometimes experiences discomfort when "[w]orking with high conflict couples," and since he works for himself, he doesn't always relish the marketing parts of his job.
Yu, meanwhile, finds "[a]d hoc reporting and unexpected issues prior to [his] due date[s]" a little frustrating. On the other hand, he admits that these challenges come with a healthy paycheck, which balances out the speed bumps he encounters.
How Can You Improve Your Chances as a Financial Analyst?
If you're thinking about striking out on your own as a financial analyst, divorce mediator, or similar professional, Morrison cautions that you "must market your practice regularly, and you need to enjoy doing so." According to Yu, it's easier to find success if you're open to profitable relationships. He says, "Find a mentor who has been in the industry for several years. Be open to feedback and development points. Don't be afraid to ask for help."
A career as a financial analyst offers great pay and exciting benefits. If you're ready to take the plunge, start searching for your next job immediately.