Becoming a Financial Analyst
Financial analysts are also known as securities analysts or investment analysts. They provide economic evaluation and fiscal guidance to organizations to assist them and their clients in making sound investment decisions. Financial analysts typically work for a business such as a banking institution or an insurance company.
Education, Training & Degrees for Financial Analysts
A bachelor's degree is most often the minimum requirement one must possess to be considered for a corporate financial analyst position. The latitude for the field of the degree is wide, however. It can be in finance, commerce, accounting, business administration, economics, statistics, or another related field. An MBA (Master of Business Administration) is often preferred, although it is not always required.
Job Responsibilities and Desired Skills for Financial Analysts
The primary function of the financial analyst is typically to research, analyze and assess the economic performance, value and future earnings potential of companies and industries so that financial institutions can make wise investment decisions. Most often the financial analyst will specialize in a specific industry, keeping abreast of industry trends, products, value, and competition, and then informing financial institutions of the potential risks and returns of specific investments within that industry.
Generally, the functions performed by a financial analyst include gathering financial information, analyzing and interpreting that information, drawing forecasts based on these analyses, and making recommendations concerning investments. Another area in which the financial analyst can serve an important role is in evaluating the economic performance of an organization and suggesting ways to improve this performance.
The successful financial analyst will possess a thorough understanding of such basic economic topics as corporate finance, balance sheets, income statements, cash flow, capital budgeting, profit and loss, the time value of money, and mergers and acquisitions. An understanding of capital markets is a valuable bonus. Sound financial judgment and good communications skills are critical, as is knowledge of computers and appropriate software applications.
Financial Analyst Salary Range and Employment Outlook
The U. S. Department of Labor reports that employment prospects for financial analysts should be very good well into the next decade. The Labor Department projects a nearly ten percent growth in job opportunities in this field, which amounts to an additional 63,000 job positions becoming available through 2014. The majority of these opportunities will be in the banking industry, which employs the greatest number of financial analysts and managers.
Figures released by the U.S. Bureau of Labor Statistics indicate that the median annual salary for financial analysts was approximately $62,000 in 2004, with a range running from less than $37,000 to a high of over $113,500. Performance-based bonuses, which are common in this field, have the potential to significantly increase these salaries.
