What you need to know
Financial analysts provide guidance to businesses and individuals making investment decisions. They assess the performance of stocks, bonds, and other types of investments.
Financial analysts work primarily in offices but travel frequently to visit companies or clients. Many financial analysts work at large financial institutions based in New York City or other major financial centers.
Some of the things an financial analyst might do:
- Recommend individual investments and collections of investments, which are known as portfolios
- Evaluate current and historical financial data
- Study economic and business trends
- Examine a company’s financial statements to determine its value
- Meet with company officials to gain better insight into the company’s prospects
- Assess the strength of the management team
- Prepare written reports
- Analytical skills: Financial analysts must process a range of information in finding profitable investments.
- Communication skills: Financial analysts must explain their recommendations to clients in clear language that clients can easily understand.
- Computer skills: Financial analysts must be adept at using software packages to analyze financial data, see trends, create portfolios, and make forecasts.
- Decision-making skills: Financial analysts must provide a recommendation to buy, hold, or sell a security.
- Detail oriented: Financial analysts must pay attention to details when reviewing possible investments, as small issues may have large implications for the health of an investment.
- Math skills: Financial analysts use mathematical skills when estimating the value of financial securities.
The average pay for financial analysts in the United States ranges from $48,760 to $159,560 as of May 2020.
The specific pay depends on factors such as level of experience, education and training, geographic location, and specific industry.
Employment of financial analysts is projected to grow 5 percent from 2019 to 2029, faster than the average for all occupations.
A growing range of financial products and the need for in-depth knowledge of geographic regions are expected to lead to strong employment growth.
Demand is also projected to increase as the growth of “big data” and technological improvements allow financial analysts to access a wide range of data and conduct high-quality analysis.
Most positions require a bachelor’s degree. A number of fields of study provide appropriate preparation, including accounting, economics, finance, statistics, and mathematics.
The Financial Industry Regulatory Authority (FINRA) is the main licensing organization for the securities industry. A license is generally required to sell financial products, which may apply to some financial analyst positions. Because most of the licenses require sponsorship by an employer, companies do not expect individuals to have these licenses before starting a job.