What Is a Financial Analyst?
Financial analysts work with financial investments. They are hired by individuals and businesses who need help making investment decisions about stocks, bonds, and other types of investments. They often analyze the financial situation of a business or individual prior to making recommendations about investment opportunities. These job duties typically require extensive knowledge of business and economic trends, including industry and geographical trends.
Financial Analyst Specializations
Some financial analysts specialize in a particular area. Some of the most common specialists include:
- Budget Analysts
- Credit Analysts
- Investment Analysts
- Mergers and Acquisitions Analysts
- Money Market Analysts
- Ratings Analysts
- Risk Analysts
- Security Analysts
- Tax Analysts
- Wall Street Analysts
With enough experience, financial analysts may become portfolio or fund managers. Portfolio managers oversee all of the investments for a company’s portfolio. Fund managers, on the other hand, usually manage large investment portfolios for individuals.
Minimum Education Requirements for Financial Analysts
A degree is a necessity for individuals who want to work as a professional financial analyst. A bachelor’s degree is typically the minimum requirement. Although a general business degree may suffice, a degree in finance or a related area is often preferred. Individuals who are interested in advanced positions or positions with a large amount of responsibility should earn a specialized master’s degree or a Master of Business Administration (MBA) degree.
Both types of degree programs will equip financial analysts with the knowledge they need to oversee large investment accounts. While enrolled in a business or finance program, aspiring financial analysts should take general courses in mathematics, accounting, economics, and finance as well as more specialized courses that focus on topics like stock investments, bond valuation, risk management, and financial analysis.
Job Outlook for Financial Analysts
The job outlook for financial analysts is better than the outlook for most occupations. The U.S. Bureau of Labor Statistics is predicting double-digit growth in the coming years. Financial analysts can improve their individual outlook with advanced degrees (like an MBA) or the Chartered Financial Analyst (CFA) certification from the CFA Institute.