Being a financial analyst is one of the most popular career paths in finance. This is largely because analysts can work in a range of industries and also because the field has some great benefits, including a high earning potential. If you’re a business or finance major, a financial analyst role is definitely worth considering. Even if you’re not currently majoring in a related discipline, you might be interested in finding out more about this role and deciding whether it could be a good fit for you.
Here are some of the key things you need to know about being a financial analyst.
What is a financial analyst?
A financial analyst is someone who makes business recommendations for an organization based on analyses they carry out on factors like market trends, the financial status of a company (or companies) and the predicted outcomes of a certain type of deal. Analysts typically have academic backgrounds as business, finance or accounting majors and are numbers-driven individuals who are comfortable interpreting data and making recommendations based on that data.
What do financial analysts do?
Financial analysts are primarily responsible for creating financial models that can predict the outcome of certain business decisions. In order to do this properly, they need to aggregate a large amount of financial data while also taking in account factors like financial market trends and past transactions of a similar nature. Because the role can be quite different depending on where an analyst works — for example an analyst at an investment bank will be much more focused on assisting with deals and mergers that one working for an insurance company — the industry an analyst chooses to go into defines their day-to-day responsibilities. Overall however, analysts play a significant part in providing decision-makers with the information they need to increase revenue and manage assets successfully.
What are the challenges of being a financial analyst?
Finance is a very data-driven industry and one of the challenges of working as an analyst in being able to analyze and interpret financial statements, market trends and microeconomic conditions in order to offer recommendations on potential business deals and decisions. In addition to the technical challenges involved in aggregating and interpreting this complex data, one of the other challenges analysts face is the fast pace of the finance industry. Fortunately, by knowing what to expect and getting the right training, these challenges can be overcome.
What are the benefits of being a financial analyst?
Although working as a financial analyst does present some challenges, it’s also a career path filled with opportunities, particularly when it comes to having your pick of industries. This is because financial analysts play a necessary part in almost every area of business so whether you’re passionate about music or interested in technology, you’re likely to find an opportunity that’s right for you. In addition to having flexibility when it comes to industries, you’ll be playing a crucial role in pulling together the information required to make these decisions and to develop new strategies. In addition to learning new skills like how to create models in Excel and participating in exciting business processes, being an analyst will also offer you the opportunity to develop a strong professional network, an asset which you can continue to nurture throughout your career.
Although being a financial analyst comes with certain challenges, it’s also a great opportunity to work in an exciting field and play a key role in the decision-making processes of an organization. If being a financial analyst sounds like it might be for you, consider taking on a summer internship and getting a hands-on feel for the position.
Next, get more career tips for internships and entry-level jobs such as the Top 10 Things You Should Look For in a Company and find answers to common interview questions such as Are You Willing to Travel?