Financial Analyst

What a Financial Analysts Does

Financial analysts help companies analyze risk and investments so that they can make good business decisions that increase profitability and efficiency. Considering factors like profit-sharing, stocks and bonds, commodities, employees, and more, financial analysts work for a range of companies and institutions, including banks, private businesses, insurance companies, securities firms and more. After analyzing a firm's investments, they will work with managers to help them come up with ways for them to handle money and make investments that will increase profit for the future. Most financial analysts fall into two categories: buy side analysts and sell side analysts. Buy side analysts work for very large companies that have great amounts of money to invest in stocks, bonds and mutual and hedge funds. Side analysts work for banks and securities companies who want to sell those investments. Financial analysts also often choose a specialty or particular industry in which to work, like risk, options, or international business.

How to Become a Financial Analyst

You must earn at least a bachelor's degree to become a financial analyst. Common majors include business, accounting, statistics and mathematics, and if you want to have a better chance at getting a good job, you should seriously consider getting a master's degree in business. You will need to demonstrate your working knowledge of current market strategies and investment trends, as well as your ability to forecast investments in a way that results in maximum profitability for companies and/or banks. If you go to business school to earn an MBA, majoring in math as an undergraduate can be very helpful to developing your problem-solving and math skills as a financial analyst. Once you gain enough experience as a financial analyst, you may be able to move up to become a portfolio manager or even a consultant.

Career Outlook for Financial Analysts

The Bureau of Labor Statistics estimates that there were about 250,600 working financial analysts in the U.S. in 2008. The job outlook for analysts is very strong, and employment should increase by about 20% through 2018. That rate is much faster than the national average for all other occupations and will result in about 49,600 new jobs for the industry. Those with CFA certifications and master's degrees will have the best job prospects, as competition is still fierce. Financial analysts earned a median annual salary of $73,150 in 2008, with the middle 50% earning between $54,930 and $99,100. Annual bonuses are also a large part of this industry and can raise this number dramatically. Depending on your education background, geographic location and work experience, you could also earn less or more than this median range.