Welcome to Financial Analyst HQ, the most trusted online resource for Financial Analyst professionals. Whether you are beginning to enter the finance industry or have many years of experience, this site will help you achieve great success in a competitive, but lucrative and rewarding industry.
What is a Financial Analyst?
A Financial Analyst or Chartered Financial Analyst gathers detailed information, assembles spreadsheet, writes business reports and reviews specific information related to a prospective deal. They assess the performance of stocks, bonds and other types of investments specific to their industry. They examine the deal in its entirety and typically recommend a course of action. The research can be on either, or both, a macroeconomic or macroeconomic level, depending the type of work. In addition, a successful analyst must be able to research and understand current developments and predict future assumptions.
Analysts in this industry can work in a junior or senior role within a firm and in different niches. The position often leads to other career opportunities within or with another company.
Who hires Financial Analysts? Financial analysts generally work for investment banks, insurance companies, mutual fund companies, pension funds or security firms and other businesses that need to evaluate potential investments.
There are two types of analysts; the “buy side” and the “sell side.”
- The “buy side” analysts develops methodical and sound investment strategies for companies with large amounts of cash to invest. These businesses are typically hedge funds, mutual funds, insurance companies and large universities with hefty endowments.
- The “sell side” analysts brokers for financial services agents on whether to recommend a client to buy, hold or sell a stock, bond or other financial investments.
Financial Analysts typically focus on trends affecting a specific industry, country, culture, business environment and political conditions. In order to succeed as a financial analysts, one has to keep up with the news, in its entirety, surrounding a possible investment.
Gathering information on the macro economy, as well as a specific company and micro economy conditions is vital in order to succeed as an analyst. Professionals in this field need to do a lot of reading at their own leisure. Publications to read and highly recommended include The Wall Street Journal, The Financial Times, Forbes and The Economist.
A sample of duties include;
- Recommend individual investments
- Forecasting a potential investment
- Evaluate current and historical data
- Study economic as well as business trends
- Prepare written reports pertaining to a specific subject
- Prepare presentations for potential investment opportunities
- Regularly meet with investors/clients to provide recommendations
Financial analysts work primarily in corporate offices full-time but many work more than the traditional 40 hours per week. In addition, analysts typically travel frequently visiting companies onsite or meet face-to-face with potential investors. Analysts also attend conferences in their related field in order to network and expand their knowledge.
A financial analyst’s salary depends on the type of business and region they are working in. Many analysts receive large bonus’s at year-end based on performance and goal expectations. The large bonus payout is obviously dependent on the company and their incentive program but could double an analysts base salary. Below are the average salaries for current financial analysts.
Chartered Financial Analyst
Normally, Financial Analysts must have obtained at least a bachelor’s degree in a related field such as finance, statistics, accounting, business administration or economics. Many employers today, however, are looking for a candidate who possesses a Master’s in Business Administration (MBA). Additionally, many finance professionals decide to acquire their Chartered Financial Analyst (CFA) in order to advance their career in their field. The CFA exam consists of three separate tests that must be passed sequentially.
Important Qualities of a
Good Great Financial Analyst
- Analytical Skills – A successful professional in this field must be able to analyze data and come to a concrete conclusion for a potential investment.
- Detail Oriented – Analysts must pay very close attention to detail when reviewing a possible investment for a company as it will affect a company’s bottom line. One decimal in the wrong place or a minuet mathematical mistake could cost a company hundreds of thousands of dollars.
- Communication Skills – Analysts must be able to explain their recommendations to their clients in clear, concise and simple language that they can understand. A good communicator must be able to tell a story based on raw data.
- Decision Making Skills – Financial analysts must make a recommendation on an investment they are assigned to. These decisions must be made with careful consideration but quickly in some cases. Other company’s and individuals can sniff out your hesitation. You need to make clear-cut decisions that is backed by quantitative and/or qualitative research.
- Technical Skills – Financial analysts are often using online programs that map out trends, analyze raw financial data, create formulas, etc. A lack of technical skills can separate you from someone who possesses strong computer skills. With all the technology available today, a thorough understanding of Excel at the least will be necessary in this field.
- Math Skills – Analysts use their mathematics skills to model, forecast and evaluate potential investments. Having strong math skills will enable analysts to solve complicated business problems.
Financial Analyst Outlook
According to the Bureau of Labor Statistics, jobs as a financial analyst are expected to grow by 23% between 2010 and 2020. This represents 54,200 new positions created on top of the 236,000 in existence as of 2010.