According to the Bureau of Labor Statistics, the position of financial analyst is a fast-growing one, with approximately a 12% job growth expected by 2024. This is a higher rate than the average, so the outlook is good. You may have heard of this professional position and know that it seems to be well-respected. It’s also a very competitive career. Read on to learn more about the job and what it takes to enter this coveted position within the financial services industry.
Financial analysts research and stay abreast of both microeconomic and macroeconomic trends within various private and public financial sectors. Their primary goal is to provide advice to those within their industry regarding the most strategic and profitable economic decisions. These are the professionals often in charge of deciding whether to buy, sell or trade company stocks. This takes an expert overall knowledge of economics, as well as strong analytic skills, in order to be able to make critical judgments and to most accurately predict future trends.
It is possible to enter the field with a bachelor’s level degree; however, a number of jobs as a financial analyst require an advanced education in a master’s program. You can choose any number of majors in order to enter the profession. It is important to have a solid coursework foundation in the areas of economics, math, business and accounting. Those who go on to further their education and attain an MBA or similar degree may be hired as a senior analyst. Obtaining certification such as that of Chartered Financial Analyst can increase your chances of being hired, along with your potential salary.
Types of Analysts
Financial analysts work for all kinds of institutions such as banks, insurance companies and investment firms. The type of position they hold is usually based on the employer for which they work. While there are a wide variety of specific positions in the field, let’s take a look at the three main categories. These are analysts employed by investment banks, those who work for what is known as “buy-side” investment firms and those working with “sell-side” investment firms.”
Financial analysts working at investment banks are usually involved in the decision-making process of determining which deals are wise and which should not be considered. They analyze the market conditions, examining trends and using their insight to cast predictions on investments, mergers and other deals. Sell-side firm analysts are the professionals who are intimately familiar with securities and their industries. They use their expertise to provide advice on whether to buy, sell or hold stocks. Financial analysts who are employed by a buy-side firm depend on information such as the reports prepared by sell-side analysts to research the stock market. Buy-side firms only handle funds within their own organization. The analysts within these investment houses focus on adding quality stocks to their portfolios and in figuring out the prime time to sell in order to net the most profit.
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There are many opportunities for jobs in the area of finance, and opportunities to advance do exist. Becoming a financial analyst will take a great deal of study and networking, but the rewards are great.