How To Become a Financial Analyst in 2022

How To Become a Financial Analyst
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Financial analysts are experts who are tasked with making use of a company’s financial data to provide options for the company to decide.

These decisions are mostly investment-related. They also recommend a better option to the company for better performance.

A financial analyst must be in the know of the recent development in the financial field. They use their skills to determine the best marketing option for a company.

During these past years, the financial sector has seen a tremendous change starting from the 2008-2009 recession to the coronavirus period.

However, these professionals were there to guide organizations and the government to make good investment choices.

Taking a step into this field can be stressful and demanding but it pays off in the end.

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Financial Analyst Job Description

You may be wondering what financial analysts do. Well, keep reading to find out.

People who are financial analysts are tasked with analyzing and studying data for making financial decisions for businesses. The job description of financial analysts can be seen below:

  • Preparing financial reports and making some forecasting using available data and metrics are what financial analysts do.
  • They also plan some financial models that help them in decision-making. 
  • Financial analysts make use of data and from the past to spot trends and also confirm if there is room for improvement. They work hand in hand with the accounting department to make sure that the financial reports are accurate. 
  • They are also responsible for preparing reports and data that the top-level managers will use.
  • Performing market research, data mining, and business intelligence are also things that financial analysts do. 

These professionals are responsible for so many things in an organization and a few have been highlighted. There’s no doubt that they are of great importance to the top-level managers as well as the low-level managers.

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Financial Analyst Skills

To be a good financial analyst, you need educational knowledge and some important skills that are sought after by most employers. A financial analyst should possess the following skills:

  • Accounting skills: This skill helps a financial analyst to manage cash, carry out a cost analysis, and helps them to prepare budgets. To do well in this field, this skill is very important added to your educational knowledge.
  • Interpersonal skills: This skill is important because it is your relationship or how you deal with your colleagues at work. This skill gives you the ability to communicate in simple terms the plans of the company to investors and also make them see the reasons for your plan and future projects.
  • Communication skills: Most times, they task financial analysts with managing businesses and customers who are less knowledgeable about financial terms. Most expect them to make use of graphs, charts, and other things to pass messages across.
  • Problem-solving skills: Financial analysts solve equations and mathematical series that are difficult for ordinary people and they make such equations easy to understand. They also work hard to help any organization pay off their debts and manage their liabilities.
  • Technical skills: With the current growth in technology, some software helps financial analysts run their analysis smoothly. Such software includes SQL, Excel, etc. Therefore, to become a good financial analyst, you need technical skills.
  • Analytical skills: Being able to plan the organization’s finance is also an important skill a financial analyst should possess. It requires planning and analytical thinking work together and in this field.

 

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Financial Analyst Certification

Having a professional certificate as a financial analyst can increase your earnings massively. It can also increase your reputation among organizations that require the services of a financial analyst. I

f you are looking to advance your career in financial analysis, there are finance certifications that will give you a good reputation like Chartered Financial Analyst(CFA), Certified Public Accountant(CPA), Chartered Alternative Investment Analyst(CAIA), Certified Financial Planner(CFP), Financial Risk Manager(FRM), Financial Modelling and Valuation Analyst(FMVA).

These financial analyst qualifications are necessary if you want to step up your game in this field.

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Chartered Financial Analyst(CFA)

The Chartered Financial Analyst certification is one of the best certifications any financial analyst could dream of getting in any part of the world. It takes about four gears to complete it with about 3 levels to it.

It is one of the most respected certifications among others. This financial analyst certification focuses on portfolio management and investment analysis.

The certification costs between $4,000 to $5,000 and it also depends on the level. This certification is respected both locally and internationally but the success rate is very poor.

If you are planning to work in asset management or equity research, then this is also the best certification.

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Certified Public Accountant (CPA)

Many finance professionals instead of a finance certification prefer the Certified Public Accountant (CPA) certification. In the accounting industry, they see CPA as a big deal and it helps in the financial world.

The scheme of work contains auditing and attestation, business environment and concepts, financial accounting and reporting, as well as regulation. This certification costs about $3,000 and is usually covered by the employer.

Chartered Alternative Investment Analyst(CAIA)

The Chartered Alternative Investment Analyst(CAIA) certification focuses on alternative investments and they are aimed at experts who are in the asset management field and also a hedge fund.

The schemes covered by CAIA are ethics, hedge funds, private equity, real assets, structured products, allocation of assets, as well as risk management.

Acquiring this certificate costs about $3,000 and it comprises two levels. The pass rate is above average which is 70% and takes up to 12-18 months to complete this certification.

Certified Financial Planner(CFP)

Certified Financial Planner(CFP) certification is good for anyone looking for a future in investment and wealth management. This certification has to do with financial planning and it is also good if you wish to manage high net worth.

It costs about $2,000, although it can be higher or lower depending on how many courses you choose. The last rate for this certification is about 67%.

Financial Risk Manager Certification

Financial Risk Manager Certification is for experts who are looking for a future as a risk officer, risk analyst, and risk manager.

Acquiring this certification will cost about $1,500 and it takes 12 months to complete. It has a pass rate of 50% which is fair too.

This certification is very cheap compared to other certifications, however, it is new to the system, which is why it is less globally recognized.

Financial Modelling and Valuation Analyst(FMVA)

Financial Modelling and Valuation Analyst(FMVA) certification is a new one and it is becoming an option for experts looking to obtain a financial modelling certification.

The pass rate of this financial analyst certification is 70%. This certification is a good one as there are skills you will acquire while undergoing training for this certification.

These skills include financial analysis, financial model, and business valuation. It can be applied in real estate, e-commerce, retail, and other industry-specific financial models. It can as well be used during mergers and acquisitions, and also during a PowerPoint presentation.

Is Financial Analyst a Good Career?

Many people at different levels of education have picked interest in financial analysis, both accounting students and even people from other majors.

This job requires a lot and it is also rewarding to earn. You can work with several organizations and have first-hand knowledge of different financial settings.

To take this job without experience, you need to work hard and even put in some extra time in your studies.

This job is a good career anyone can choose only if you can handle what comes with it. The high increase in demand for financial analysts has made the job a lucrative one and if you have knowledge and skills for this job then you are on the right track.

Financial Analyst Salary

You may want to know how much financial analysts make before deciding whether you should venture into that career path.

Working in the finance sector is very rewarding and lucrative both locally and internationally.

As of 2019, financial analysts make an average of $81,590 annually and the top analysts earn about $109,330 annually while the entry-level analysts earn about $61,850.

Their annual salaries depend on their skills and experience. During your four years as a financial analyst, your annual salary will be about $61,000 while an expert with over 5 years experience will earn over $81,000 then with 10 years of experience you can be earning about $100,000.

How To Become a Financial Analyst

Becoming a financial analyst is a good career yet demanding in terms of certifications and time.

To become a financial analyst, most employers would require a bachelor’s degree in Economics, Finance, Statistics, Accounting, Mathematics, Biology, and Engineering.

But if you are graduating from a less reputable school, you can enrol for an MBA degree in a highly reputable business school.

Asides from having a bachelor’s degree and MBA, having skills is also important for any financial analyst.

If you didn’t graduate with either a bachelor’s degree or MBA, you can even register for the Chartered Financial Analyst(CFA) exams. But before taking the series exams, you will be asked to provide a sponsorship letter from a FINRA member.

How To Become a Financial Analyst With No Experience

Financial analysts go through financial data and they use the required software, skills, and observations to help businesses make certain decisions.

They advise a company on whether an investment is right at the moment, whether a stock should be sold, and the course of action for the company. 

The financial sector is a big and booming sector that pays out hefty salaries and bonuses every year because they handle finances as people always want to invest their money.

Unlike some other careers like Law, Medicine, and Engineering, becoming a financial analyst is straightforward and less difficult.

Recently, before companies will hire you, you will either have a first degree from a prestigious school or you’ve acquired your MBA from a prestigious business school. But you can be a financial analyst without experience through networking with individuals online and offline. 

Some people in the country have gotten good-paying jobs from someone they either met online or offline.

Companies are very careful with the hiring process because they deal with millions and billions of people’s funds. Someone you networked with and got to know can at some point speak for you and you can get a job as a financial analyst even without experience or certification.

Learning the terms and language of the financial analyst can also boost your chances of getting a job as a financial analyst even without experience. When you are conversing with like-minded people in the financial field and you’re using the right terms, they sees you know what you are doing and you’re very experienced. 

You can also enrol yourself in training programs where you are taught how to use what you learned practically because some organizations don’t have time to teach employees again.

Also, you can as well gain certificates on CFP, CFA, CFS, CIMA, and CLU. You could choose places and apply for internships. Some companies every quarter accept interns, it could be paid or unpaid internships but the most important thing is that you acquire the knowledge.

You can also learn from mentors and even your colleagues at work. Even if you have no experience, ensure you have a skill or skills that will make your potential employers pick interest in you and will want to take the liberty of training you at their own expense.

Some companies look at taking in less knowledgeable people in the field to train them and they become good pillars for the organizations but it still requires all that has been mentioned from networking down to acquiring a skill or a certification.

Frequently Asked Questions 

Where do financial analysts work?

Financial analysts work in places like banks, insurance companies, as well as various businesses.

Can financial analysts work anywhere?

Apart from working in banks, insurance companies, and various businesses, you can have your office outside your home (if you’re an independent financial analyst).

Is being a financial analyst stressful?

A career as a financial analyst is a very stressful one. However, if you think you are equal to the task, then you can take it up.

Is there a demand for financial analysts?

There are about 41,000 job openings for financial analysts each year.

Can financial analysts work from home?

Yes, financial analysts can work from home but this is dependent on the company.

Conclusion

Being a financial analyst without practical knowledge can be tough but you will have to work hard from your end.

To ease up your journey and build a reputable career path, you can acquire some financial analyst certifications, and build up your network as well.

If you can achieve either of them then you can be sure to get at least an entry-level job as a financial analyst or a junior level.

References

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