How Do I Become a Financial Analyst?

Financial AnalystFor individuals looking for a career that involves working with numbers and analyzing financial data, it could be beneficial to find out how to become a financial analyst. Whether looking to work in a fast-paced, high energy corporate office as a manager or in a home office as a private consultant, there is a career path to follow for every future financial analyst.

An Overview of Financial Analyst Careers

A financial analyst utilizes a number of skills and diverse set of knowledge in order to make recommendations for financial operations such as investments, handling stock, and making predictions. In order to make predictions and recommendations, analysts must be skilled in modeling, interpreting financial trends, and forecasting. Financial analysts also need solid communication skills for presenting results and conclusions in both written reports and verbal presentations.

Most analysts can be categorized into three groups: buy-side, sell-side, and investment. In addition to these categories, financial analysts might focus solely on investments or equities. An analyst might also specialize in a particular industry such as insurance, technology, or international financial operations. Focusing on one of these specializations and gaining the knowledge required to be successful as a financial analyst begins with a bachelor’s degree.

A Degree to Become a Financial Analyst

A bachelor’s degree is the most common educational requirement for beginning a career as a financial analyst. Some universities have separate financial analyst degree programs; however, the majority of programs include a concentration in financial analysis within a business or business administration degree. Undergraduate students complete courses in general business, including such subjects and macroeconomics and microeconomics. These courses are beneficial for beginning upper level coursework in financial analysis, forecasting, and planning.

After completing general business and general education courses, undergraduate students will complete courses in the financial analyst concentration. Typical courses include financial management, financial policy and strategy, capital markets, investment valuation, securities markets, derivatives, risk management, financial modeling, and equity analysis. Additional courses might include special topics in financial analysis, capstone projects, and cooperative learning workshops.

For future financial analysts who are interested in working within a specific industry or focusing on one specific area of the field such as investments or portfolio management, additional coursework might be taken for electives as well.

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Professional Certifications and Designations

In many fields, professional certifications help to illustrate a candidate’s knowledge in a particular field and can be useful for advancing in a career as well. For financial analysts, the most commonly required or preferred certification for a senior level analyst or manager is the Chartered Financial Analyst (CFA) designation, which requires four years of experience in addition to a bachelor’s degree and successful completion of three professional examinations.

Another type of professional development helpful for both experienced and entry-level analysts is the Certificate in Investment Performance Measurement (CIPM) designation. Additional information can be reviewed at the CFA Institute website. Other designations that can be helpful for a financial analyst are Certified Public Accountant and Certified Financial Planner.

Qualified financial analyst professionals are expected to continue to increase in demand in all types of industries and organizations. Completing a postsecondary education, earning professional certifications, and gaining skills in financial analysis are the first steps to take to become a financial analyst.