Businesses depend upon financial analysts for their expertise and guidance on investments, borrowing and other financial decisions. These professionals provide financial analysis and accounting support, and assist management teams by developing performance reports and metrics for use in long-term, annual and quarterly planning.
To make solid financial decisions, business owners and management teams need accurate information on their present financial situation, as well as projections of future cash flows, economic and industry trends, and customer demand. Financial analysts provide this information by gathering and analyzing data. They also develop and implement analysis projects, whether the objective is to manage banking relationships, invest or borrow funds, or launch a new product or service.
Other tasks that are part of a financial analyst’s job:
- Compiling data for annual reports, budgets and cash flow reports
- Assessing operational performance and setting investment priorities
- Developing detailed analyses to support investment decisions and forecasts of return on current and proposed options
- Recommending ways to improve financial operations
Financial analysts work closely with a company’s management team and external partners such as banking and legal advisors. Some specialize in specific industries, such as energy, or geographical regions, such as Europe or China. Employers that hire financial analysts include private and public companies, defense contractors, healthcare providers and government agencies, among others.
Job Outlook and Salary Range for Financial Analysts
Through 2024, the U.S. Bureau of Labor Statistics expects job growth for financial analysts to increase 12%, faster than overall job growth.
With a growing number of financial products, along with the complexity of investment portfolios, the BLS expects a greater need for financial analysts’ in-depth knowledge and expertise, particularly of geographic regions with emerging markets. However, competition for those jobs is expected to be strong.
The BLS reported the median salary for financial analysts was $81,760 in May 2016. The top 10% in the pay range had a salary of $165,100, while those in the lowest 10% had a salary of $50,350.
Regional market conditions can affect employment prospects and potential earnings, as can an individual’s work experience and educational qualifications.
Education and Training for Financial Analysts
Most financial analyst positions require a bachelor’s degree in accounting, business administration, economics, statistics, finance or a related field. Employers may show preference to candidates with advanced degrees, such as a Master of Business Administration (MBA). The BLS reports that coursework in mathematics, economics and statistics are helpful; advanced coursework in tax laws and risk management could also be beneficial.
Some employers seek out candidates with certifications, such as the Chartered Financial Analyst (CFA) credential from the CFA Institute, which has education, experience and exam requirements. Many positions may require licensing through the Financial Industry Regulatory Authority (FINRA), which enforces regulations for brokers and brokerage firms.
Some financial analysts advance to positions such as portfolio analyst, fund manager or senior financial analyst after gaining professional experience.
Military Occupational Specializations
Numerous military roles incorporate skills and knowledge similar to those used by financial analysts in the civilian job market:
- In the U.S. Army, those roles include financial management technician and financial manager.
- U.S. Air Force roles include cost analysis officer and financial management officer.
- In the U.S. Navy, roles include business management, finance and accounting, and administration.
- U.S. Marine Corps roles include financial management officer and financial management resources officer.