Financial Analyst Job Description
The thing that sets financial analysts apart from most people is their mathematical aptitude and a willingness to take certification exams and earn post-graduate academic degrees while they work long hours on the job.
It's not easy, and it's not a job for everyone. But for those who love an intellectual challenge, a career as a financial analyst can be extremely satisfying. Not only does it bring professional rewards, it also offers highly competitive salaries. In May 2008, the average yearly wages of financial analysts were $84,780, according to the U.S. Bureau of Labor Statistics -- and that's before you get your bonus.
Bonuses are typically 10 percent to 50 percent of salary for entry-level analysts and can increase to one to three times salary later in your career. And that's true even since Wall Street crashed in 2008. A third-year Wall Street associate analyst with a master's degree in business administration (MBA) currently pulls in anywhere from $300,000 to $500,000 in annual pay.
If you're ready to take on the challenge, here are the steps you'll be required to take as you climb the professional ladder on your way to becoming an expert analyst:
Study, study, study. For a start, you'll want to earn a bachelor's degree in a subject such as business, finance, economics, accounting or statistics. And you'll need to develop math, computer and problem-solving skills. Also, learn your way around Excel spreadsheets and PowerPoint presentation, and learn how to write well. English majors have been known to become financial analysts (but they usually pursue an advanced degree). In fact, many analysts eventually earn an MBA.
Develop an interest in finance. Read the business press, including The Wall Street Journal, because as a financial analyst you must understand how the capital markets operate and how deals get done. You'll likely work for a bank, insurance company, mutual fund company, broker-dealer or asset management firm. You will help people decide how to invest their money by writing reports and recommending stocks and other securities.
Then get ready to study some more. You will need to get a Series 7 license, which is required by many financial institutions for their registered representatives. The exam is administered by the Financial Industry Regulatory Authority and provides you with the qualifications necessary to make different types of trades. Although analysts don't trade, they do need to understand how securities such as stocks, bonds and futures are bought and sold.
Get your foot in the door. At Wall Street investment banks and other financial institutions, smart students are hired to work as paid summer interns while they're still in college. If they perform well, they may be asked to return to the company as a junior analyst.
Pay close attention to corporate culture. Successful financial analysts are good with numbers, of course, but their people skills are what will really help them get ahead. A polished professional demeanor and confidence in public speaking are essential. So are the patience to spend long hours sifting through detail-oriented data and the ability to communicate complex ideas using clear language.
Go where the action is. The BLS reports that there were 250,600 financial analysts in 2008, with many of them working at the head offices of big financial firms. Many of these jobs are in New York City.
Get to work and see your salary grow. After a few years as a well-paid junior analyst, and after getting that MBA, you can look forward to rising up the ranks as an associate. From there, you may be asked to stay at your company and become a vice president or a principal or managing director. If you leave your firm, there's plenty of opportunity throughout the financial community. You may become a management consultant, an investment advisor or a company executive. Or you may start your own financial firm.
Joyce Hanson is a Brooklyn, New York-based writer, editor and long-time blogger who has written about small business and careers for Crain's New York Business.