Labor market activities in the human service field

Labor Market

The position of financial analyst varies slightly from role to role, but there are a number of common themes uniting the financial analyst position. Most financial analysts are involved in the evaluation of investments or assisting in investment decisions. Financial analysts typically work for banks, insurance companies, institutional investors such as pension funds or mutual funds, securities firms and the business media. The position involves analyzing the financial statements and situation of publicly-traded firms and making assessments of the value of those firms' securities. Investment recommendations are typically made.

Most financial analysts develop a specialty with respect to a particular industry or geographic region. Keen expertise in one particular area is cultivated over many years, adding significant value to the analyst position. In general, the financial analyst role is an end, but some will progress to the role of portfolio manager, where investment decisions are ultimately made based on portfolio objectives and the recommendations of the financial analysts.

Competition for financial analyst positions is intense, especially at the entry level. Advanced training is typically required to gain such a position. A bachelor's degree in finance is typically the bare minimum qualification needed. However, it is recommended that a prospective financial analyst acquire an MBA, preferably in finance or economics. For many analyst positions, an undergraduate degree in a functional field is required along with a master's degree in finance. For example, a mining analyst would require at least a bachelor's degree in geology in addition to the MBA in finance. Strong mathematical expertise is required for this position, including advanced statistics and calculus. The ability to use multiple compute applications is essential, as most financial analyst positions entail a high degree of financial modeling, including statistics and calculus. The position therefore requires both mathematical expertise and functional expertise.

In addition to the basic educational requirements, most financial analysts are required to build up an expertise in a particular area. It also helps in many cases to have contacts in the industry or region being analyzed. For this reason, experience in the industry or region is often required or at least preferred in addition to the financial training. Depending on the specific nature of the position, securities-related licensing may be required, in particular if the position involves any trading or advisory function. The ability to master a multitude of software packages is also required, as the position entails using a wide variety of analytical and communications tools, ranging from statistics software to Bloomberg or other investment information interfaces, plus the full range of presentation and communications tools.

Financial analyst positions are generally high-paying jobs. According to the Occupational Outlook Handbook, the median wage for financial analysts is $73,150 as of May 2008. The lowest 10% made less than $43,400 and the highest ten percent made more than $141,070. These figures do not include performance bonuses. Such bonuses are standard in the industry and in many cases account for a significant part, or even the majority, of earnings for financial analysts. Financial analysts at smaller financial institutions and in government roles typically earn lower bonuses than do analysts at investment firms.

One company with whom the position was discussed was the San Diego County Credit Union. This company indicated that as a smaller financial services firm, it had only a small group of financial analysts on hand to assist with investment decisions. The SDCCU had one opening at present, and indicated that over the course of a year there may only be one or two openings at their company for a financial analyst position. The firm starts junior analysts at between $55,000-$60,000 per year, with their most senior analysts earning a base of around $80,000. They pay an annual bonus that fluctuates depending on the credit union's profits -- the bonus is a dividend paid with the amount of ownership in the credit union being tied to the seniority level of the position and the worker.

SDCCU requires that its financial analysts have a minimum of a bachelor's degree, be at least working towards a CPA designation and have between 3-5 years experience. These are considered to be the minimum qualifications, but the company implied that their hires will typically have much more experience and a higher level of qualifications that this, owing to the high degree of competition for financial analyst positions. Their current opening is less specialized than many financial analyst positions, so the pool of qualified candidates is expected to be relatively large, increasing the competition.

A wide range of benefits are included. In addition to a share of the credit union, financial analysts receive benefits including health, dental and life insurance coverage. They believe that their benefits package is competitive with financial service industry norms. SDCCU only has one position open at present. A bachelor's degree and 3-5 years experience are the minimum requirements.

Another firm that hires financial analysts -- sometimes called investment officers, investment managers or portfolio managers depending on the specific role -- is the California Public Employees' Retirement System (CalPERS). CalPERS is one of the largest institutional investors in the United States and as such typically has several openings at once. They may have between 15-20 openings for financial analysts over the course of a given year.

The qualifications for CalPERS are different than for most firms hiring financial analysts. This company is part of the California civil service, and therefore is subject to testing and requirements that are common for all California civil service positions. As a result, candidates not only need to have the basic academic and experiential qualifications but they also need to have passed the California state testing regimen as well. That said, as one of the nation's largest institutional investors, there are almost always openings for financial analysts of one type or another at CalPERS.

The pay scale for financial analysts at CalPERS varies widely. A junior analyst with limited experience may make only $50,000-$55,000. More senior analysts and portfolio managers, who are responsible for tens of millions of dollars in investments, are paid upwards of $300,000 not including bonuses. It was indicated that for some, bonuses could double the rate of pay. The bonuses are, it was pointed out, competitive but not as generous as what might be found at Wall Street firms performing essentially the same function.

CalPERS financial analysts receive the benefits afforded to all California public service employees. As a pension plan, CalPERS naturally offers a pension and retirement benefits. The company also offers a full slate of disability coverage, death benefits, health coverage, long-term care benefits and even a member home loan program. The latter includes 100% loan financing and the ability to borrow at a fixed rate. These special loan programs are subsidized by the California tax payer for the benefit of all CalPERS employees. There are only a couple of positions open at present with CalPERS. These positions vary in requirements because they vary in terms of seniority.

Goldman Sachs is a leading Wall Street firm that hires financial analysts. They hire between 75-100 new analysts per year, mostly into "New Analyst" positions, or entry level. Other hiring is done through either word of mouth or from hiring agencies. These new analysts are typically well-compensated for the industry, starting in the range of $50,000 but upwards of $70,000 depending on existing qualifications. More senior analysts can make well over $1,000,000 a year, most of that through bonuses.

There are several openings at present. The candidates are generally required to have an MBA, but that is flexible depending on other qualifications. Top academic and business performance is expected, as competition to get into Goldman Sachs is very high. The non-entry level openings require extensive work experience, impeccable references and significant academic qualifications.

The financial analyst position varies from company to company, but in general entails detailed analysis of companies and investments. These positions generally pay well. The outlook for financial analysts is good, as openings are expected to increase rapidly over the coming years. However, there is strong competition for the position as well, meaning that candidates will need to have substantial qualifications. Candidates should have at least a bachelor's degree, but often an MBA in finance and/or a CPA designation as well. For most openings, experience is required. Many financial analyst positions are specialized, so a candidate would need expertise in a particular industry or country in order to qualify for the position.