Financial Analyst Career: Education, Skills, and Outlook

Introduction

I feel that a good career for me would be as a financial analyst. I have chosen this career because I believe it would be a good fit given my skills, and it also offers strong future prospects. I took a skills test at CareerKey.org, which indicated that financial analyst was a good career match for me. I have strong math skills, suitable for a job that centers on working with numbers. I am also well-organized, and financial analysts need to be organized not only in their approach to the numbers but in their overall work habits. One aspect of my personality that gives me an edge in this position is that I enjoy working with people — I am personable and optimistic. Financial analysts must be able to communicate effectively, and their findings are used by a wide range of people within an organization. Having strong communication skills can help me not only to be a competent financial analyst but to truly excel in the role.

The Bureau of Labor Statistics' Occupational Outlook Handbook (2010) provides substantial insight into the qualifications required for financial analysts. Most financial analysts receive several years of training, which includes both an educational component and a vocational component. A bachelor's degree is almost essential for a financial analyst, and a graduate degree may also be required depending on the position. Most companies require that the degree be in a related field — finance, economics, statistics, or accounting. If a master's degree is required, it will almost always be in finance or accounting.

Education and Training

Vocational training varies depending on the specifics of the position. Many financial analysts are subject to licensure from FINRA (the Financial Industry Regulatory Authority) if they work in the securities industry. This license typically requires sponsorship from an employer, so securing a job is generally a prerequisite for FINRA licensure. For many financial analyst positions, a CFA (Chartered Financial Analyst) designation is also required. This credential is awarded by the CFA Institute. To obtain CFA designation, the applicant must hold a bachelor's degree, have four years of relevant work experience, and pass three rigorous exams covering a wide range of subjects. Obtaining the CFA designation is a demanding process requiring several hundred hours of study, but successful candidates are highly employable.

The broad skills required for success as a financial analyst include strong mathematical ability, analytical thinking, and problem-solving. Communication skills are highly valuable. Financial analysts also frequently work independently, making self-motivation and discipline critical. Specific technical skills include proficiency with software such as spreadsheet packages and specialized industry applications. Financial analysts must have considerable knowledge of statistics, accounting policies, taxation, budgeting, and economics. Additional skills will need to be developed depending on the chosen specialty — options pricing, bond valuation, country-specific knowledge, and risk management are among the more common examples.

The best way to gain experience is directly, by working in the industry. Because the CFA certification process and FINRA licensure both require employment and years of study, firms in the industry are accustomed to bringing on new recruits with the expectation that those recruits will remain with the firm through their training. For some specialties, a bachelor's degree in a related subject provides critical background knowledge — for example, a geology degree for someone aiming to become a mining industry analyst.

I possess many of the skills listed above. My mathematical and communication abilities are my greatest strengths. At present, I do not have the requisite experience or specialized financial skills, but my skill set is typical for someone of my age seeking entry into this industry. The functional skills will be built over time. Once a bachelor's degree is obtained, I will be able to enter the industry, begin developing my functional skills, and work toward certification.

Financial analysts work in offices, typically using computers. The work is oriented toward analytical tasks and is highly cerebral in nature — assembling spreadsheets, writing reports, and reviewing information. In the early years of the profession, hours can be very long, but there is potential for substantial financial rewards (Princeton Review, 2010). The median wage for financial analysts was $73,150, excluding bonuses. The bottom ten percent of earners in the profession make less than $43,400, while the top ten percent earn over $141,070. Annual bonuses are very common in the industry and can account for a significant portion of total compensation (OOH, 2010). Benefit packages are typically strong for financial analysts. Specific salary data for Miami-Dade County is difficult to obtain, but the area does have a small financial community that offers some career opportunity. Notably, in Miami-Dade County a working knowledge of Spanish is often a valuable asset — if not an outright prerequisite — for employment.

The salary range is determined largely by experience. The profession is hierarchical, and junior financial analysts are expected to pay their dues. Salary can also be influenced by professional networking — building a large network of contacts opens up better opportunities for skilled analysts (Princeton Review, 2010). Having a specialty outside of core finance can also drive up salary, particularly in fields that have relatively high demand for specialized analysts but a relatively limited supply of qualified candidates.

Working Conditions

Working conditions are also shaped by corporate culture. Financial analysts typically work in a conservative field characterized by high standards of dress and formality. The field remains male-dominated, and at some firms the culture can still be somewhat restrictive for female analysts, including the presence of a glass ceiling. Vacation time is limited during the first few years, but senior analysts generally enjoy a high degree of autonomy and greater flexibility in setting their own schedules.

Demand for financial analysts was expected to increase by 20% by 2018. The industry is on a long-term growth trajectory as the field becomes more complex and the general public grows more knowledgeable about investing. Employment in the field stood at 250,600 in 2008 and was projected to climb to 300,300 by 2018 (OOH, 2010). Despite this growth, competition for positions is expected to remain intense. The field is both lucrative and high-profile, attracting more candidates than there are available positions. This competition demands that prospective financial analysts build the strongest possible academic background.

The level of competition for financial analyst positions is likely to continue increasing. The role tends toward geographic concentration — the number of available positions in New York is far greater than in Miami, for example. However, competition in major financial centers is also higher, which means it may be easier to find work in smaller markets that are off the radar of most candidates.

The financial analyst career is a strong option for me. What I did not fully appreciate before conducting this research is how much work the career demands. The technical requirements are high, requiring many years of training even after a master's degree is obtained. The field is highly competitive, and although it is expected to experience steady growth, competition for positions is projected to increase.

Conclusion

Princeton Review. (2010). Financial Analyst. Princeton Review. Retrieved April 15, 2010 from http://www.princetonreview.com/Careers.aspx?cid=68

College Board Book of Majors, 4th Edition.

CareerKey.org website, various pages. (2010). Retrieved April 15, 2010 from http://www.careerkey.org