Financial Analyst: A Rapidly Growing Career Option in Finance
During the recent financial crisis of 2008, this was one career that was badly affected. We saw many financial analysts working in large investment banks losing their jobs and the future looked bleak.
However, with the recovering economy, the prospects for this career option are again looking good.
As per the recent projections by the Bureau of Labor Statistics, the financial analyst job is expected to grow by 23% from 2010 to 2020. This is a much faster rate than many other popular professions.
What do they do?
Financial analysts, as the name suggests, are experts in financial analysis. They conduct thorough research on various companies from the perspective of investments, and provide their view and facts about the prospects of the companies. The roles are generally suitable for people with strong analytical skills. Financial analysts are also known by many other names such as equity analysts, investment analysts and research analysts
They are hired by both buy-side as well as sell-side firms. At the buy-side firms such as brokerage-houses they provide buy-hold-sell recommendations for various stocks to help their clients make intelligent investment decisions. At the sell-side firms, such as mutual funds, university endowment funds, and hedge funds, their analysis is used by the firm to invest and grow money.
Financial analysts may also specialize in a specific area, for example, countries, or a particular industry/sector, in which case they provide broad outlook about the country or sector.
How much do they earn?
Overall, financial analysts earn good salaries. The median salary is around $75,000, and it can go as high as $140,000. If you are just entering the industry, you may get a starting salary of ~$40,000.
To become a financial analyst, you must have a graduate degree, preferably in business, finance, accounting, or statistics. Getting a Master’s degree in Finance is highly preferred, since many investment banks directly hire students from reputed business schools.
Many people are also going for the Chartered Financial Analyst (CFA) certification, which is a comprehensive certification program for financial analysts. The CFA designation is highly respected in the industry and ups your career prospects in the industry.
You can also consider other exams such as Series 7 and Series 63, which are aimed at financial brokers.
In conclusion, the financial analyst position is expected to grow much faster than many other finance professions. It’s a lucrative career but is also highly competitive as the number of people wanting to join the profession is growing rapidly.