How to Become a Financial Analyst

Financial analysts enjoy a rewarding career path, as they combine financial acumen with analytical thinking and strategic insight to help businesses and investors make informed decisions. Before committing to the career path, aspiring financial analysts should learn about the role of a financial analyst and the types of positions available, in addition to the skills, certifications, and steps — like earning a master's degree — that could help them launch successful careers as financial analysts. 

What Is a Financial Analyst?

When exploring how to become a financial analyst, it is crucial to understand what exactly a financial analyst is. A financial analyst is a professional who guides individuals and businesses, helping them make data-driven decisions about how to leverage their money for profit.

What Does a Financial Analyst Do?

A financial analyst conducts research, collects data, organizes data, and performs financial analysis using a variety of methods. They are responsible for financial forecasting, developing recommendations, building models, creating presentations, and generating reports to advise businesses or individuals on their investment decisions and financial management strategies.

Some of the regular responsibilities of financial analysts include:

• Assessing market trends and economic conditions
• Analyzing financial statements
• Building financial models for forecasting
• Evaluating investment opportunities
• Portfolio management and investment recommendations
• Assess investment performance
• Business performance evaluation
• Risk assessment
• Translate financial data into actionable insights
• Stay current with new technologies
• Reporting, presenting, and stakeholder communication

Types of Financial Analyst Positions

Interested in how to become a financial analyst? Financial analysts work in a variety of different positions within the career field. Let’s break that down a bit further:

Investment Analysts

Investment analysts focus on financial investment decisions, evaluating financial data, researching the market, and providing recommendations within investment banks, brokerage firms, mutual fund companies, hedge funds, pension funds, or other wealth management firms. 

Corporate Financial Analysts

Corporate financial analysts work for businesses to evaluate financial health and support data-driven management decisions regarding budgeting, investing, and financial planning to leverage opportunities, avoid pitfalls, and maximize profits. 

Risk Analysts

Risk analysts are responsible for identifying, assessing, monitoring, mitigating, and minimizing potential risks for businesses, such as credit, market, operating, and regulatory risks. 

Portfolio Managers

A portfolio manager creates and oversees investment portfolios on behalf of clients, aiming to minimize risk and maximize returns based on the client's individual assets, risk tolerance, and goals. 

Quantitative Analysts (Quants)

Quantitative analysts specialize in mathematical analysis using statistical models to analyze financial data, forecast, and provide recommendations for managing risk and maximizing profits. 

Skills Needed to Become a Financial Analyst

To perform the role of a financial analyst, one needs a combination of strong technical skills and knowledge, along with a variety of soft skills that support successful collaboration with others. 

Analytical Skills

Analytical skills are a core requirement for financial analysts, as they must be able to comprehend large data sets and consider a variety of factors while understanding complex problems, identifying trends, and extracting meaningful insights. 

Financial Modeling

Financial analysts use statistics and a variety of modeling strategies and methods to create financial models and forecast future financial performance to evaluate potential investment strategies.

Communication Skills

Financial analysts are often responsible for translating complex data and principles into easily understandable, actionable insights that they can communicate with clients, businesses, and stakeholders. 

Problem-Solving

In addition to analysis, financial analysts must possess strong problem-solving skills that enable them to devise creative solutions and recommendations for the problems and challenges their analyses identify. 

Technical Proficiency

Financial analysts must have technical proficiency in accounting principles and technology tools. They should understand accounting systems, be able to read financial statements, and have a basic understanding of financial management.

Additionally, financial analysts leverage several technical tools to perform their jobs. Depending on the analyst's specific role, they may need to be proficient in different software, such as those for finance and database support. 

Certifications for Financial Analysts

Certifications demonstrate and validate expertise within a specific area of financial analysis. Financial analysts can pursue several different professional certifications. The most appropriate certification depends on your individual career goals within the industry and specific focus, such as investment management, corporate finance, financial modeling, risk management, personal wealth management, accounting, or financial reporting. 

Chartered Financial Analyst (CFA)

A CFA certification demonstrates expertise in investment management and financial analysis. CFA holders possess exceptional skills in financial analysis, market assessment, risk assessment, and strategic investment.

Certified Public Accountant (CPA)

CPA certification demonstrates competency in accounting. It provides the authority to perform a wide array of financial services, such as consulting, auditing, and tax preparation. State Boards of Accountancy grant CPA certifications to individuals who meet a variety of state-specific requirements, along with passing the Uniform CPA Exam. 

Financial Risk Manager (FRM)

FRM certification demonstrates expertise in identifying, analyzing, and reducing financial risks with respect to the market, credit, operations, or liquidity. 

Chartered Investment Counselor (CIC)

A CIC certification demonstrates advanced knowledge, expertise, and experience in portfolio management and investment counseling, while also committing certification holders to a strict code of professional conduct and ethics.

Steps to Become a Financial Analyst

Understanding what it takes to become a financial analyst and advance your career in the field will help you choose the right educational and experiential pathway to success.

Earn a Relevant Degree

Entry-level financial analyst roles typically have a minimum requirement of a bachelor’s degree in a related subject. However, research from the U.S. Bureau of Labor Statistics (BLS) shows that a master's degree is typically preferred or necessary for career advancement and more permanent positions in the field.

Build Key Skills

Financial analysts should build key skills by developing their foundational knowledge in accounting, corporate finance, and financial modeling in addition to acquiring proficiency with technical tools, such as Excel, Tableau, Power BI, and programming languages (like SQL and Python). 

Gain Experience Through Internships

Aspiring financial analysts can gain practical, real-world experience by participating in internships, independently taking on relevant projects, or volunteering to analyze their current employer's financial statements to practice applying their knowledge and skills within a real-world context. 

Consider Professional Certifications

Professional certifications strengthen a financial analyst's resumé by demonstrating expertise and skills with vetted credentials. Certifications also help financial analysts specialize in a specific area of expertise, enabling them to pursue more niche positions within the career field. Consider which area of financial analysis most appeals to you before working toward a professional certification. 

Network and Seek Mentorship

Building connections within the finance industry and corporate world can help aspiring financial analysts learn from the experiences of others through valuable mentorships while identifying opportunities through peer relationships. An estimated 50 percent to 80 percent of jobs are never publicly advertised. These positions are primarily filled with in-house employees or by word of mouth. Consequently, many job opportunities are exclusively accessible through a robust network and mentorship, both of which are invaluable assets in the job search.

Apply for Entry-Level Roles

While you might have a long list of credentials, real-life work experience is usually a non-negotiable resumé item for more advanced positions in the field. If you're just starting, start by applying for entry-level roles that provide the opportunity to gain years of experience while learning and continuing to build your professional network on the job. 

Job Outlook for Financial Analysts

The job outlook for any position can vary significantly depending on regional economics and individual experience and qualifications. However, according to the BLS, employment for financial analysts is projected to grow by 6 percent (faster than average across all occupations in the U.S.) between 2024 and 2034, with an estimated average of 29,900 job openings per year. 

Key Takeaways

• A financial analyst is a professional who guides individuals and businesses, helping them make data-driven decisions about leveraging their money for profit.
• They conduct research, gather data, organize data, analyze data, generate reports, and forecast to offer actionable insights to clients.
• Financial analysts can fill a variety of roles in different industries and sectors, serving both individual and commercial clients.
• Financial analysts rely on a combination of foundational knowledge, key technical skills, and soft skills to perform their duties successfully.
• Financial analysts can demonstrate their skills, strengthen their job prospects, and specialize in specific areas of financial analytics with a variety of professional certifications.
• The path to becoming a financial analyst begins with a formal education in a relevant subject, followed by gaining work experience, networking, and entry-level positions. 

Your Path to Becoming a Financial Analyst Could Begin With Champlain College Online

Whether you've just begun pursuing a financial analyst's career path or are looking to advance your career from an entry-level position, earning a master's degree in financial analytics could help you strengthen your resume while gaining valuable knowledge and technical skills and developing a variety of core competencies to support future career advancement. Champlain College Online offers a fully online master's degree in financial analytics with a flexible format designed especially for working professionals.

To learn more about how our online curriculum covers a comprehensive financial analytics background with a flexible format, we welcome you to contact our admissions office for more information today.