A financial analyst and personal financial advisor has the job of providing guidance to individuals or businesses who are interested in making investment decisions. They assess various investments including stocks, bonds, mutual funds, real estate investments, business investments and a myriad of other investments, and use this information to make decisions and recommendations to clients. They also use this information to determine the net worth of an individual or corporation. They work for insurance companies, banks and for financial planning firms. Many financial analysts work independently as personal advisors. Financial analysts are also called investment analysts and securities analysts.
Nearly all financial analysts hold a degree in finance or a related field. Check out the programs below which offer free information:
Job Responsibilities for Financial Analysts
Financial analysts and personal financial advisors can either work for the buyer of investments or for the seller of investments. For example, a company with a large amount of money to invest may hire a financial analyst to help them to develop an investment strategy for their money. A personal financial advisor is hired to do the same job for an individual or small business. Once the strategy is developed the analyst will then have the job of overseeing the investments and making changes as necessary in order to help the individual or company to gain even more money. Financial analysts on the selling side may be hired by a bank or other organization to help them to sell mutual funds, stocks, bonds and other types of investments to individuals and to corporations.
Financial analysts and advisors must stay on top of trends that have an impact on the investment industry. They must have a deep understanding of how certain political policies, economic trends and government regulations will affect the investment industry. If the analyst is developing an investment strategy for a corporation or individual, they must understand how to assess risks and must know how to protect funds and limit financial losses. This information must be kept in an investment portfolio.
Financial analyst also must know how to communicate effectively. Analysts must know how to present the information in the portfolio to managers, potential investors and to individuals with limited investing knowledge. Financial analysts also perform credit analysis for companies and individuals. Generally, an analyst will use statistical software in order to analyze the financial information that they find. This data is what is used to assess risks and this information is thoroughly studied prior to making an investment decision. This is the information used to determine if the company or individual should purchase, sell or hold an investment.
Training and Education Requirements
A wide range of skills are required for financial advisors. A bachelor’s degree is generally the minimum requirement for financial analyst or advisor. However, many positions require candidates to hold a Master’s Degree in Business Administration (MBA) or a master’s degree in business finance, statistics or accounting. Coursework is required in statistics, economics, accounting, corporate budgeting, bond evaluation and risk management for a financial analyst position.
A strong mathematical background is required as well as well as problem solving skills and strong communication skills. Successful candidates will also have the ability to work independently, must be self-motivated, be detail oriented and must also be familiar with money markets, foreign markets and tax laws.
Financial Analyst Salary and Wages
According to the Bureau of Labor and Statistics, the average starting salary for a financial analyst is $43,500. The median salary for a financial analyst is $73, 100, making this more than double the national median salary wage for jobs in the United States. The highest ten percent of financial analysts earn over $142,000 per year. Financial analysts also receive regular bonuses, which significantly increase these earnings. Financial analyst also have the knowledge and skills to invest on their own, which substantially increases their income.*
*According to the BLS, http://www.bls.gov/oco/
Certifications and License Requirements
Licensing is often required through the Financial Industry Regulatory Authority (FINRA) and is the organization that most companies use to license their financial analysts. FINRA offers many different types of licenses. The license required depends on the individual’s particular job. Most employers require new hires to obtain licensing through FINRA within a specific timeframe after they accept employment.
Certification for financial analysts can be obtained through the Chartered Financial Analyst (CFA) organization, but this certification is not required in order to secure employment. This certification is increasing in popularity among financial planners. In order to qualify for this certification, financial analysts must have a bachelor’s degree and four years of experience as a financial analyst or advisor. In order to receive this certification, there are a series of exams that an individual must pass. The exams cover economics, portfolio management, financial markets, securities analysis, accounting and a myriad of other topics that are related to the financial analyst industry. Many financial analysts and personal financial advisors with bachelors degrees choose to obtain this certification as an alternative to pursuing a master’s degree.
CFA is the largest association for investment professionals in the world. There are currently over 100,000 members of this organization. This is a global non profit organization that has the mission of promoting and developing those in the financial industry to the highest ethical, professional and educational standards.
CFA offers a wide range of career and educational resources. They offer a myriad of certifications as well. Market efficiency, investor protection, risk management, investment strategies and global marketing are just some of the courses offered. As CFA continues to increase in popularity, many employers are requiring their employees to obtain certification within this industry.
Association for Financial Analyst (AFA) is another professional association. This small group of professionals join together in order to network, share expertise and to connect with employers seeking employees within the financial industry.