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How to Become a Financial Analyst

A financial analyst plays a critical role in helping individuals and organizations identify business opportunities and make investment decisions. If you have a passion for solving problems, analyzing economic trends, and making data-driven decisions, then read this guide to learn how to become a financial analyst.

As one of the most coveted careers in the competitive financial industry, breaking into the field and landing a job as a financial analyst can be challenging. If you’re interested in how to become a financial analyst but unsure of the educational path, career opportunities, and relevant skills, this guide can help you get started.

What Is a Financial Analyst?

In general, financial analysts, also known as investment analysts, are professionals who are responsible for collecting, monitoring, and examining economic and business trends and financial data for companies.

These experts use their findings to offer forecasts, recommendations, advice, and warnings to help companies in a wide range of fields. Financial analysts can work for banks, investment firms, insurance companies, pension funds, stock brokerages, and many other institutions. A financial analyst ensures that the funds of an organization will be used for lucrative opportunities.

Financial Analyst Job Description

The job description of a financial analyst typically varies depending on the company. They have a variety of roles and responsibilities, which often revolve around guiding companies and individuals in decisions about spending funds to gain profit.

On an average day, a financial analyst would analyze economic and business trends and evaluate current and historical financial data. They study the company’s financial statements and assess the management team’s strengths and weaknesses. Financial analysts also recommend an investment portfolio or a collection of stocks, bonds, or mutual funds to their clients or employer.

Financial Analyst Salary and Job Outlook

According to the Bureau of Labor Statistics, the annual median wage for a financial analyst was $83,660 in May 2020. However, the salary varies depending on the industry. According to the same data, those employed in financial investment sectors have a median salary of $98,850, while financial professionals handling credit intermediation have a median salary of $79,270.

Employment-wise, the Bureau of Labor Statistics predicts that financial analyst positions will have a good growth outlook. They expect this career in finance to grow by five percent between 2019 to 2029, faster than the average.

Top Reasons to Become a Financial Analyst in 2021

The COVID-19 pandemic disrupted the global economy and financial market in the first quarter of 2020 and subsequent recovery reported by Statista has been uneven. The current state of the finance industry has highlighted the need for financial analysts, making now a good time to enter the field. Below are some further benefits to becoming a financial analyst.

  • These skills are in high demand. Since businesses need to manage their finances wisely this year, their interest in professionals with financial analysis skills and experience is on the rise.
  • They earn good money. According to the May 2020 data from BLS, you can earn as much as $159,560 as a financial analyst.
  • There’s a pool of opportunities. The career opportunities for a financial analyst are vast. There are a variety of job titles, career paths, and even sectors where you can find work.
  • This industry is expected to have stable growth. Despite the fears of an economic crisis, the finance field shows steady growth. There are new financial products constantly appearing that require analysis.

Financial Analyst Job Requirements

A financial analyst has a crucial role and responsibility within a firm. They deal with large amounts of data and ensure the company generates revenue from business and investment decisions. Since financial analysts play a critical part in the finances of their potential employer, most companies set several requirements for someone to be considered for the position.

  • You must have a bachelor’s degree. At a minimum, a financial analyst must hold a Bachelor’s Degree in Finance or a similar field.
  • You need strong analysis, decision-making, and communication skills. Since day-to-day activities include calculating numbers and reporting your findings, it’s crucial to have this set of skills.
  • You will need passing scores on the CFA Institute exams. Your future employer may require you to have certification from the Chartered Financial Analyst Institute for certain positions.
  • You should gain relevant work experience. Although it’s not required by all companies, building on-the-job experience in finance, accounting, or economics will give you an advantage when pursuing roles in this field.

Types of Financial Analyst Careers

The career paths available for financial analysts are vast. These experts can work in different sectors, including government regulatory agencies, banks, insurance firms, security firms, and other businesses. But under these financial sectors, there are three major categories of financial analyst careers.

Buy-side Analysts

Buy-side analysts make up the majority of the professionals in the finance sector. Although they rarely have the final say, they help companies make decisions on how to spend their money by developing investment strategies. They often work for institutional investors, including hedge funds, mutual funds, and pension funds.

Sell-side Analysts

Instead of working for institutional investors, a sell-side analyst works for a brokerage firm that manages individual accounts. These professionals offer guidance and advice to financial services agents who issue, sell, or trade stocks, bonds, and other investments.

Investment Banking and Equity Analysts

Equity analysts are finance professionals who help big banks make buy and sell decisions and locate promising initial public offering (IPO) opportunities. They usually focus on finding companies that offer the most lucrative opportunities for ownership.

Financial Analyst Meaning: What Does a Financial Analyst Do?

The duties and responsibilities of a financial analyst will depend on their future employer or the organization they work for, their industry, and seniority. Here is a list of the most common duties of a financial analyst.

Gathers Data and Information

A financial analyst’s job begins with data and information gathering. They examine and study financial records, company ledgers, stock price information, and data from government agencies.

Makes Forecasts and Projections

After analyzing the data and information, financial analysts make forecasts and projections on how the company will perform in the future. They will use methods like regression analysis and year-over-year growth rates to create financial predictions.

Develops Recommendations

A good financial analyst develops recommendations and insights that can help improve business operations. They may generate ways to cut costs, increase market shares, grow revenue, or improve operational efficiencies.

Essential Financial Analyst Skills

Aside from obtaining a degree in an appropriate field of study, a person must also possess a wide range of technical and soft skills to become a financial analyst. Here are some essential skills to develop if you’re set on your journey to becoming a financial analyst.

Math Skills

If you’re going for a finance career, then you should expect to work with tons of numbers and formulas. Financial analysts need strong mathematical skills to perform complex equations and determine the value of financial securities and investments.

Analytical Skills

A financial analyst’s analytical skills will enable them to assess the gathered data and information and examine structures and systems to identify profitable investments for their company.

Communication Skills

Strong communication and presentation skills are also crucial in this field since financial analysts have to report and explain their work to their clients. They will need to be able to share the results of their analysis so that those without a financial background can understand them.

How Long Does It Take to Become a Financial Analyst?

It will take you at least four years to become a financial analyst because you have to start by gaining a bachelor’s degree. This timeline is possible if you find a company that hires recent graduates for entry-level financial analyst positions.

However, if you’re aiming for executive or senior-level financial analysts roles, you’ll have to build your resume for the position. That includes completing a master’s degree, developing relevant skills, and gaining relevant work experience, which could take you at least two additional years.

Can a Coding Bootcamp Help Me Become a Financial Analyst?

Yes, a coding bootcamp can help you become a financial analyst. These intensive programs can help you learn all the essential knowledge and relevant skills necessary to start a career in this field.

Many bootcamps offer specialized courses and certifications for data analysis, financial modeling, and financial planning. Since these coding bootcamps only take a few months to a year to complete, it’s a good alternative for traditional education if you are looking for an entry-level job.

Can I Become A Financial Analyst From Home?

Yes, independent analysts can base their financial services at home as long as they maintain a level of professionalism with their practices. However, if you’re under a company or institution, a work-from-home option will depend on the industry or sector where you work. You can also gain the necessary education for this field through online degree programs.

How to Become a Financial Analyst: A Step-by-Step Guide

Now that you have a solid grasp of the job description, salary and employment outlook, and qualifications, here are the steps to become a financial analyst. While the career path for financial analysts in different sectors may vary slightly, the essential steps will stay consistent.

Step 1: Complete a bachelor’s degree

Earning a bachelor’s degree is the main educational requirement for many companies. An ideal path for a financial analyst would be a degree in finance, math, statistics, accounting, economics, business, or related math-heavy fields.

Step 2: Gain relevant skills, licensing, and certifications

Opportunities like internships are a great way of gaining hands-on experience and building your resume. Attaining a license and certification can also improve your chances of landing the job and advancing in your career.

Step 3: Find a job

Once you’ve checked the qualifications for the level of education, skills, and experience, you can pursue job openings for financial analysts. Whether you’re looking for a junior analyst position or senior analyst role, be sure to read the job description carefully and ensure your resume matches the requirements.

Best Schools and Education for a Financial Analyst Career

The first step to achieve your dream of becoming a financial analyst is to get the right education. Most companies will require you to have a bachelor’s degree for entry-level jobs, but some also accept candidates with certifications and graduates of bootcamps. If you want to increase your chances of landing your dream role, here are the best schools and education options for this career.

Financial Analyst Bootcamps

Financial analyst bootcamp graduates can learn the essential knowledge and skills taught in traditional schools for a fraction of the cost and time investment. Bootcamps provide intensive training on specialized courses that run for several months to a year. For a career in financial analysis, consider enrolling in one of the best data science bootcamps.

Vocational School

Vocational or technical schools are also a great alternative to the traditional four-year academic path. Most of these institutions offer programs that take less than two years to complete. You can gain relevant skills required for an entry-level position in less time.

It’s best to choose vocational schools that offer certificates in finance or related fields. Many vocational programs also provide hands-on training, which can give you an advantage when searching for a job.

Community College

Another option that offers cheaper and short-term financial analysis undergraduate programs is a community college. Community colleges can help you earn a two-year associate degree in finance, data science, or a related field.

After you acquire an associate degree, you can transfer your credits to a university afterward to earn a bachelor’s. You can also enroll in bootcamps or online courses to earn additional relevant experience.

Financial Analyst Degrees

Even though the demand for financial analysts is growing, the job market is still highly competitive. As mentioned before, most employers require candidates to have at least a bachelor’s degree for an entry-level position. If you want to get ahead of your competitors in the job market, consider getting a bachelor’s in finance, economics, or statistics at a prestigious university.

The University of Pennsylvania, University of California - Berkeley, and Massachusetts Institute of Technology are some of the names you should consider. If you want to land an executive or senior-level role or advance in your career in the future, completing a master’s degree can help you reach that point faster.

The Most Important Financial Analyst Certificates

If you wish to open up opportunities for career advancements in this field, you should consider earning several certifications and completing additional training programs. In some financial analyst job opportunities, you will be working to sell financial products. The Financial Industry Regulatory Authority will require you to be certified in this situation.

Chartered Financial Analyst (CFA)

One of the most common credentials financial analysts can earn is the CFA Institute’s Chartered Financial Analyst certification. It’s ideal for those who work in institutional money management and stock analysis.

Certified Government Financial Manager (CGFM)

You will need a CGFM certificate if you’re aiming for a career as a local, state, or federal financial analyst. To earn this professional certification offered by AGA, you will need to complete a bachelor’s degree, build at least two years of professional experience, and pass three CGFM exams.

Certified Public Accountant (CPA)

Those who want financial generalists duties can benefit from earning the Certified Public Accountant credential. Every state has its education and experience prerequisites, so be sure to check the details of the state where you want to practice.

How to Prepare for Your Financial Analyst Job Interview

One way to impress your future employer during the interview process is to show your expertise in the field and confidence in your work. To do this, you should craft and deliver an excellent response to their questions. Practicing ahead is the best way to prepare you for this situation. Listed below are some sample questions to help you practice.

Financial Analyst Job Interview Practice Questions

  • Why do you want to be a financial analyst?
  • What tools and software programs have you utilized in your career?
  • What financial methodologies are you familiar with for conducting an analysis?
  • Have you ever encountered inconsistencies in a company's finances? How did you address this situation?

Should I Become a Financial Analyst in 2021?

Yes, you should become a financial analyst in 2021. Because of the current state of the financial market, many businesses are looking for qualified professionals who can provide financial analysis services.. BLS predicts strong employment growth for the next decade, so you can rest easy knowing you’ll have a steady career.


Can you become a financial analyst without a degree?
Yes, you can become a financial analyst without an associate, bachelor’s, or master’s degree. As long as you have relevant knowledge, skills, and experience, some companies will hire you for entry-level positions. Bootcamps are a great education option for those who do not wish to pursue an advanced degree.
Is it hard to become a financial analyst?
Yes, It can be hard to become a financial analyst since you will need to build and earn a variety of skills, experience, and knowledge. However, if you have a head for numbers and enjoy analyzing data and information, then you’ll love the challenge this career offers.
How do I become a financial analyst with no experience?
To become a financial analyst without experience, you will need to do as much networking as possible to open doors for your career. Starting and maintaining a finance blog is also a good strategy to showcase your expertise and catch the attention of some employers.
Are financial analysts rich?
Yes, financial analysts earn high salaries. According to the Bureau of Labor Statistics, a financial analyst can earn an average salary of $83,660 per year, with some individuals earning more than $159,560 annually.
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