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Degrees and Schools
Bachelor's degree programs in accounting, finance, business, economics or statistics provide the minimum level of education for financial analysts. Master's degree programs in business administration provide an MBA degree, which most employers expect. These programs are readily available through most four-year colleges and universities.
Coursework
Students preparing to work in this field take courses in:
- Business
- Statistics
- Economics
- Financial analysis methods
- Accounting policies and procedures
- Corporate budgeting
- Bond valuation
- Options pricing
- Risk management
Online Classes and Programs
Online bachelor degree programs in accounting, business, economics, finance, or statistics are available in abundance. While some are offered by Web-based schools, most are offered by universities and colleges with campuses. Online courses should be part of an institution with accreditation from agencies approved by the Council for Higher Education Accreditation (CHEA) or United States Department of Education (USDE). Additionally, in order to be accepted into master's degree programs, students of online bachelor's programs should make sure a school's accreditation is acceptable for entrance into targeted graduate programs.
Requirements for Being Hired
Financial analysts are expected to have a minimum of a bachelor's degree, and most employers prefer candidates who have an MBA. Employers sponsor licensure through the Financial Industry Regulatory Authority (FINRA) for employees depending on their role, so a license is not required for some positions. Candidates who have previous work experience in the field, and are therefore licensed, are preferred.
Certification as a Chartered Financial Analyst (CFA) through the CFA Institute, though not required, can provide a competitive advantage. Applicants must have a bachelor's degree, and at least four years of work experience that is related, in order to take the three exams. Additional certifications are available in specific focus areas such as risk management.
How to Evaluate Schools
Future financial analysts should consider asking these questions when comparing degree programs:
- Courses - Does the program offer a diverse array of courses that support areas of interest? Is there a substantial offering of both finance and business courses? How difficult are courses to get into?
- Location - Is the school in a city that is a major financial center, such as Charlotte, NC or New York City? What kinds of internship, shadow, and job placement programs are coordinated with area businesses?
- Tuition and financial assistance - Does the school offer substantial resources for finding scholarships, student loans, grants and work study opportunities?
- Accreditation - Is the program affiliated with or part of a USDE or CHEA accredited school?
Financial Analyst Job Description
Financial analysts assess financial conditions, and advise leaders of organizations and individual patrons on investment decisions. They may also be called securities analysts or investment analysts, and they often work for banks, securities firms, mutual and pension funds, insurance companies, and the media.
Typical responsibilities include:
- Assessing the performance of investments such as stocks, commodities and bonds
- Identifying potential financial risks that come with specific investment decisions, and making recommendations to buy, sell, or hold
- Following trends that impact a specific industry, type of product, or region (e.g. an area such as Latin America, the utilities industry, or the options market)
- Studying new policies, regulations, and political and economic happenings to identify ways these trends may impact specific investments
- Determining a company's value by projecting future earnings based on past and current sales, expenses, prices, and tax rates
- Interviewing company management to gain deeper insight into the organization's prospects
- Analyzing financial data, creating portfolios, and forecasting using spreadsheets and statistical analysis software
- Performing reviews of financial statements, budgets, credit, and costs
There are different kinds of financial analysts, including:
- Buy side analysts devise investment strategies for institutional investors that have a great deal of money to invest. These companies are usually insurance companies, hedge funds, mutual funds, nonprofit organizations with sizeable endowments, and independent money managers.
- Sell side analysts assist banks and other securities dealers in selling investments such as stocks and bonds.
- Ratings analysts determine the likelihood of businesses or government entities to default on bonds and other debts.
- Portfolio managers oversee the work of analysts as they put together a company's investment portfolio, which includes a mix of industries, products, and regions.
- Fund managers are portfolio managers who work with hedge and mutual funds. In addition to choosing what investments to buy or sell, they explain their strategies to investors.
- Risk analysts look at portfolios for potential losses, and try to mitigate risk using investment strategies such as diversification, short selling, derivatives, and currency futures.
Financial analysts often work long days -- answering phones and attending meetings during the day, and researching at night. Most travel frequently to meet with clients and affiliates.
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