How to Become a Financial Analyst

If you’ve considered a career in financial analysis, you may wonder about what it entails, what your career prospects may be, and how to break into the field. Financial analysts assess financial data for individuals or businesses and recommend how they can become more profitable. The United States Bureau of Labor Statistics expects this field to grow by nine percent between 2023 and 2033.¹

Like other career fields, financial analysis is being shaped by technological advances. As a financial analyst, you will have access to artificial intelligence (AI) and machine learning to help guide your insights.² You must also be familiar with financial technologies such as blockchain, cryptocurrency, and other solutions in the ever-growing digital world of finance.

As new trends and technologies continue to emerge, it’s important that you keep your skills fresh to stay competitive in the job market. If you like crunching numbers and helping companies or individuals reach their potential, this may be the right field for you. This article will explore how to get started in financial analytics.

Your career as a financial analyst may vary based on your clientele and your areas of expertise. In any position, your role will involve analyzing data and making projections to guide how businesses and individuals manage and invest their money. You will take complex financial information and simplify it to help key decision-makers understand the data and use it to make decisions.

Your job will consist of gathering information, analyzing data, organizing information, visualizing data, identifying trends, and making expert recommendations.

As a sell-side analyst, you’ll likely work for an investment bank or brokerage firm, providing recommendations on whether to buy or sell stocks.³ Alternately, you may pursue a career as a buy-side analyst for a company that invests money on behalf of clients, such as a mutual fund or a hedge fund.⁴ Some financial analysts work for corporations or for governmental agencies analyzing budgets, forecasting revenues and expenditures, and making recommendations on how to manage money.⁵

Artificial intelligence is changing the landscape of financial analysis. Because AI-powered applications can process large volumes of data in a short time, they can augment your knowledge as a financial analyst. With more robust datasets, you can better identify trends and patterns to make predictions and recommendations.⁶

Some financial institutions are using big data to help them analyze financial markets, assess stock performance over longer periods, and even determine whether to offer credit to a person or a business.

Big data also lets you analyze financials alongside other aspects of your company, such as marketing and sales. You can use predictive analysis to evaluate future customer behavior based on past trends. This data can help you plan sales and marketing budgets, manage inventory levels, and develop strategies to meet customer needs in a fiscally responsible way.⁷

This new way to use data also guides how businesses manage their assets and operations. Governmental agencies and financial agencies are using AI and machine learning to assess regulatory compliance and look for fraudulent transactions.

AI and machine learning tools will save you from manually entering financial data into multiple computer systems to generate reports and analyze data. Since they can compare data from multiple sources, you will have more information on which to base your predictions and recommendations.

Whether you begin in the field while you’re still working toward your master’s degree or choose to wait until after you’ve graduated, your first step toward becoming a financial analyst will be in an entry-level position. This field is in high demand, so you’ll find ample opportunities for career advancement.

You may start out as a financial intern while you’re in school.⁸ As an intern, you may analyze accounting data, compile reports, and assist financial analysts and others in the department. If you don’t complete an internship during school, you’ll still be eligible for entry-level positions as an accountant or financial analyst.

Depending on whether you want to work on the buy-side, the sell-side, or for a company or government agency, your duties will differ. If you’re interested in working with individual clients, you may start by analyzing stocks, bonds, and securities.⁹ If you’re working for a corporation, you will start out assessing internal financial information and assisting with financial plans and recommendations.

After gaining experience, you could be promoted to a senior analyst position, or you could work as a portfolio or a fund manager. You might find yourself working as a financial project manager, overseeing analysis for various company initiatives. These projects entail anything from overall financial planning to new product development.¹⁰

Once you’ve proven yourself in a senior role, you may be promoted to manager of a department to director, and perhaps eventually to chief financial officer (CFO) for a company. A CFO is often the second highest position in an organization, behind the chief executive officer.¹¹ As a CFO, you would handle every aspect of a company’s finances, using data from your accounting and finance department to make strategic recommendations, develop budgets, and guide processes. You would be responsible for quality control and business planning, and play a key role in your company’s decisions.

Knowing what a financial analyst does is key to developing your skills to land a job and become successful. You will need at least a bachelor’s degree for most entry-level positions.¹ If you’re interested in this field, plan on majoring in economics, finance, statistics, or business administration.

Earning a master’s degree in finance and analytics, accounting, economics, or a related field can help you move up the career ladder faster than simply working your way through an entry-level job and hoping for a promotion.¹² A strong master’s program deepens your knowledge of financial analysis, modeling, forecasting, and predictive analytics. It also helps you develop the soft skills you will need to thrive in management roles.

As a manager, you need excellent communication and problem-solving skills. You also need to know how to collaborate and present your ideas. During your master’s degree program, you will collaborate with other students, developing your leadership skills and business acumen. If you take advantage of internships, you can learn adaptability and critical thinking skills, and make valuable connections, in a real work environment.

In addition to crucial soft skills, you’ll need to be proficient in data analysis, financial technology (FinTech), and financial modeling, with outstanding attention to detail. Financial analysis often puts you in high-pressure situations, so you’ll have to be resilient. You should be able to handle pressure and adapt quickly to change.

Completing your master’s degree will make you a desirable candidate, but finance is a dynamic industry. You need to stay on top of industry trends, regulatory changes, and other developments in the field. Depending on your position, you may also improve your job prospects with a professional certification.¹³

If you’re working for a brokerage or investment firm, becoming a certified financial planner (CFP) or a chartered financial analyst (CFA) can help you show your clients that you’re credible and knowledgeable enough to be trusted with their money. You could also earn designation as a certified management accountant (CMA), a certified public accountant (CPA), or a financial risk manager (FRM), depending on your field of expertise. To gain each of these certifications, you need to pass a test demonstrating your knowledge of various financial topics and regulations.

Depending on your role, you may also need a license, such as a Series 7 or Series 63 for stockbrokers.¹⁴ The licensing process usually involves a series of classes and tests confirming your expertise.

Earning a certification in data science strengthens your understanding of programming languages, machine learning and AI, and other technological developments in the financial sector. Earning this certification can position you for emerging positions in financial analysis, or simply shone your expertise with the tools you’ll be working with every day.

Once you’ve started your career, consider joining a professional organization, such as the National Association of Personal Financial Advisors or the Certified Financial Planner Board of Standards. These organizations offer excellent networking opportunities and continuing education. As financial rules and regulations shift, you will be notified of available classes that will help you keep your skills up to date.

Organizations such as the Global Association of Risk Professionals (GARP) specialize in risk in multiple areas of business, including finance. This organization helps you stay on top of real-world situations that could affect your company’s profitability. It also offers opportunities to learn about sustainability and technological risks that might influence financial performance.¹¹

Finance is a competitive field. Through working with a professional mentor, you can identify and develop your key strengths as a financial analyst, assess your weaknesses, and fix them. The right mentor can help you navigate your career progression and deal with career politics.¹⁵

Mentorship goes beyond your role as a financial analyst. Learning from seasoned professionals helps you manage your work-life balance and other challenging aspects of a job. Your mentor might recommend solutions for boosting your confidence and perfecting your ability to negotiate. Being new in any field can be intimidating, but having a skilled mentor helps you learn how to trust yourself and your ideas. Mentorship also helps you see new perspectives on your responsibilities or your industry as a whole. A good mentor will suggest organizations you can join and other resources that will improve your personal development.

Networking is also important in the financial industry. If you’re working for an investment bank or brokerage, networking helps you build your roster of potential clients. Networking with other professionals in the business helps you understand new developments in your industry. New financial regulations regularly emerge in response to developing national and global events, and you need to stay on top of them. Attending classes and networking events connects you to the people who can help you understand how these changes affect your clients and your job.

Strengthening your network also helps you find new career opportunities while you sharpen your knowledge. Even if you’re not looking for a new job, your network provides the social and emotional support you need to cope in a high-pressure environment.

Make your professional goals your reality. Led by expert faculty, the Online Master of Science in Finance and Analytics (MSFA) program in the Leavey School of Business at Santa Clara University will teach you to develop sophisticated financial models and strengthen your analytical skills. The robust curriculum features career-focused courses including Econometrics, Corporate Finance and Financial Analysis, Fintech, and Financial Engineering.

With two starting dates each year, the Online MSFA program fits your scheduling needs. You can complete the program in as little as a year while gaining the dedicated attention, expanded network, and career support you need to succeed.

Start moving your career ahead today. Schedule a call with one of our admissions outreach advisors.