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How to Become a Financial Analyst

Bachelor's degree

Financial analysts are responsible for processing a variety of information in regards to finding profitable investments. They require a minimum of a bachelor's degree and advanced positions commonly require a master's degree.

Education & Training

The majority of positions look for a bachelor's degree. Numerous areas of study provide related preparation including: finance, engineering, accounting, mathematics, statistics and economics. Employers may request a master's degree in finance or an MBA or master's in business administration for advanced positions. Knowledge of risk management, bond valuation and options pricing are vital.

Licenses, Certifications, and Registrations

The FINRA or Financial Industry Regulatory Authority forms the top licensing organization within the securities industry. This agency requires licenses for numerous financial analyst positions. The majority of the licenses require employer sponsorship; therefore, companies do not expect individuals to have these licenses prior to starting work.

Employers often recommend certification as it can dramatically improve one's advancement opportunities. The CFA or Chartered Financial Analyst certification is from the CFA Institute. This designation can be earned by financial analysts if they have their bachelor's degree, pass 3 exams and have 4 years of experience. Another option is for financial analysts to become certified in their specialty field.

Skills and Qualities that will Help

Analytical Skills: Financial analysts need to process a wide range of information regarding locating profitable investments.

Communication Skills: Financial analysts need to explain their recommendations to clients in a clear way that can be understood.

Computer Skills: It is necessary that financial analysts be adept at utilizing various software packages to see trends, predict forecasts, create portfolios and analyze financial data.

Decision-Making Skills: Financial analysts need to provide a recommendation to purchase, sell or hold a security. Fund managers are required to make split-second decisions regarding trading.

Detail Oriented: It is necessary that financial analysts pay attention to details when reviewing potential investments since tiny issues may lead to heavy implications regarding an investment's overall health.

Math Skills: It is necessary for financial analysts to utilize mathematical skills in order to estimate financial security values.

How To Advance

Typically, financial analysts begin by specializing in a certain investment field. Once experience is gained, they can supervise analyst teams and choose the investment mix for the company's portfolio. This position is known as portfolio manager. They may wish to become fund managers; those who manage large investment portfolios for individual investors. An analyst can improve their chances of advancing to one of these jobs by obtaining their master's degree in business administration or finance.