Despite the somewhat vague title, financial analysts play a substantial role in today’s fast-paced business world. In addition to providing critical guidance to businesses and individuals making investment decisions, they also provide crucial insight and assessment regarding the performance of stocks, bonds and other types of investments.
Duties of a Financial Analyst
Financial analysts evaluate potential investment opportunities for companies and individual clients. They can be found working with banks, pension funds, mutual funds, securities firms, insurance companies and other businesses. Depending on where they work, financial analysts are also referred to as securities analysts and investment analysts.
The duties of a financial analyst typically include:
- Recommending the contents of financial portfolios, both individual investments as well as collections of investments
- Evaluating current and historical financial data and then applying those evaluations to find patterns that could inform investment strategies
- Studying economic and business trends of individual companies, sectors and entire financial markets
- Calculating the actual value of a business by careful examining financial statements
- Meeting with corporate officers to examine the company’s short-term and long-term prospects
- Assessing the strengths and weaknesses of the management team and making recommendations for ways to address deficiencies
- Preparing both formal and informal reports as requested by company leadership
Financial analysts are generally divided into two separate categories: buy-side and sell-side analysts.
As the titles indicate, analysts on the buy-side focus on developing investment strategies for companies with ample money to spend on investments. Commonly known as institutional investors, the label applies to hedge funds, insurance companies, money managers and large nonprofit organizations with endowments, including some colleges and universities.
By comparison, sell-side analysts work primarily with financial services sales agents who focus on selling stocks, bonds and other similar investments.
Furthermore, some analysts work exclusively for the business media or independent research houses and are therefore not considered part of either the buy or sell sides.
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Salary Information and Career Outlook
According to the Bureau of Labor Statistics (BLS), the median annual wage for a financial analyst is $84,300.
The long-term demands for financial analysts are aggressive, with a projected growth of 11 percent through 2026. This growth can be primarily attributed to several factors including the emergence of big data as a tool for financial analysis, as well as increased specialization and globalization within a wide range of sectors around the globe. Barring a global economic collapse, the demand for financial analysts will remain firm on both the buy side and the sell side.
A majority of financial analyst positions require a bachelor’s degree, but additional education such as an MBA can increase the odds of advancing to leadership positions down the road. Specific academic disciplines that compliment a career as a financial analyst include accounting, economics, probability and statistics, finance and applied mathematics.
The Accreditation Council for Business Schools and Programs (ACBSP) has accredited St. Ambrose University’s MBA program for its focus on quality teaching and exceptional student preparedness. Our accredited online MBA program builds the skills you need to advance in the real world. We offer an accelerated format featuring eight-week classes, allowing full-time students to earn their degree in as few as 14 months.