A lot of people think that financial analysts are those who make decisions when it comes to investments and other similar major financial decisions companies have to make. They are not the ones who are solely responsible for those decisions, but they are certainly key players in the process.
They are the ones who have knowledge about the market and the economy, and through this knowledge, they conduct valuable financial research and supply suggestions based on which decisions can be made. This is an important role that holds a lot of responsibilities, especially because financial analysts generate reports that need to represent the current financial situation truthfully and make predictions about the future in a similar fashion.
1. Getting the necessary education
In order to land a financial analyst job, you will need to get a diploma in a field related to this job position. Nobody will ever give someone to manage important financial tasks and depend on their decisions unless they have proper education. Some of these fields include accounting, statistics, business administration, finance, or even mathematics.
Getting a degree in any of these fields will immediately open the door to this career path. However, if you’ve already finished college and you want to get into this field, you will have to make an extra effort to accomplish this. It’s not impossible, but it will be quite challenging. It would be awesome if you had an MBA, however, you will still have to get valuable lessons in order to have what it takes.
If you have a bit of knowledge in accounting and finance but you are not too confident in them, you should consider getting some related certifications in order to be able to impress people and get to the big positions you are going for. These certification can give you important credentials and some essential knowledge you will need to land a corporate gig without a business degree.
You need to have at least a bachelor’s degree and at least three years of experience in a related field in order to become interesting to companies.
2. Knowing what the job is about and meeting all the requirements
Even if you have what it takes, you still don’t have a guarantee that you will get the job. All that education and experience still don’t mean that you have what it takes to do this job and know how to handle all of the tasks you will have to do constantly. Nobody will hire a half-able employee who doesn’t understand their job position completely and all the things that go along with it, especially for a high profile role such as financial analyst.
Like I mentioned before, financial analysts need great accounting knowledge and the ability to collect valuable facts and numbers in order to explore old financial data, make important predictions for future results, while at the same time encouraging improvements in the form of policies and processes. Here are all the daily tasks and responsibilities that come with the financial analyst position:
- Gathering and analyzing past and current data;
- Coming up with valuable forecasts and reports based on the previous financial analysis;
- Going through the current capital spendings and determining the current value of a company;
- Coming up with new investment options;
- Creating and evaluating new profit plans;
- Recognizing trends around financial results and giving suggestions on how to improve them;
- Working together with members of the whole finance team to come up with accurate analytics and forecasts;
- Coming up with forecasts and stable financial models.
3. Comprehending modern technology
Technology is a vital area in the lives of financial analysts. People who are looking to be successful in this field need to be tech savvy, given the fact that using technology will make their jobs a lot easier. There are a lot of systems, platforms and tools analysts rely on to do their jobs.
ERP systems (enterprise resource planning) are here for obvious reasons – they help them accurately delegate resources and create plans for the future.
Another tech skill which has simply exploded in the past couple of years is handling big data, as all serious companies have realized just how important data-based decisions are and that they can give a lot better results than decisions driven by intuition.
The implementation of accounting software handling big data has made accounting tasks much easier and a lot of processes have almost completely been automatized, including transactions, keeping track of receipts, etc. Driven by big data, these operations are done with better accuracy and these tools also allow financial analysts to perform complex trend analysis and audits.
By learning how to rely on big data and use tools to handle it the way they see fit, financial analysts can bring more accurate predictions, current results, and they can suggest more realistic courses of action that can further improve the end results.
4. Beating modern technology
One of the recently emerging issues for all people who want to become financial advisors or financial analysts is the appearance of new technologies that threaten their field. In the past, people and businesses that wanted advice on how to invest their big capital were limited to people who were financial analysts. However, new software solutions called Robo-Advisors which can supposedly do this instead of a person has raised a couple of eyebrows.
These Robo-Advisors are tools which give the user the ability to perform automated investments. Believe it or not, these tools were able to push a lot of financial advisors out of the business. Many people are viewing this as a good thing for the market. One other thing that these tools can do is that they have the ability to allocate assets and set goals and this is something a lot of people and companies need, especially those that don’t have a clue where.
This has created a lot of competition for all people who are looking to break through into this field and make it their career. Older and more experienced analysts are not as threatened by this new approach because of the fact that these tools are still not perfected and they cannot really automate everything. They still need humans who have some experience and knowledge in the field to use them the right way.
Additionally, the results they give are not that accurate and there is still the human factor. However, for younger unestablished professionals in this field, these tools are a great problem. You need to be able to prove your worth and get some great results you can show to potential employers and this is why working hard for a long time is necessary.
5. Other characteristics which are preferable to become an analyst
We talked about the skills which you will need and the tasks that you will have to know in order to become a financial analyst but the story doesn’t end there. Just like for any other job, there are skills you need to have in order to get it, but there various characteristics a person must have to make themselves more desirable by the companies they are applying for.
Some of these things are simply personality traits, and other factors are within the attitude a person has towards this job. These things will help people do their jobs more easily and in a better way. Being a financial analyst is not an easy job, even if you have all the skills necessary. It’s an exhausting position where you must constantly push yourself to the limits and not all people can handle it.
It’s very important that you enjoy what you do when you are a financial analyst, as you will find it easier to motivate yourself to keep moving forward and maintain a positive attitude towards the job. This will lead you towards a successful career path that can stretch out for years to come. Here are some of the characteristics which are good to have in this line of work:
- A constant interest in various industries and analyzing their results in order to gather knowledge that can help investors do better in the future;
- High standards in ethics;
- Professional responsibility;
- The ambition to go far in your career and have a lucrative position in a company;
- Taking pleasure in collecting information while applying important methodical rules;
- Taking pleasure in working together with other people and pointing them in the right direction to achieve the best results possible;
- The ability to work long hours and handle large amounts of stress;
- Being a workaholic and sacrificing some of your personal life for the sake of your career;
- Commitment and patience and training before actually becoming a professional financial analyst.
A financial analyst is a high-profile job position and it doesn’t come easily. You will have to invest yourself completely and dedicate several years in order to become eligible for such a job. However, once you get it, you will definitely have a lucrative salary and a lot of power, with the possibility of going far in your career. Don’t make it your career choice unless you are passionate about it and ambitious to make a lot of sacrifices in order to get what you want.