Being a financial analyst is one of the most popular career paths in finance. This is largely because analysts can work in a range of industries and also because the field has some great benefits, including a high earning potential. If you’re a business or finance major, a financial analyst role is definitely worth considering. Even if you’re not currently majoring in a related discipline, you might be interested in finding out more about this role and deciding whether it could be a good fit for you.

Here are some of the key things you need to know about being a financial analyst.

What is a financial analyst?

A financial analyst is someone who makes business recommendations for an organization based on analyses they carry out on factors like market trends, the financial status of a company (or companies) and the predicted outcomes of a certain type of deal. Analysts typically have academic backgrounds as business, finance or accounting majors and are numbers-driven individuals who are comfortable interpreting data and making recommendations based on that data.

What do financial analysts do?

Financial analysts are primarily responsible for creating financial models that can predict the outcome of certain business decisions. In order to do this properly, they need to aggregate a large amount of financial data while also taking in account factors like financial market trends and past transactions of a similar nature. Because the role can be quite different depending on where an analyst works — for example an analyst at an investment bank will be much more focused on assisting with deals and mergers that one working for an insurance company — the industry an analyst chooses to go into defines their day-to-day responsibilities. Overall however, analysts play a significant part in providing decision-makers with the information they need to increase revenue and manage assets successfully.

What are the challenges of being a financial analyst?

Finance is a very data-driven industry and one of the challenges of working as an analyst in being able to analyze and interpret financial statements, market trends and microeconomic conditions in order to offer recommendations on potential business deals and decisions. In addition to the technical challenges involved in aggregating and interpreting this complex data, one of the other challenges analysts face is the fast pace of the finance industry. Fortunately, by knowing what to expect and getting the right training, these challenges can be overcome.

What are the benefits of being a financial analyst?

Although working as a financial analyst does present some challenges, it’s also a career path filled with opportunities, particularly when it comes to having your pick of industries. This is because financial analysts play a necessary part in almost every area of business so whether you’re passionate about music or interested in technology, you’re likely to find an opportunity that’s right for you. In addition to having flexibility when it comes to industries, you’ll be playing a crucial role in pulling together the information required to make these decisions and to develop new strategies. In addition to learning new skills like how to create models in Excel and participating in exciting business processes, being an analyst will also offer you the opportunity to develop a strong professional network, an asset which you can continue to nurture throughout your career.

What is a typical financial analyst salary?

Entry-level financial analyst salaries start at $55,500 (including bonuses and commission). For analysts working in investment banking and asset management, starting salaries can be much higher, typically between $100-$125,000. Irrespective of what field you choose to go into, being a financial analyst is a lucrative career with more senior analysts earning anywhere from $90,000 to $150,000.

Although being a financial analyst comes with certain challenges, it’s also a great opportunity to work in an exciting field and play a key role in the decision-making processes of an organization. If being a financial analyst sounds like it might be for you, consider taking on a summer internship and getting a hands-on feel for the position.

Next, get more career tips for internships and entry-level jobs such as the Top 10 Things You Should Look For in a Company and find answers to common interview questions such as Are You Willing to Travel?

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Are you intrigued by the mathematics or statistics courses that you’ve taken in the past? Do you feel like you solve problems in creative ways, with a numbers-driven approach? Would you be interested in helping companies plan for how to grow their revenue or maintain profitability in both the short and long term? If so, a finance major might just be for you.

What is a finance major?

Financial planning, investment decisions and analyzing/limiting expenses are all various aspects of what you can and will learn as a finance major. As a finance major, you will study how companies have performed in the past to predict how they will perform in the future, and learn how to communicate information that will drive strategic changes. Many of your assignments will be project driven, whether they be individual case studies to enhance your problem-solving ability, or group presentations to practice the way you interact with others. Typical classes in this major include accounting, economics, math and psychology.

Is it right for me?

Finance is an exciting major with plenty of career opportunities. Contrary to popular belief, it’s also a major that requires both analytical skills and a healthy dose of creativity. Above all, it will help you develop multiple skill sets at once, offering you a great chance of success in several industries after graduation.

Here are some questions to ask yourself when deciding if a finance major is right for you:

• Am I interested in math and statistics?
• Am I a creative problem-solver who is able to overcome challenges by coming up with innovative solutions?
• Am I interested in figuring out how to help companies increase their revenue?
• Am I a good communicator who is able to express my ideas clearly and effectively?

If you responded “Yes” to all of the above, then being a finance major might just be for you.

What can I do with a finance degree?

Finance as an area of study is fairly broad and offers plenty of career options. These include:

• Investment banking
• Management consulting
• Investment management
• Corporate Finance
• Accounting
• Risk management
• And more…

If you’re interested in how companies should allocate financial resources, corporate finance may be your calling. If you’re more fascinated by financial markets, how people construct investment portfolios, wealth creation and preservation, investment management could be the route for you. And if you want to learn about probability and statistics and how they correlate to business decisions, then risk management might be the right path to pursue.

What do finance majors earn?

The salaries of finance majors vary widely depending on the careers they choose to pursue. While accountants earn an average salary of $63,000 per year, management consultants earn an average of $86,000 and investment bankers can earn upwards of $250,000.

Next, learn more about this college major such as Accounting and get more career tips for internships and entry-level jobs such as How to Answer: What Motivates You?.

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Studying finance is both challenging and rewarding and when preparing to do so, it’s important to assess your skill set and understand whether the major is a good fit for you. You should also ask yourself these important questions: What types of abilities will I need to possess to be successful if I pursue a finance degree? Are they inherited or acquired? Can I get better at these skills through time?

Here are some of the most common skills you’ll need as a finance major:

Problem-Solving Skills

As a finance major, you’ll constantly be asked to change the status quo of a situation given a set number of variables. Companies often ask, “How do we enhance performance and minimize resources within this period of time?” To answer these questions, you’ll need to assess what can be done differently, spot trends within industries and evaluate potential opportunities.

Quantitative and Statistical Analysis Skills

Finance is driven heavily by numbers. If math and statistics have been areas of strength for you in the past, you’re likely to thrive as a finance major. In order to understand and analyze data, link concepts and derive conclusions based on these findings, you will need a strong mathematical foundation.

Microsoft Excel Skills

Having strong Microsoft Excel skills goes hand in hand with analyzing data. This is because working in finance involves putting together financial models that can be used to test out an investment strategy or financial decision. To build up your Excel skills, you’ll need to spend time learning the various features and functions of the program and then practice creating models, charts and pivot tables.

Creativity

Creativity is often an underrated skill when it comes to finance. This skill is often thought of as something that’s prominent in the arts, but it’s also a common trait of those who succeed as finance majors. In your classes, you’ll be asked to come up with unique solutions to problems or even implement proven solutions in unique ways. You’ll showcase your creativity through how you report the data you study and how you answer any pushback you might receive on concepts your present.

Communication Skills

The ability to communicate your analysis, findings and conclusions is really important as you head toward a career in finance. This is because in any finance-related position, you will need to effectively talk through complex data to show how various aspects of the business may be impacted. As a finance major, you’ll be put through a series of different projects, both individually and in group presentations, to hone your communication skills and prepare you for a potential career path within the industry.

While there are other traits to being a successful finance major, these are a few that you will need regardless of what specialization or industry you end up pursuing.

Next, learn more about this college major such as What is a Finance Major and is it Right for Me? and get more career tips for internships and entry-level jobs such as Top 10 Things You Should Look For In An Internship.

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Being a finance major presents you with plenty of interesting opportunities to learn about business models and financial markets while also building new skills. But with so many opportunities, you may be wondering what kind of job you can get with a finance degree. With finance being such a broad category, there are many career paths you can choose.

Here are some of the most common career opportunities for finance majors:

Investment Banking

Investment banking is often regarded as one of the more prestigious jobs you can get with a finance degree, especially from a compensation standpoint. In this role, you’ll be working on financial modeling and valuation analysis, helping companies decide on business opportunities that are right for them. These decisions can range from whether a company should merge with one company, acquire another or raise additional funding for a strategic initiative. This is a great role for someone who is interested in helping companies make strategic decisions about their assets and someone who is comfortable working long hours. This is because investment banking analyst hours are known to be quite grueling, especially for entry-level roles.

Management Consulting

Management consulting is also highly regarded as one of the more prestigious careers to embark on after pursuing a finance degree. Management consultants usually have project-based work where they analyze certain situations their clients are facing and advise those clients on what business decisions they should make. Most of this advice comes from extensive financial analysis based on the client’s current situation, similar situations previous clients have faced and current market opportunities. This is a great career path for someone who is interested in making recommendations on business decisions but not necessarily being a part of the implementation of those decisions.

Investment Management

Investment management analysts often deal with the markets and managing their client’s assets. These opportunities could range from managing the assets of wealthy individuals (through private wealth management) to managing a company’s retirement plans, pension plans or even foundation plans (which is known as asset management). Analysts in these roles often act as the support role for more senior advisors, where their tasks could be researching different investment decisions, preparing pitch decks or formalizing performance reviews. This is a wonderful opportunity for someone who is very numbers-drive and passionate about helping clients reach their financial goals.

Corporate Finance

Corporate finance roles vary widely depending on the company and division you’re in. Frequently, corporate finance jobs deal with analyzing financial decisions that affect the company internally. For example, offering advice on whether the number of employees in a company should be increased or decreased, strategizing how to decrease a company’s operational costs or determining the return on investment (ROI) of certain proposed initiatives. This is a great role for someone interested in helping with the inner working of a company and contributing to the decision-making process.

Risk Management

When firms think about maximizing return (or increasing investment), they must do so while minimizing risk (or loss). This is where risk management teams come into play. They offer advice on maximizing returns by forecasting market risks, assessing probability of bad investment outcomes and using statistical analysis to ensure that the business side of the company is acting and implementing their strategy within reason. This role is a perfect fit for someone interested in statistics and analysis.

Next, learn more about this college major such as What is a Finance Major and is it Right for Me? and get more career tips for internships and entry-level jobs such as How to Get a Mentor at Work.

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The financial services industry is a broad field with lots of career opportunities. If you’re a business or finance major, or just interested in exploring this field, you might be thinking about becoming a financial analyst. What is a financial analyst? It’s someone who carries out financial analyses and makes business recommendations based on these analyses. Although analysts typically work for banks or insurance companies, this role can be found in almost every industry so it’s a great way of combining a numbers-driven skill set with some of your other passions.

Here are the steps you need to take to become a financial analyst.

1. Know the different types of financial analyst positions

Your day-to-day activities as an analyst will vary greatly depending on what industry you choose to work in. For example, analysts working in investment banking will largely be reviewing financial statements and creating financial models while analysts working for an insurance company might be more focused on creating and analyzing budgets. By knowing what industry you want to work in, you’ll be able to get a better sense of what the position will look like and the unique challenges and benefits associated with that particular kind of role.

Pro Tip: Even within a particular industry, there are different kinds of analyst roles. For example, if you’re working as an analyst in investment banking, you could be working for a buy-side firm (where you’ll be doing research on stocks owned by the company) or for a sell-side firm (where you’ll be evaluating securities for a particular industry). In order to find a role that fits you, it’s important to know not only the specifics of the industry but also those of the firm you’ll be working for so be sure to do some extra research on any company you’re applying to.

2. Take relevant classes and read as much as you can about the financial services industry

Building your knowledge of the financial services industry is not necessarily difficult, but it will take some time. If you’re a business, finance or accounting major, you’re likely already taking classes that will be directly relevant to this industry but it’s important to supplement this knowledge with additional reading on sites like DealBook and Investopedia. This is especially important if you’re not currently majoring in a related discipline since it will give you a good overview of the industry and help you decide whether it’s something you want to pursue.

Pro Tip: If you’re not a business or finance major, don’t worry. You can still build up your knowledge base by taking some accounting or economics classes to supplement your education. This is a great way of learning more about the field while still primarily focusing on classes related to your major.

3. Develop your skills by taking on an internship

Doing an internship is important for several reasons such as building relevant skills and gaining professional experience. It’s also a great way to learn more about a particular industry and to get a sense of whether you want to continue working in that industry after graduation. Since analyst roles vary depending on the field you choose to work in, having hands-on experience of a particular role will go a long way towards helping you pick an industry that’s right for you.

4. Build your professional network

Having a strong professional network is important in any field but it’s especially important in the financial services industry which relies heavily on networking throughout the recruitment process. To build a solid network that will serve you well throughout your career, it’s important to attend networking events, stay in touch with managers from your internships and to develop strong bonds with peers in your intern class.

Pro Tip: Another great way to build your professional network is by reaching out to alumni working in your field and setting up an informational interview. Most alumni are very happy to set time aside to have these meetings with students and recent grads from their schools and as an added bonus, you’re likely to find out about additional job opportunities.

Being a financial analyst can be as wonderful as it is challenging, giving you the opportunity to learn a lot very quickly and to gain a big-picture understanding of how businesses function. The best way to find out if being an analyst is right for you is by doing an internship and testing out the role first hand. And if you want to build some skills and confidence before applying for that internship, we recommend diving right in by looking at the quarterly earnings of several public companies and seeing how they’re performing. Even better? If you’re able to do so, we recommend putting aside a small amount of money and investing in some stocks. This will help you get your feet wet in the world of finance and it will also help you talk about investing like a pro.

Next, get more career tips for internships and entry-level jobs such as 6 Things to Do in Your First Week at a New Job and find answers to common interview questions such as If You Could Invest in One Stock, Which Stock Would it Be?

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