How to Become a Financial Analyst: A Guide to Certifications and Qualifications

Financial analysis is a highly sought-after profession that involves evaluating data and providing recommendations to clients using various financial and economic tools and methodologies. If you possess the ability to process large amounts of information without missing any detail, make informed decisions, and communicate effectively, then a career as a financial analyst may be a great fit for you. However, it’s important to note that there’s more to being a financial analyst than just having these qualities. A solid educational background in finance, accounting, math, statistics, or economics is also necessary. It’s worth mentioning that financial analysts are not the same as accountants.

In this article, we will discuss who a financial analyst is, how to start a career in financial analysis, and the necessary certifications and qualifications.

Who is a Financial Analyst?

A financial analyst is an expert in financial analysis who specializes in evaluating data, offering recommendations, and drafting reports for clients. They use financial modelling and analytic software, as well as numerous financial and economic tools and methodologies, to analyze and interpret financial data. Financial analysts are responsible for providing recommendations and presenting their findings to clients.

How to Start a Career as a Financial Analyst

To become a financial analyst, you need to have an educational background in finance, accounting, math, statistics, or economics. Most companies require applicants to have a solid foundation in finance, accounting, math, statistics, or economics. However, some companies may consider candidates with degrees in other industries if it aligns with the financial analysis work they do.

While a master’s degree is not necessary at the beginning of your career, you may want to consider pursuing one or other equivalent professional qualifications later on, to advance to more senior analyst roles.

Certifications and Qualifications

Institutions award various certifications to showcase your competence and skill level in financial analytics. However, most of them are expensive and have stringent requirements such as employer sponsorship or certain work time hours. Some employers don’t expect you to have additional certifications right from the start. They recruit directly from ivy league level universities or do so through their internship programs.

Certifications such as Chartered Financial Analyst (CFA) and Certified Public Accountant (CPA) are highly respected and can demonstrate your high skill level. CFA certification requires a bachelor’s degree, four years of qualified work experience, and passing three exams. A CPA certification shows your dedication to learning, as it requires a lot of continuing professional education (CPE) to maintain it.

The conversation comparing MBA and CFA is extensive, and ultimately, you will have to make your own decision based on your career goals and experience. However, conducting research on different companies and understanding their specific requirements will be beneficial for you.

Specialization

Specialization is critical in the financial analysis field. As you gain experience, you’ll have the opportunity to specialize in a specific investment field. Whether it’s asset management, hedge funds, or investment banking, specializing can help you become an expert in your chosen field and advance your career.

To prepare for a career as a financial analyst, it’s essential to research the industry and gain an understanding of the skills and qualifications employers are looking for. Look for financial analyst job postings on LinkedIn, job boards, and Twitter. Reading job postings and the requirements listed for the roles will give you a clear picture of what employers are looking for, the relevant skills, and the preferred degree/certification level.

Licensing

The Financial Industry Regulatory Authority (FINRA) is the primary licensing organization for the securities industry. A license is generally required to sell financial products, which may apply to some financial analyst positions.

Conclusion

In conclusion, a career as a financial analyst can be rewarding and fulfilling if you possess the necessary skills and educational background. To become a financial analyst, you need to specialize in a specific investment field, gain experience, and advance to higher positions. A certification such as CFA or CPA can demonstrate your competence and high skill level. However, it’s not always necessary to have a certification right from the start, and some employers recruit directly from ivy league level universities or through their internship programs.