With the recent growth in the business and finance sector, employers would likely hire qualified individuals to provide financial analysis. Financial analysts are also called securities analysts and investment analysts. Financial analysts are the professionals who collect, monitor and evaluate information to make forecasts and recommendations relevant to their sectors.
Qualifications For Financial Analyst Job
There are mainly three levels of educational degree or certification required for a financial analyst job.
To be a financial analyst bachelor’s degree is the basic qualification. Bachelor’s degree in economics, finance, mathematics, statics etc. makes you eligible for a financial analyst job. Person with a bachelor’s degree can join in the entry level position in a financial analyst job.
A master’s degree gives you the direct entry ticket to senior financial analyst. A senior analyst gets promoted to senior positions such as portfolio manager, fund manager, and other senior positions.
Since the hiring is done for the higher profiles, the corporation looks for certain professional certification when hiring a senior level candidate. The most prominent certification for candidates is Chartered Financial Analyst (CFA).
Skills Required For Financial Analyst Job
Financial analysts deal with the accounting area of an organization. Therefore it is necessary to have accounting skills. A financial analyst should have skills related to budgeting, forecasting, cost analysis, managing cash flow, reconciliation, etc.
A financial analyst must be good at financial modelling. They need to have good working knowledge of different types of financial models.
Knowledge of Accounting Softwares
Financial analysts should have knowledge in the latest accounting softwares. Every organisation needs candidates with good knowledge in accounting softwares.
Project Financing Skills
Project financing skills are the best asset for a financial analyst. For project financing skills they should know about finance modelling and have strong analytical skills.
Corporate Financial Knowledge
As a financial analyst individuals should know about corporate finance topics such as equity research, private equity, and fixed income. These skills are necessary if you are working in investment banking or fund or portfolio manager.
Communication and Interpersonal Skills
Having strong communication and interpersonal skills is a critical skill for a financial analyst. It helps to solve problems effectively over a phone or via email.
Problem Solving Skills
Financial analysts need to have good problem solving skills. These skills help to find solutions for complicated financial equations and decisions regarding the company’s critical matters.
Responsibilities Of Financial Analyst
- Analyzing financial data and providing forecasting support.
- Preparing accounting and other required reports and projections based on the analysis performed.
- Establishing and evaluating records, statements, and profit plans.
- Oversee financial functions, such as assessing, auditing, planning, budgeting, taxes, consolidation, cost control and project control.
- Identifying financial performance trends, and financial risks, and making recommendations.
- Provide financial models.
- Coordinating with other members of the finance team.
- Making financial forecasts.
- Analyzing inventory.
- Review all non-legal pertinent information about prospective deals.
If you are considering a career as a financial analyst or already working as a financial analyst, achieving a professional finance certification will help you to increase your earning, power, reputation, and ability to deliver high quality financial statements.
Top Finance Certifications are :
Chartered Financial Analyst (CFA)
Chartered Financial Analyst certification is mainly focused on portfolio management and investment analysis. The main topics include ethical and professional standards, quantitative methods, economics, financial reporting and analysis, corporate finance, equity, fixed income, derivatives and alternative incomes.
Certified Public Accountant (CPA)
Certified Public Accountant (CPA) certification is the best option in the accounting world. CPA mainly focused on auditing, attestation, business environment and concepts, financial accounting and reporting, and regulation.
Certified Financial Planner (CFP)
Earning CFP certification is a great option for those who are looking for a career in investment or wealth management. It is mainly focused on financial planning. CFP is the best certification for those who want to manage high net worth clients.
Financial Risk Management (FRM)
Financial Risk Management certification is specially designed for those who want to work as risk officers, risk analysts, and other positions in risk management. Compared to other certifications FRM is the most niche and targeted certification.
Chartered Alternative Investment Analyst (CAIA)
The CAIA certification is mainly focused on alternative investment. Professionals in asset management and hedge fund industries are most likely to get the certification. CAIA is mainly focused on ethics, hedge funds, private equity, real assets, structured products, asset allocation, and risk management.
Career Opportunities For Financial Analyst
The growing range of financial fields makes employment growth in financial analyst jobs. The demand for financial analysts increases with economic growth.
Some top careers related to financial analyst are :
- Budget Analyst : They help the public and private sectors to organize their finances. They are responsible for preparing budget reports and monitoring institutional spendings.
- Financial Managers : Financial managers are responsible for financial matters of an organization. They are responsible for producing financial reports, direct investment activities, and develop strategies and plans for the long-term financial goals of their organisation.
- Personal Financial Advisors : Personal financial advisors give advice on investments, indurance, mortgages, estate planning, taxes, and retirements for the individuals to help their finances.
- Insurance Underwriters : They evaluate insurance applications and determine coverage amounts and premiums. They make decisions about whether to provide insurance and under what terms.
Importance Of Practical Knowledge
Knowledge is an important part in every career. Theoretical knowledge is not enough for those who want to pursue a career in the finance sector. To be a successful Financial Analyst practical knowledge is a mandatory factor. We can achieve theoretical knowledge through academics, but you may need strong practical knowledge.
For good practical knowledge you can choose internship programs. Certifications make you an expert in a particular area and may help you to prove your skills to the employer. Financial analysts need strong technical skills to be able to execute complex financial processes. These skills can be achieved by continuous learning and work experience.
- What are the certifications needed to work as a financial analyst?
Individuals with Certified Financial Analyst certification can achieve alluring opportunities with a high package. Also CPA, CFP, FRM, and CAIA are the other certifications beneficial for financial analysts.
- What is a cash flow statement?
Cash flow statement is a financial statement that provides aggregate data regarding all cash flow a company receives for its ongoing operations and external investment sources.
- What are the major financial statements?
Mainly there are four types of financial statements. They are : balance sheets, income statements, cash flow statements, and statements of shareholders equity.
- What do financial analysts do?
Financial analysts are responsible for analysing data to assess the performance of bonds, stocks, financial assets and other types of investments to make accurate investment decisions.
- What are the different types of financial analysts?
The role of financial analyst increases with increase in the economy. Financial analysts are always in demand in every sector of finance. Some of the career options for financial analysts are :
- Portfolio managers
- Fund managers
- Rating analysts
- Risk analysts
- Research analyst
- Investment strategist