The chances are that you already know a little about what financial analysts do and what it takes to be successful in the career.
The profession is demanding—intellectually, physically, psychologically, and culturally. It is not for the faint-hearted or the reclusive. Expectations for performance are lofty—even in the initial stages of the career, in which financial analysts train for more elevated positions in the finance division of corporations or institutions.
Still, as an inductee into the world of financial analysis, you bring value to the corporations or institutions you join. You’ll find that employers will do everything they can to give you the leeway and coaching you need to be a success, as long as they see your potential—and your dedication and willingness to do what it takes to climb the financial analyst ladder. When you do, the monetary and professional rewards make all the effort worthwhile.
You should use the information in this post—on the requisites of the financial analyst position, the competitive and geographic job prospects facing it, and the skills and personal characteristics it requires—for an honest self-appraisal.
A financial analysis career is not for everyone. It may, however, be perfect for you.
Financial Analysts—Who They Are and What They Know
Financial analysts monitor and track investment vehicles to advise corporations and institutions on the mix that fits the asset and liability profiles of those entities. The Bureau of Labor Statistics distinguishes between two broad positions. One is the “buy-side” financial analyst, who develops investment strategies for companies with a lot of money to invest—from insurance companies to endowed universities. The other is the “sell-side” financial analyst, who counsels financial-services sales agents who sell stocks, bonds, and other investments.
The Intellectual Skill Set
Financial analysts must have a versatile, well-rounded knowledge of the scores of investment vehicles available for purchasing or selling financial-asset debt, equity, or derivative securities. These securities include bonds, notes, stocks, and money-market and mutual-funds accounts, as well as options, futures, foreign exchange, and swaps. The analyst must know how each vehicle might perform under different economic and market conditions, to ensure that the collection of vehicles in a portfolio is best diversified to minimize risk while also bringing the best return on investment.
To meet this requisite, you must be knowledgeable with current and historical financial data and business and trade trends to ensure top portfolio performance. You must also be intimately familiar with reading and supplementing corporate and institutional financial reports—liability and asset, equity and market position, and cash-flow statements—to know how investment vehicles fit within capital constraints.
Finally, you must be comfortable communicating with and writing reports for executive-level staff, and nurturing a rapport with the clientele who “vend” investment vehicles that fit the corporate or institutional portfolio.
Thus, you’ll begin to know whether a career in financial analysis is right for you if you have the following intellectual skill set:
- A grasp of numbers, and the math skills necessary to transform them into investment returns
- Computer aptitude with financial algorithm software
- A forecaster’s eye for trend analysis, including the ability to interpret and prepare financial charts and spreadsheets
- Versatile communications skills, including the ability to listen and respond
The Personal Skills You’ll Need…