What is Financial Analyst? (2024)

Both sell-side analysts and buy-side analysts perform detailed research on company’s financial data, in addition to thorough financial analysis and creating financial models, to inform investment decisions. Financial analysts will typically focus on either equity markets or credit markets.

Both credit and equity analysis are also relevant for research analysts. Research analysts and financial analysts are different, because financial analysts are more likely to make investing recommendations using the data they analyze, while research analysts tend to be involved in a broader, more investigative data collection and interpretation process.

In a financial analyst position, there are several core competencies that an individual can develop through their education and early career experiences. Most entry-level financial analyst roles require a bachelor’s degree in accounting, finance, business administration or a related field such as statistics, economics, or general business. In some cases, you may be able to substitute a formal degree with several years of relevant experience, but a degree will likely make you a more competitive candidate.

Senior financial analyst positions tend to have a heavier emphasis on communicating directly with high-ranking client contacts, speaking with company management, and developing marketing ideas to promote financial analyst services to potential new clients. Therefore, having experience in demonstrating good communication skills to develop client relationships with company officials is essential to have a successful career. Also, proving one’s ability to think strategically on behalf of clients is another way to improve chances of career advancement into a more senior role.

Whether you are continuing your education as a university student who wants to develop skills for a future career as a financial analyst, or you are a junior analyst who wants to advance professionally in the field, focusing on developing financial analyst skills is key.

Four areas of valuable skill for financial analyst in the investment industry include analytical / math skills, industry or sector expertise (including awareness of the regulatory environment), awareness of global current events, and persuasive communication skills.

The global financial market is experiencing monumental growth and evolving lately. If you are thinking of making the move into the financial analyst field, there are a few aspects of an entry-level finance job to keep in mind. Junior analysts typically work long hours and spend more hours performing analytical work “in the weeds” with financial models, creating and updating client deliverable documents, and performing research to help them develop sector or industry expertise.

A day in the life of a senior financial analyst will likely involve supervisory work of junior analysts, synthesis of junior analyst findings to finalize client recommendations or insights, and direct networking with clients. Depending on the senior analyst’s position on the buy side vs. the sell side, there may be travel requirements involved in the course of client meetings and presentations. Career advancement for senior analysts can include becoming a portfolio manager or fund manager where they manage a company's investment portfolio. They have the ability to move into high ranking roles in investment banking.

If you enjoy analytical work that produces actionable insights on behalf of clients making lucrative financial decisions, then this job could be a great career path for you. If you enjoy a job where you can preserve a 40-hour work week or need to work in a space with little client-facing interaction, it may be a good idea to look toward other finance industry roles to determine if they are a better fit.

There are several credentialing choices available to financial analysts seeking certifications to advance their professional development, including the CFA Exams, Series 7 Exam, the Securities Industry Essentials (SIE) Exam, and FINRA Licensing.

Many hiring managers for financial analyst jobs list the CFA charteras a desired qualification. As a leading certification in the investment management and asset management industry, the Chartered Financial Analyst designation demonstrates to a current or potential employer that you have completed rigorous preparation for this challenging three-level examination in the fundamentals of investment tools, valuing assets, portfolio management, and wealth planning.

Since the CFA designation also carries with it a commitment to promoting ethical practices in the investment management industry, and provides access to a global network of investment management professionals, it can go a long way in convincing clients of an analyst’s trustworthiness and in supporting the networking demands of the financial analyst job description.

Interested in exploring other financial services roles beyond buy-side or sell-side financial analysts? Check out our career hubfor more role descriptions, including:

• Research Analyst
• Investment Strategist
• Risk Analyst & Manager