Learn How to Become a Financial Analyst in 2023: Learn Guide

Data is a core element of making crucial decisions in the business world. The financial analyst job description mentions that the function of a financial analyst involves analyzing expansive volumes of information and delivering insights to businesses. A financial analyst works in the financial services industry, often for firms, private companies, corporate institutions, and even governments.

They perform the functions of management accounting, analyze the financial data, analyze the past, control the present, and plan for the future, thereby helping enterprises to improve operating efficiency and maximize the interests of shareholders. They also often recommend a course of action, such as buying or selling a company's stock based on its overall performance and outlook. One of the biggest reasons analysts are in massive demand is how they help organizations diversify assets and their portfolios. 

A career in financial analytics is for individuals who like to evaluate and compare facts and then make judgments and decisions based on what they have learned. They like to make charts, plot graphs, compare the pros of different purchasing choices, and plan everything.

If you have these traits and want to know how to become financial analyst, then fulfill the following requirements

Education: Compared to many high-paying careers, the qualifications to become a financial analyst are well-defined. You must have a bachelor's degree, preferably in disciplines like economics, finance, statistics, accounting, math, engineering, etc. Professionals often go for master's in finance, a math-related field, or MBA courses to become financial analyst. This provides you with invaluable knowledge of the financial industry and its guiding principles.
 

Certifications: Professional certifications help you to stand out from the intense competition in the job market. They can also facilitate your career by introducing you to industry best practices and keeping you in touch with the latest information, trends, skills, and tools.

You can acquire certifications by opting for professional online financial analyst courses, attending training and workshops, and sitting for professional exams. Generally, after gaining a certain amount of experience, professionals get Financial Industry Regulatory Authority (FINRA) licensing. 

Besides, that below-mentioned financial analyst course certifications are the most popular among financial analysts

• Chartered Financial Analyst (CFA)
• Certified Financial Planner (CFP) by Financial Planning Standards Board (FPSB)
• Financial Modeling & Valuation Analyst (FMVA) Certification by Corporate Finance Institute (CFI)

Work Experience: It’s important to have both the right education and any needed licensing and certifications to become a financial analyst. Also, future financial analysts need to get work experience in the industry as early as possible and work their way up. Aspirants with hands-on experience in finance, economics, or accounting might have big advantages over other jobseekers.

The following are the top soft skills needed for financial analysts:

• Critical thinking: making well-reasoned judgments based on logical thought processes
• Time management: the ability to use one’s time effectively and productively
• Analytical skills: It includes analyzing vast volumes of information, extracting insights from unstructured data, cleaning it up, and identifying business opportunities.
• Communication skills: Strong interpersonal and communication skills help explain complex financial jargon in simple words.
• Leadership skills: It is not just about leading a team but also creating a friendly and collaborative atmosphere to build successful teams.

A successful career as a financial analyst requires strong technical skills regardless of financial analysis education. Here is a list of some of the top tech skills required for this career -

• MS Excel: It is an essential skill to possess as a financial analyst. It is the foundation of all financial models. Taking the time to become familiarized with Excel shortcuts will help you enormously. This not only helps you in managing data but also in navigating company databases and other software applications.
• Accounting skills: A financial analyst needs to follow accounting procedures. This can be done through IFRS (International Financial Reporting Standards) and GAAP (General Accepted Accounting Standards). Budgeting and forecasting, cost analysis, managing cash flow, reconciliation, and other skills for financial analysts will improve an analyst’s work.
• Knowledge of Financial analysis software: The financial analysts should have up-to-date knowledge of the organization’s latest accounting software such as SAP ERP, SAS, MATLAB, etc. You can learn it through online courses.
• Programming Languages: Employers prefer professionals with strong knowledge of languages like SQL, Python, SAS, R, etc. Knowing these languages helps in managing a large amount of data with ease.
• Financial Modeling: You should have a working knowledge of different financial models, like merger and acquisition financial models, three-statement modeling, discounted cash flow, IPO modeling, etc. It helps the financial analyst in advising management regarding various business decisions.

According to the Bureau of Labor and Statistics, the demand for financial analysts will grow by 9% between 2021 and 2031. On average, approximately 32,000 job openings for financial analysts are projected each year. This also means financial analyst salary is quite competitive. Demand for financial analysts generally boosts with overall economic activity. In addition, emerging markets worldwide are providing new investment opportunities, requiring expertise in regions where those markets are located.

The career path is quite streamlined, and one can grow in this profession with the right skills. Junior analysts are generally promoted to senior analysts over 3 to 5 years. Senior analysts can become portfolio managers, a partner in an investment bank, or senior managers in a retail bank or insurance company. Some choose to become investment advisors or financial consultants.