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What a financial analyst does

December 15,2010 by: Dallas Browne

A financial analyst has one of the highest paying jobs in the market and salary for this profession is projected to increase between 2008 and 2018. Aside from this, the number of employment opportunities for financial analysts are expected to grow 20%.

One of the main responsibilities of financial analyst is to provide assistance to individuals and corporations in making major financial decisions. To be able to give the best guidance to clients financial analysts are carefully assessing bonds, stocks and commodities and other investments. Financial analysts can be categorized into two – the sell side analyst and the buy side analyst. The former is involved in selling bonds, stocks and other forms of investments and normally works for firms and banks while the latter works for companies with plenty of money to invest thus devising strategies for investments.

Financial analysts must be knowledgeable with the trends that might influence specific financial products, location and industry. They should be able to identify impacts of policies, regulations and economic and political trends to the investment tool they are working with. Analysts specializing in assessing risks should be able to project possible losses and must be able to come up with a plan on how to limit them. There are also analysts who are tasked to evaluate the capability of companies to settle debts while others perform cost analysis, credit and budget analysis.

To qualify as financial analyst one has to have bachelor’s degree in business, finance, statistics, accounting, economics and other related fields. However for certain positions, a master’s degree in business administration or finance is necessary. Other qualifications also involve strong problem-solving skills and math and analytical dexterity. A financial analyst must also be familiar with tax laws, money and the economy markets. Excellent communication skills are also necessary, including maturity and self confidence. Detail-orientation with the ability to scrutinize vague information is also a trait employers are looking for in a financial analyst. The ability to smoothly interact with people of different cultures is also a factor that employers today consider essential since financial analysts tend to travel a lot and deal with different people these days. Necessary certifications and licensures can be obtained after being hired. FINRA or the Financial Industry Regulatory Authority is the major licensing institute for the securities industry.

It is expected that there will be more job openings for financial analysts in the succeeding years; nonetheless, stiff competition among applicants is also projected. For people who are aiming at getting a position in a good company, it is best to keep in mind that a strong academic background is a certain advantage. The growth in the employment opportunities for financial analysts is attributed to the differentiation of investment tools and the augmentation of the total sum of assets under administration. Moreover, the growth in the international investment is another contributing factor to the increase in the demand for financial analysts.

 Due to the complexity of the job performed by these analysts, the salary appropriated for such position is really fulfilling. According to the 2008 data the median pay for a wage-and-salary financial analyst is $73,150. This amount is not inclusive of bonuses.


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