How to become a financial analyst

If you love the world of finance but are looking for alternatives to accounting or investment banking, then a career as a financial analyst might be for you. Discover the duties of a financial analyst and what steps you'll need to take to become one.

What does a financial analyst do?

A financial analyst is responsible for collecting and analyzing financial data to make recommendations about a business's financial decisions. In this role, you may:

• Review financial statements to assess financial health
• Analyze market trends and broader economic conditions
• Use statistics and data analysis to build financial models and forecasts
• Create and allocate budgets for different business departments
• Compile reports to provide context and recommendations for business decisions

According to the Bureau of Labor Statistics (BLS), financial analysts earn a median annual salary of $99,890 as of May 2023.

Steps to become a financial analyst

Here are some common steps you'll need to take before pursuing a professional-level role as a financial analyst:

Step 1: Obtain a degree

A bachelor's degree isn't a formal requirement for financial analyst positions, but many employers call for one in their job descriptions. This is because the world of finance and financial reporting is complex and having the requisite knowledge can help with sound decision-making and reducing compliance risks.

For this reason, you can consider obtaining a bachelor's degree in one of the following subjects:

• Finance
• Accounting
• Business administration
• Actuarial science
• Applied economics
• Statistics or mathematics

Keep in mind that some businesses prefer candidates with a master's degree in finance, accounting, or a related field.

Whatever level of education you pursue, however, these degree programs can help you build a strong foundation in financial principles, statistical modeling, and business management, all of which are necessary for a thriving career as a financial analyst.

Step 2: Get an additional credential

Some states may allow you to work as a financial analyst without having an official license or certification. However, these can be attractive to employers, as they offer a way to confirm your financial analysis knowledge and capabilities.

One option is to obtain a Chartered Financial Analyst (CFA) certification from the CFA Institute. This credential can validate your knowledge in critical areas of finance, including investment tools, asset valuation, risk management, and more.

You can become eligible for this certification once you have a bachelor's degree (or are within 11 months of obtaining one) or 4,000 hours of work experience.

If your job as a financial analyst involves analyzing or researching equity securities, you may need to take one or more certification exams and obtain registration from the Financial Industry Regulatory Authority (FINRA).

Step 3: Do an internship

Internships can be a key part of your skill development as a financial analyst. They allow you the chance to work with experienced professionals and gain the necessary skills for success in this work through hands-on, real-world projects like the ones you may encounter in a full-time position. These skills might include:

• Corporate finance and accounting
• Financial software management
• Budget management
• Data analysis
• Research skills
• Problem-solving
• Risk management
• Communicating with stakeholders

Make sure to keep a record of the projects you work on and their outcomes. This can be valuable information for making your résumé stand out.

Get started on edX

Explore the edX platform to find courses in financial analysis fundamentals to help you hone your skills and prepare for a rigorous degree program.