When you hear "financial analyst," you might picture someone in a suit, poring over stock and bond data to guide investors. While that image applies to some analysts in banks or investment firms, the role is far more diverse. Financial analysts work across various industries and functions, including corporate finance, risk management, treasury, insurance, equity research, and financial planning & analysis.
But whatever the field or title, a financial analyst’s work revolves around analysing current and historical financial data, studying trends, and providing investment strategies based on their findings. Thus, the key difference lies in what they're analyzing and for whom they're providing insights. Keep reading to learn more about this lucrative financial career path.
The role of a junior or entry-level financial analyst is often the first step in building a career in finance. With a few years of experience, you can progress to more senior positions such as finance manager or head of risk management. Your next move will largely depend on your chosen career path, the company you work for, and your area of specialization.
Here are the most common types of financial analysts:
As a junior financial analyst in any of these areas, your primary duties will revolve around collecting information, organizing data, creating financial models, and generating reports. Moving up the ranks to a senior financial analyst role means taking on more complex projects, guiding junior analysts, and communicating insights to stakeholders.
When comparing financial analysts to other finance careers, several roles share similar responsibilities. These include financial managers, budget analysts, data analysts, personal finance advisors, and insurance underwriters. What they all have in common is the focus on analyzing financial data and uncovering actionable insights to guide decisions that support long-term financial goals.
According to the BLS, investment and financial analysts in the United States make an average total salary of $99K per year. The amount you earn may be higher or lower than that depending on the specialization, location and firm. For instance, those within the specialization of financial risk analysts get a higher average total pay of about $106K.
👉 If you're interested in checking out other possible career paths, check out our article about Salaries in Investment Banking.
Generally speaking, financial analysts fall either under buy side or sell side. So, the top firms to work for as a financial analyst are often categorized based on whether they fall on the buy side, sell side, or are independent research firms.
Here are some notable examples under each category.
Buy-side analysts work for institutional investors, like mutual funds, insurance companies, private equity firms, hedge funds, or pension funds. They provide research and investment strategies to help their firms make profitable portfolio investment decisions.
Such firms manage large investment portfolios, and are ideal for financial analysts who want to focus on portfolio management and investment strategies. The top buy-side firms to work for as financial analyst include:
On the other hand, sell-side analysts work for brokerage firms or investment banks. They create research reports and recommendations to outside clients who might want to buy securities, like stocks, bonds, and other investments through their firm. The top sell-side firms for financial analysts to work for include:
👉 If you consider starting your career at one of these prestigious firms, don’t miss our article on the Top Investment Banks in the World!
However, some financial analysts may work for other businesses and research firms that are independent from the sell and buy side. Such firms include:
The work-life balance of a financial analyst varies depending on the firm and industry. On average, most financial analysts work around 50-60 hours per week. Buy-side analysts typically have better hours compared to sell-side analysts, though both roles can become demanding during earnings seasons or major market events.
Compared to investment banking, the work of a financial analyst is generally more predictable, following regular market hours with occasional evening work for preparing reports or attending client meetings. This predictability allows financial analysts to plan their personal lives with more certainty, though staying updated on market developments outside office hours is often essential.
In comparison to other finance roles, financial analysts generally have better work-life balance than investment bankers who often work 70-80+ hours weekly with unpredictable schedules. However, financial analysts typically work longer hours than commercial bankers, accountants, or financial planners, who usually maintain standard 40-45 hour workweeks.
The trade-off comes in compensation. Roles with more demanding schedules, like investment banking, tend to offer higher pay, while those with better work-life balance often have more moderate compensation packages.
To become a financial analyst, you will need a strong educational background, relevant work experience, and analytical skills. Most financial analysts hold a bachelor’s degree in finance, accounting, business, economics, or a related field.
So, start by enrolling for a bachelor’s degree in a relevant field. Then gain relevant experience through internships and entry-level roles in investment fields that you'd like to specialize in. Gaining experience helps you build the skills necessary for a financial analyst position.
Employers look for candidates who are proficient in financial modeling, analyzing data, and using tools like Excel or financial software. Strong communication skills are also essential since financial analysts must present their findings clearly to decision-makers. Other important qualities of financial analysts include being detail oriented, excellent decision making skills, and math skills.
👉 If you want to enhance your skills, try out our Mental Math Tool and prepare for your interview!
Besides experience, you may also need certifications like the Chartered Financial Analyst (CFA) when you want to advance in your financial analyst career.
Financial analysts positions are highly competitive just like other top-tier finance careers. So, it’s important to prepare adequately for the interview process. Our top preparation tips for ensuring you impress the interviewers and secure a financial analyst job include doing self-study, participating in mock interviews, and working with an interview coach.
Here’s how to go about each of these tips.
Do a lot of self-study.
Taking the time to learn on your own is one of the best ways to prepare for the financial analyst interview process. During those sessions, you can familiarize yourself with financial analysis concepts and tools.
Start by reviewing key financial principles, such as financial modeling, valuation techniques, and data analysis methods. Utilize online resources, such as courses and tutorials, to deepen your understanding of industry-specific software and tools like Excel, SQL, and financial modeling software.
You should also familiarize yourself with common interview questions specific to financial analysts, such as those related to your analytical skills, problem-solving abilities, and understanding of financial statements. This preparation will help you articulate your knowledge and experience effectively and confidently during the interview.
Do mock interviews.
If there’s one preparation hack you shouldn’t miss, it’s doing mock interviews. They help you practice your responses, get valuable feedback, and improve your confidence. A good mock interview should simulate the actual interview environment to allow you to refine your answers to common questions and receive constructive feedback.
So, choose a mock interviewer who has experience in the finance industry to provide you with objective insights. Ideally, you may consider peers or experts, not relatives and friends. Don’t forget to ensure the setting mimics a professional environment, and treat the mock interview with the same seriousness as a real interview.
👉 You can find Peers to work with at our Meeting Board!
Consider hiring an interview coach.
After engaging in self-study and doing mock interviews, consider to work with an interview coach. These are often former financial analysts or hiring managers who know exactly what different finance firms look for in candidates.
A good interview coach will give you valuable feedback that can maximize your chances of landing a financial analyst role. During your sessions, they can conduct practice interviews, offer personalized guidance, recommend preparation strategies based on your strengths and weaknesses. All the efforts should help you present yourself more effectively during the actual interview.
👉 Looking for an expert to work with and prepare for your finance interview? Have a look at our Coach Directory!
