Financial Analysts

What Financial Analysts Do

Financial analysts provide guidance to businesses and individuals making investment decisions.

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Work Environment

Financial analysts work in offices. Most work full time and some work more than 40 hours per week.

How to Become a Financial Analyst

Financial analysts typically must have a bachelor’s degree.

Pay

The median annual wage for financial analysts was $81,590 in May 2019.

Job Outlook

Employment of financial analysts is projected to grow 5 percent from 2019 to 2029, faster than the average for all occupations. A growing range of financial products and the need for in-depth knowledge of geographic regions are expected to lead to strong employment growth.

Financial analysts provide guidance to businesses and individuals making investment decisions. They assess the performance of stocks, bonds, and other types of investments.

Duties

Financial analysts typically do the following:

  • Recommend individual investments and collections of investments, which are known as portfolios
  • Evaluate current and historical financial data
  • Study economic and business trends
  • Examine a company’s financial statements to determine its value
  • Meet with company officials to gain better insight into the company’s prospects
  • Assess the strength of the management team
  • Prepare written reports

Financial analysts evaluate investment opportunities. They work in banks, pension funds, mutual funds, securities firms, insurance companies, and other businesses. Financial analysts are also called securities analysts and investment analysts.

Financial analysts can be divided into two categories: buy-side analysts and sell-side analysts.

  • Buy-side analysts develop investment strategies for companies that have a lot of money to invest. These companies, called institutional investors, include hedge funds, insurance companies, independent money managers, and nonprofit organizations with large endowments, such as some universities.
  • Sell-side analysts advise financial services sales agents who sell stocks, bonds, and other investments.

Some analysts work for the business media or other research houses, which are independent from the buy and sell side.

Financial analysts generally focus on trends affecting a specific industry, geographical region, or type of product. For example, an analyst may focus on a subject area such as the energy industry, a world region such as Eastern Europe, or the foreign exchange market. They must understand how new regulations, policies, political situations, and economic trends may affect investments.

Investing is becoming more global, and some financial analysts specialize in a particular country or region. Companies want those financial analysts to understand the language, culture, business environment, and political conditions in the country or region that they cover.

The following are examples of types of financial analysts:

Portfolio managers select the mix of products, industries, and regions for their company’s investment portfolio. These managers are responsible for the overall performance of the portfolio. They are also expected to explain investment decisions and strategies in meetings with stakeholders.

Fund managers work exclusively with hedge funds or mutual funds. Both fund and portfolio managers frequently make buy or sell decisions in reaction to quickly changing market conditions.

Ratings analysts evaluate the ability of companies or governments to pay their debts, including bonds. On the basis of their evaluation, a management team rates the risk of a company or government not being able to repay its bonds.

Risk analysts evaluate the risk in investment decisions and determine how to manage unpredictability and limit potential losses. This job is carried out by making investment decisions such as selecting dissimilar stocks or having a combination of stocks, bonds, and mutual funds in a portfolio.

Financial analysts held about 487,800 jobs in 2019. The largest employers of financial analysts were as follows:

Securities, commodity contracts, and other financial investments and related activities 18%
Credit intermediation and related activities 15
Professional, scientific, and technical services 12
Management of companies and enterprises 11
Insurance carriers and related activities 6

Financial analysts work primarily in offices but travel frequently to visit companies or clients.

Many financial analysts work at large financial institutions based in New York City or other major financial centers.

Work Schedules

Most financial analysts work full time and some work more than 40 hours per week. Much of their research must be done after office hours because their days are filled with telephone calls and meetings.

This table shows a list of occupations with job duties that are similar to those of financial analysts.

Occupation Job Duties Entry-Level Education Median Annual Pay, May 2019

Budget Analysts

Budget analysts help public and private organizations plan their finances.

Bachelor’s degree $76,540

Financial Managers

Financial managers create financial reports, direct investment activities, and develop plans for the long-term financial goals of their organization.

Bachelor’s degree $129,890

Insurance Underwriters

Insurance underwriters evaluate insurance applications and decide whether to provide insurance, and under what terms.

Bachelor’s degree $70,020

Personal Financial Advisors

Personal financial advisors provide advice to help individuals manage their finances and plan for their financial future.

Bachelor’s degree $87,850

Securities, Commodities, and Financial Services Sales Agents

Securities, commodities, and financial services sales agents connect buyers and sellers in financial markets.

Bachelor’s degree $62,270

For more information about licensure for financial analysts, visit

Financial Industry Regulatory Authority (FINRA)

For more information about training and certification, visit

CFA Institute

For more information about certifications in financial analysis, visit

Global Academy of Finance and Management

CareerOneStop

For a career video on financial analysts, visit

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Suggested citation:

Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Financial Analysts,
at https://www.bls.gov/ooh/business-and-financial/financial-analysts.htm (visited ).