Financial analysts typically must have a bachelor’s degree, but a master’s degree is required for advanced positions.
Many positions require a bachelor's degree in a related field, such as accounting, business administration, economics, finance, or statistics. Employers often require a master's in business administration (MBA) or a master's degree in finance. Knowledge of options pricing, bond valuation, and risk management are important.
The Financial Industry Regulatory Authority (FINRA) is the main licensing organization for the securities industry. It requires licenses for many financial analyst positions. Most of the licenses require sponsorship by an employer, so companies do not expect individuals to have these licenses before starting a job.
Certification is often recommended by employers and can improve the chances for advancement. An example is the Chartered Financial Analyst certification from the CFA Institute, which financial analysts can get if they have a bachelor's degree, 4 years of experience, and pass three exams. Financial analysts can also become certified in their field of specialty.
Financial analysts typically start by specializing in a specific investment field. As they gain experience, they can become portfolio managers, who supervise a team of analysts and select the mix of investments for the company’s portfolio. They can also become fund managers, who manage large investment portfolios for individual investors. A master’s degree in finance or business administration can improve an analyst’s chances of advancing to one of these positions.
Analytical skills. Financial analysts must process a range of information in finding profitable investments.
Communication skills. Financial analysts must explain their recommendations to clients in clear language that clients can easily understand.
Decision-making skills. Financial analysts must provide a recommendation to buy, hold, or sell a security. Fund managers must make split-second trading decisions.
Detail oriented. Financial analysts must pay attention to details when reviewing possible investments as small facts may have large implications for the health of an investment.
Math skills. Financial analysts use mathematical skills when estimating the value of financial securities.
Technical skills. Financial analysts must be adept at using software packages to analyze financial data, see trends, create portfolios, and make forecasts.
To be successful, financial analysts must be motivated to seek out obscure information that may be important to the investment. Many work independently and must have self-confidence in their judgment.
Source: Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2012-13 Edition