Defining the Aspects of Financial Analyst Jobs
Who is a Financial Analyst?
A professional who has the skills to offer financial guidance to businesses and individuals for their investment decisions, after analyzing their financial health, is known as a Financial Analyst.
Some of the common tasks that a financial analyst has to perform are:
- Recommending individual as well as collective investment options to a business or an individual.
- Analyzing the current and previous data pertaining to finances of their client.
- Studying the economic and commercial trends.
- Evaluating the value of a company by examining its balance sheet.
- Meeting the client and other officials from a company to know about their business goals and operational processes.
- Creating reports.
- Meeting investors to brief them about the investment options available.
These are the general tasks that a professional associated to a financial analyst job has to perform on a regular basis.
There are several names for this job role, which depends on the responsibilities that they are upheld with. Security Analysts and Investment Analysts are the other job titles for this role. Financial Analyst jobs are available with; banks, stock broking firms, pension funds, mutual funds, securities and insurance providers.
There are two broad categories of financial analysts: buy-side analysts and sell-side analysts.
Buy-side analysts are involved with large corporations, known as institutional investors. These investors include hedge funds, nonprofit organizations, insurance companies, mutuals funds as well as universities.
Whereas, sell-side analysts, are the ones who are engaged with selling of stocks, bonds and other investment instruments.
Financial analysts keep a close watch on the trends that will have an effect on a particular industry, geographical location or a product. A financial analyst has to carve out a niche for themselves, for instance, an analyst may focus on mergers and acquisition in the hydropower sector, in a specific geographical location or a country. They also have an in-depth understanding of new regulations, policies, social and economic trends which may have an impact on the investments.
With the globalization of economies, the financial analyst also has to create a niche in a particular geography, as companies are now more looking forward to making cross-border investments. This demands in a financial analyst, the ability to understand the language of the country, know about the prevailing trends in the economy, along with the political scenario of the country.
Sub-Roles in Financial Analyst Jobs
There are different sub-roles in financial analyst jobs, to cater to a specific domain of financial investments. Let us see what are they:
Portfolio Managers: They spearhead a team of analysts and manage an assortment of investment options. They manage the investment portfolio of a business or an individual, by suggesting them investment decisions and strategies.
Fund Manager: A fund manager is associated with hedge funds or mutual funds. They need to be on their toes, as there are instances when they need to make selling or buying decisions, to avert losses or to earn profits.
Rating Analysts: A rating analyst examines the ability of a company or a government to go debt free. They evaluate the risk involved in making an investment or giving out a loan to a company, to study whether a business will return profits or pay off its debts.
Risk Analysts: This is one of the most important roles in the banking and financial sector. These analysts predict the possibility of financial losses. The task that they perform is done by making investment decisions and then selecting the combination of stocks and bonds in an investor's portfolio.
Financial analyst jobs have shown signs of growth over the years, as openings with major organizations have surfaced on various job sites in the past. Growing demand of investment instruments and the wide plethora of investment options available has propelled financial analysts jobs towards growth.
Financial products and investment options are becoming more complex, hence, making it essential for a business or an individual to consult a financial analyst for the betterment of their financial health.
However, with the growing opportunities in Financial analyst jobs, one has to face stiff competition. Those who have a certification as a financial analyst along with some other short term courses which are relevant for this job role will be the benefitted lot.
Financial analysts are also required in the investment banking field, where they help companies raise money and work on corporate mergers and acquisitions. However, growth in demand for financial analysts to do company research has been, and will continue to be, constrained by regulations that require investment firms to separate research from investment banking. As a result, firms have eliminated research jobs in an effort to contain the costs of implementing this regulation.
Financial analyst jobs are also present with investment banks, where they are responsible to help businesses attract investments and pursue mergers and acquisitions.
Getting Certified as a Financial Analyst
The Certificate of Chartered Financial Analyst (CFA) is offered by the CFA Institute and the certificate is recognized globally. To register for the certification, an applicant needs to be a member of CFA institute along with a graduate degree. The examinations which lead to the certification has three levels, which takes a duration of 2 to 5 years to get certified. All this while, a candidate who has prior work experience of at least four years is certified as a CFA only after clearing the examination.
Five Years Down the Line
Once you have completed a tenure of more than five years, your rank in this domain will rise to the senior level. As a senior financial analyst, your role, duties, and responsibilities will rise considerably. You will be managing a team of analysts in your organization to create financial reports, making forecasts and suggest ways to reduce costs. You would also oversee mergers and acquisitions, audits and finance.
Depending on the sector you are employed with, which is entirely based on your niche. As a senior resource in a for instance, IT company, you will be engaged with supervising reporting, data management, monitoring financial transactions and software, analysis and comparison of portfolio components, assets and variance.
Auditing tasks, both interim and annual, shall fall in your key responsibility areas. Preparing reports and giving suggestions to the senior management of the organization would be your areas of concern as a senior financial analyst.
Travel and extended work hours are the elements of this job role, which vary employer to employer.
To groom yourself as a senior financial analyst during your initial years, develop a strong understanding of organizational processes, strengthen your financial and analytical ability. Remain team oriented, motivated and persuasive. Apart from these, you would also need to possess excellent verbal and written communication skills, because a senior resource you would be the face of your team and your organization, hence, it is of prime importance for you to be a proficient communicator.
Financial analyst jobs are projected to rise exponentially in the coming future. As organizations and individuals have now realized the value a financial analyst can add to their investment portfolios making the job scope reach far and wide. Hence, if you are looking to apply for financial analyst jobs, then this is the right time to set sails and head out on a job hunt, as the competition is comparatively low, as what recruiters have to say. Make a resume and highlight your skills and expertise in the area of finance and accounting, begin your journey to earning your well-deserved success.