How to Advance (Advancement)
Although not always required, certifications enhance professional standing and are recommended by employers. Certifications are becoming increasingly common. Financial analysts can earn the Chartered Financial Analyst (CFA) designation, sponsored by the CFA Institute. To qualify for this designation, applicants need a bachelor's degree, four years of related work experience, and must pass three exams. Applicants can take the exams while they are obtaining the required work experience. Passing the exams requires several hundred hours of self-study. These exams cover subjects such as accounting, economics, securities analysis, financial markets and instruments, corporate finance, asset valuation, and portfolio management. Additional certifications are helpful for financial analysts who specialize in specific areas, such as risk management.
Financial analysts advance by moving into positions where they are responsible for larger or more important products. They may supervise teams of financial analysts. They may become portfolio managers or fund managers, directing the investment portfolios of their companies or funds.
Financial analysts held 250,600 jobs in 2008. Many financial analysts work at large financial institutions based in New York City or other major financial centers. About 47 percent of financial analysts worked in the finance and insurance industries, including securities and commodity brokers, banks and credit institutions, and insurance carriers. Others worked throughout private industry and government.
Employment of financial analysts is expected to grow much faster than the average for all occupations. However, keen competition will continue for these well-paid jobs, especially for new entrants.
As the level of investment increases, overall employment of financial analysts is expected to increase by 20 percent during the 2008–18 decade, which is much faster than the average for all occupations. Primary factors for this growth are increasing complexity and global diversification of investments and growth in the overall amount of assets under management. As the number and type of mutual and hedge funds and the amount of assets invested in these funds increase, companies will need more financial analysts to research and recommend investments. As the international investment increases, companies will need more analysts to cover the global range of investment options.
Despite employment growth, keen competition is expected for these high-paying jobs. Growth in financial services will create new positions, but there are still far more people who would like to enter the occupation. For those aspiring to financial analyst jobs, a strong academic background, including courses such as finance, accounting, and economics, is essential. Certifications and graduate degrees, such as a CFA certification or a master’s degree in business or finance, significantly improve an applicant’s prospects.
Median annual wages, excluding bonuses, of wage and salary financial analysts were $73,150 in May 2008, which is more than double the national median wage. The middle 50 percent earned between $54,930 and $99,100. The lowest 10 percent earned less than $43,440, and the highest 10 percent earned more than $141,070. Annual performance bonuses are quite common and can be a significant part of their total earnings.
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