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Financial Analysts - What They Do


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.

Employment
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.

Job Outlook
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.

Job Growth
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.

Earnings
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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Academic Programs of Interest

Bachelor of Business Administration
The Bachelor of Business Administration is a bachelor's degree in business studies. In most universities, the degree is conferred upon a student after four years of full-time study (120 credit hours) in one or more areas of business concentrations. The BBA program usually includes general business courses ...more
Finance
Finance studies and addresses the ways in which individuals, businesses, and organizations raise, allocate, and use monetary resources over time, taking into account the risks entailed in their projects. With a finance education you will be equipped with tools for understanding the function and applications ...more
Master of Business Administration
The Master of Business Administration (MBA) is a master's degree in business administration, which attracts people from a wide range of academic disciplines. The MBA designation originated in the United States, emerging from the late 19th century as the country industrialized and companies sought out ...more
Risk Management
Risk management is simply a practice of systematically selecting cost effective approaches for minimizing the effect of threat realization to the organization. All risks can never be fully avoided or mitigated simply because of financial and practical limitations. Therefore all organizations have to ...more