Tuesday, August 5, 2014

One of the Best Business Jobs: Financial Analyst

One of the occupations that the AIM program prepares its graduates for is that of working as a financial analyst. Whether it would be on the buy- or sell-side in the investments industry, as an investment banker or a private equity analyst - many of the required skills are based on solid, financial analysis. It would be fair to say that the AIM program graduates students ready to begin their careers as financial analysts. 

Much of this content comes from the U.S. News & World Report’s evaluation of career opportunities. They recently reported that the number of jobs expected to be added in the next five years for financial analysts is going to be about 40,000 (with a median salary of $76,950 for someone with experience) - and an unemployment rate of only 2.3%. In terms of job satisfaction they report the upward mobility of financial analysts to be high; however, they also rate the job’s stress level as high. That's what happens when you work with money!

The Bureau of Labor Statistics estimates that as of the end of 2012 there were 253,000 financial analysts in the U.S. – with a job outlook growth rate of 16% between 2014 and 2022. This places the profession into one of the highest areas of future growth - especially with the upcoming retirement of the baby boomers.

What do financial analysts do? In short, they recommend to clients when to buy and sell investments by staying current on economic trends, business news and company strategy. They also write reports that explain their analysis, share their expertise with colleagues who aren’t financial experts and sometimes communicate their perspectives to the public and financial media. Many work for financial companies, including those in the financial services and insurance industries. For their influence and sizeable paychecks, financial analysts pay the price by working long hours: One in three put in between 50 and 70 hours a week.

Financial analysts need to be good with numbers, current with the news, and aware of changing trends. They cannot be afraid to forecast the future and must stay alert to changing trends in society, politics and technology. A good financial analyst should be intellectually curious and adaptive.

According to the Bureau of Labor Statistics, financial analyst positions are expected to grow by 16 percent, or about 40,000 jobs, between now and 2022, which is much faster than the average for all professions. One thing to understand is that the competition for these jobs is fierce, especially among analysts new to the field. In fact, the finance major is one of the most popular on college campuses.

Salary: The paycheck for this profession is good. Financial analysts earned a median of $76,950 in 2012, with the lowest-paid making $47,130 and the highest-paid making $148,430. The best-paid in the profession work in the metropolitan areas of Bridgeport, Conn., New York City and San Francisco. Other major cities (i.e. Chicago, Dallas, Boston, etc.) also have a high concentration of financial professionals.  The salary range is as follows: 75th percentile $103,410; median $76,950; 25th percentile $58,970.

Training: While a bachelor’s degree is required (usually in a finance-related field), many financial analysts also earn master’s degrees in finance or business administration and take additional financial analyst courses. Many in the field also become certified financial analysts, chartered financial analysts (CFAs), and employers often sponsor certification and licensing programs. You’ll get an advantage in the field by obtaining a certification, such as the CFA, or by taking advanced courses in subjects related to your specialty. The ambitious may take on larger responsibilities and advance to supervisory positions, and the best of the best may go on to become fund managers.

Reviews and Advice: Manisha Thakor, founder and CEO of MoneyZen Wealth Management, says the financial services industry is changing quickly, which means the days of linear career paths are largely over. Her biggest piece of advice for aspiring analysts is to gain work experience while studying. “Something as basic as offering to work with an established financial professional for five to 10 hours a month can make all the difference,” she says. Thakor adds that networking and building relationships in the field is also essential. “So remember to keep one hand in the books and one hand out shaking new ones.”