How to Become a Financial Analyst

Financial Analysts perform a range of tasks for their clients or organization, such as collecting data, organizing information, evaluating historic results, and offering projections and forecasts. These professionals use the insights they find during the analytics process to offer recommendations to decision-makers. They do so by creating presentations and reports, as well as generating Excel models. Working in financial analytics can be a rewarding job for those who thrive working in fast-paced environments. If you want to become a Financial Analyst, knowing the steps needed to break into this field can demystify the process. Read on to find out what steps you should take toward getting this dream career.

What is a Financial Analyst?

Financial Analysts study financial data and perform various research tasks to spot investment opportunities and analyze possible outcomes for business decisions. These professionals play an integral role in helping to create more informed investment strategies for their organization or its clients. To do so, Financial Analysts routinely perform tasks for their employer like studying current events and developments in the market, examining financial statements, and creating financial models that can anticipate future performance. They also may study macroeconomic trends or hone in on particular industries or sectors. Financial Analysts rely on their background in math, accounting, research, reporting, communication, critical thinking, and data analytics to perform these tasks.

Because of how valued they are by organizations, Financial Analysts often find employment with large corporations like insurance companies, security firms, investment banks, venture capital firms, or government agencies. They play an integral role in supporting an organization’s budgeting initiatives, as well as writing financial status reports and recommendations. Their process often involves steps such as collecting data, organizing information, performing data analysis on these numbers, providing projections or forecasts, offering recommendations, creating Excel models, presenting their findings to organizational stakeholders, and writing reports or dashboards to convey suggestions. Depending on their professional focus, Financial Analysts do extensive research on their organization’s buy-side and sell-side financial data. They often focus on either credit markets or equity markets.

Read more about what a Financial Analyst does.

What Tools Do I Need To Get Started?

Microsoft Excel

Microsoft Excel is a common tool for finance professionals. This industry-standard spreadsheet application provides users with many built-in features and functions to help with common financial analytics tasks. One of the most common features Financial Analysts use in Excel is financial modeling. Excel provides a way to use integrated data to create Excel models. It also helps users perform user-defined VBA functions, subroutines, and array functions. One of the main benefits of working with Excel is that it can integrate with a range of other programs. This makes it easier to analyze data for better financial outcomes. Because Excel is considered the finance industry’s most valuable tool, those who wish to pursue competitive careers in financial analytics must know how to work with Excel’s various features and functions.

Excel is available for purchase from Microsoft for $160. It’s also available as part of a Microsoft 365 subscription for $6.99/user/month. A free Excel trial is also available for those who want to get a feel for working with this spreadsheet software without committing to purchase.

Bloomberg Terminal

The Bloomberg Terminal is a computer system that allows investors to connect with the Bloomberg data service. This service offers a range of real-time financial data, such as messages, price quotes, and news feeds. In addition, investors can also use Bloomberg Terminal for trading on the electronic trading platform.`The first Bloomberg terminal was released in 1982, and in the time since, it’s become a popular professional service for large financial firms. This computer system helps financial professionals and investors stay up-to-date on market changes. Users cite many benefits to working with a Bloomberg terminal. It provides improved uniformity and consistency in the investment process and improves the potential for portfolio expansion. It also provides improved operational and compliance speed.

Bloomberg Terminals are all leased for two-year cycles. This product is offered for an annual fee of approximately $20,000/user or for $24,000/year for small firms that require only one terminal. In January 2023, subscription prices for Bloomberg Terminal will increase to $2,500/user/month or $30,000/year for single terminal use. Those who wish to purchase multiple terminals can do so for a monthly subscription fee of $2,215 or $26,580 a year.

SAP

SAP, or Systems Applications and Products, is software for enterprise resource planning. It helps organizations avoid data silos when sending data from one department to another. SAP provides a centralized platform onto which all the processes and data from an organization’s various functions can be gathered and processed. This software is essential for many organizations because it facilitates clear communication between departments. In addition, SAP offers a range of solutions and systems for finance professionals, like tools for budgeting, financial planning, compliance, and tax management. It also includes tools for risk management, billing, collections, and accounts payable. Companies across the globe widely use this software. SAP is often used in positions like project management, human resource management, finance management, accounting, and customer relations management.

SAP price plans vary in cost depending on which plan you select. If you’re interested in purchasing SAP ERP, two basic plans are available. A full license is available for $3,213/user or through a monthly subscription of $108/user/month. Additionally, a restricted plan is offered for $1,666/user/month or $56/user/month for a subscription. If you’d like to try SAP before committing to purchase, a free trial of SAP is also available.

Steps to Become a Financial Analyst

If you are interested in becoming a Financial Analyst, the good news is that there’s no one “correct” career path. Instead, there are skills you’ll need to acquire as you go (hard and soft skills) and certain training options you may consider to help you succeed in this field. While your path may change as you study finance and related fields, certain steps are common to most individuals who aspire to be Financial Analysts. The following paragraphs will further explore each step in the process of becoming a Financial Analyst:

Determine Your Path

Finance is a broad field, one that extends far beyond financial analytics. If you’re interested in pursuing this field as a possible career, you may want to decide on a path that will take you to your goal. Financial Analysts may decide to work for local or regional banks, real estate investment brokerages, insurance companies, or data-driven organizations. The options extend into all industries where decisions take place about how best to spend money. In addition, other career options in finance are also available and can make excellent careers. Perhaps you will want to explore options like becoming a Securities Trader, Financial Planner, Actuary, Portfolio Manager, or Quantitative Analyst. The more articulated the idea you have about which field of finance you wish to go into, the easier it will be to create a plan to help you reach your goals.

If you’re still testing the waters and unsure of which finance-related career path is right for you, Noble Desktop provides free articles and videos on finance that can help you learn more. For those who want to learn the basics of how to invest in the stock market, Noble’s Intro to Stock Market Investing provides an hour of video content on core investing topics like what stocks and bonds are, how they’re priced, the risk-reward principle, and capital gains tax, among others. In addition, Noble also has several short YouTube videos aimed at helping beginners learn financial modeling. Each video is just a few minutes long and provides insights into topics such as Interest Rates and the Fed, Foreign Exchange, and Understanding Terminal Value.

Financial Analyst Career Path

Although all Financial Analyst jobs are different, these professionals typically create financial plans, projections and forecasts, and analytical reports based on their data findings. However, the specific duties of a Financial Analyst can vary significantly, depending on the type of finance job, as well as the employer’s requirements.

Some Financial Analysts are employed in the securities industry, where their job involves analyzing securities, bonds, or stocks for organizations such as money management firms, banks, or brokerages. These professionals draw from a specialized skill set, such as their knowledge of tech stock or Canadian corporate bonds. Some Financial Analysts choose to work for large corporations in positions where they review the organization’s financial data to create revenue expense projections and financial plans, as well as provide recommendations to executives on investments or budgeting. Government bodies or nonprofit organizations employ other Financial Analysts.

Because there’s no degree requirement necessary to pursue a career in finance, you can still become a Financial Analyst without a degree. Although those who have a bachelor’s may be more likely to find employment in this field, internships and entry-level positions are currently available at many organizations.

Those who have just graduated with a bachelor’s degree in finance or a related field may be interested in exploring junior positions in which a Senior Analyst guides them. After gaining several years of real-world experience, they can then choose to continue in their current job, go to graduate school to pursue an advanced degree, or enroll in a certificate program with industry-specific training. Even though Junior Analysts may be able to advance in their assigned position, progressing to roles with more responsibility often entails further education, such as through an MBA or a master’s in finance. Most Senior Financial Analysts have pursued secondary education to better understand and serve their organization’s financial structure and needs. Senior Financial Analysts, too, can progress into more advanced positions. Those working in the securities industry can pursue careers such as Fund Managers or Portfolio Managers, which involves managing a team of Senior Analysts. They may also be qualified for roles as Chief Investment Officers or Chief Financial Officers, in which they handle an organization’s financial activity.

Another career path those with a background in finance may wish to consider is freelance financial analysis. Many freelance jobs are available in finance, such as Freelance Financial Writer, Financial Planner, Accountant, or Analyst. These third-party Analysts have the flexibility of being able to work from any location and to help with almost any financial project for an organization.

Read more about the typical Financial Analyst career path.

Why Become A Financial Analyst?

Financial Analysts play an integral role in guiding their company’s investment decisions. Sound investments are essential for ensuring economic stability and facilitating continued organizational growth. These professionals provide services and insights that impact a range of stakeholders, from large corporations interested in becoming more profitable to couples planning for retirement. There are many benefits to pursuing a career as a Financial Analyst. High pay rates are the first benefit. Financial Analysts typically receive competitive salaries for their efforts. In 2021, the median pay for Financial Analysts was $96,000. This field also has a nine percent growth rate expected over the next decade, which is above the national average for other professions.

Not only do Financial Analysts enjoy high pay for their contributions to their organizations, but they often have travel opportunities. Some organizations’ Financial Analysts travel the world, studying the culture, political condition, regulations, and languages in different countries to better understand the factors that impact investment decisions. Career opportunities are available in many industries, as well as locations for Financial Analysts. These professionals can explore positions in securities firms, insurance companies, banks, pension offices, financial risk management consulting firms, or in-house accounting teams, among others. Career advancement is also another benefit of working as a Financial Analyst. The more experience you gain within an organization, you likely will have options to progress from Junior Analyst to Associate Analyst or even Senior Analyst. 

Another reason a career as a Financial Analyst is a good option is that it offers stable industry growth. Those who enter college must be prepared to eventually search for careers in different market conditions than when they began their study. Although most fields are affected to some extent by market fluctuations, the finance sector typically experiences stable growth, even during periods of rapid economic change. In addition, new financial products are created every day, as well as new investment opportunities. This means new opportunities for Financial Analysts are always available.

Read more about whether Financial Analyst is a good career.

Learn the Skills to Become a Financial Analyst at Noble Desktop

Noble Desktop, an educational provider located in New York City, offers a range of classes devoted to financial modeling and analysis. Financial Modeling Bootcamp is a hands-on, 18-hour course that teaches students fundamental financial concepts, such as corporate valuation, accounting, and finance. Participants in this small class create their own discounted cash flow using Microsoft Excel. Over three days, expert instructors also help students develop a comprehensive financial model for an actual company. As a prerequisite to this bootcamp, students should have intermediate Excel proficiency.

Noble also has a Financial Analyst Training Program that provides expert instruction on timely corporate and financial concepts, such as making a full valuation model. Those enrolled in this intensive program receive instruction on fundamental Excel skills, such as using shortcuts and PivotTables. Advanced Excel techniques are also covered in this 30-hour program, like Goal Seek and cash flow projection tools. All learners also receive instruction on creating a three-statement financial model for a public restaurant company.

In addition to the Financial Modeling Bootcamp and Financial Analyst Training Program, Noble Desktop also has in-person and live online financial modeling training courses. The

Excel Bootcamp offers 18 hours of instruction on core business Excel skills like working with VLOOKUP, INDEX, MATCH, and What-If Analysis for Goal Seek. FinTech courses are also available, like Algorithmic Trading with Python, Python for Data Science Bootcamp, and FinTech Bootcamp. This course provides students with hands-on training from expert instructors in FinTech skills like working with Python and SQL for data analysis, creating machine learning models, and working with different data types like integers, floats, and strings. All students have the option of a free course retake for up to one year, as well as one-on-one mentoring.