How to Become a Financial Analyst?: A Comprehensive Guide
The employment prospects for Financial Analysts are promising with a consistent projected growth rate over the next decade. This is attributed to the predicted rise in economic activity and the emergence of industries that demand expertise in finance. The increasing demand for this role makes now the best time to consider a career in financial analysis. Starting a career in finance analysis requires a combination of strategic thinking, financial knowledge, and analytical prowess. In the following sections, we will explore the fundamental procedures of how to become a financial analyst and successfully pursue a career as a financial analyst in this guide.
Who is a Financial Analyst?
A financial analyst is a skilled individual who performs financial analysis for either external or internal clients as an essential aspect of their job. This position may also be referred to as securities analyst, research analyst, equity analyst, investment analyst, or rating analyst.
The three main types of analysts in the financial and investment sectors are:
- Buy-Side Analysts: These professionals assist their employers in making financial decisions, such as investing in securities for an internal fund or purchasing income-generating properties (in the context of a real estate investment company).
- Investment Bank Analyst: In investment banking firms, analysts are responsible for evaluating the feasibility of various deals between companies, such as initial public offerings (IPOs) and mergers and acquisitions (M&A), by considering corporate principles.
- Sell-Side Firm Analyst: They assess the quality of securities within a specific sector or industry. Subsequently, they use these assessments, to generate research report suggestions for industries, such as “purchase,” “trade,” “highly recommend buying,” “strongly advise selling,” or “maintain.”
How to Become a Financial Analyst with No Experience?
Here are effective strategies for becoming a finance analyst:
Step 1: Pursue B.Sc in Finance/Related Course
To be considered for a financial analyst role, it is necessary to possess at least an undergraduate degree. Employers tend to favor individuals who have studied subjects such as economics, finance, or accounting. These fields of study provide candidates with comprehensive knowledge in areas such as business operations, financial management, and investment strategies, equipping them with the skills needed for success in this field.
Step 2: Acquire Relevant Certifications
It is possible to become an entry-level financial analyst without a certification, however, it would be beneficial to obtain one to enhance your chances of securing a good job. Employers tend to favor candidates who show dedication and knowledge in the field by obtaining relevant certifications. Moreover, it is common for employers to advise financial analysts to obtain the Chartered Financial Analyst (CFA) credential from the CFA Institute. This extra certification can greatly enhance financial analysts’ opportunities for career advancement. Consider getting certified in business analysis by taking this business analysis course.
Step 3: Attain on the Job Experience
Numerous universities provide internship opportunities aimed at enhancing your abilities as a financial analyst. It would be beneficial to explore both paid and unpaid options at organizations that align with your interests. For example, you could secure an internship position at a bank, insurance firm, or real estate investment brokerage. Make the most of this experience by treating it as both a job and a chance to learn and grow professionally.
Also Read: Financial Analyst Interview Questions and Answer
Step 4: Pursue a Master’s Degree
Although practical experience is crucial, financial analysts have an alternative to enhance their resumes by opting for further education. While most pursue a general Master of Business Administration (MBA), others may consider obtaining a Master of Science in Accounting degree as an additional leverage in the competitive job market.
Step 5: Build the Skills Needed to be a Finacial Analyst
Consider using the knowledge and experience gained from your education and internships to enhance your abilities on an individual level. One approach could be creating a finance blog, where you can showcase your writing skills, connect with potential employers, and sharpen communication of your investment concepts to a larger audience.
Below are some of the major skills to build as an analyst:
- Financial Modeling and Valuation
- Data Analysis
- Financial Reporting
- Budgeting and Forecasting
- Risk Management
- Excel Proficiency
- Attention to Detail
- Communication Skills
- Business Acumen
- Problem-Solving
- Adaptability
- Time Management
Tips to Become a Financial Analyst
How to become a financial analyst with no experience? Below are relevant tips to guide you in retaining a position as an entry-level finance analyst.
1. Create Mock Portfolios Using a Trading Stimulator
By utilizing trading simulators, individuals can fully engage with the finance industry. Numerous virtual stock trading platforms are available for graduates to create simulated portfolios.
These digital resources allow users to gain experience in assessing market trends and conditions. In addition to honing one’s abilities, these exercises contribute to developing a strong resume.
2. Create an Active Online Presence
Starting a finance blog allows you to share your investment insights with a wider audience. Creating informative posts about financial topics on your blog presents the perfect platform to showcase your understanding of the industry and engage potential employers.
Possessing essential skills in finance and investments will enhance the quality of your published articles, giving you an advantage as a writer in this field.
3. Network
When it comes to becoming a financial analyst, the key sometimes lies in your connections. Therefore, networking is crucial for getting into the field. Utilizing social media or online networking platforms can aid in expanding your network and connecting you with new employers and professionals.
4. Build Your Portfolio
Having a well-crafted portfolio is crucial for Financial Analysts during the job search. The contents of your portfolio and its presentation can effectively showcase your academic and professional background. The objective of a portfolio is to present a compelling narrative that will capture the interest of potential employers.
5. Apply to Jobs
Before applying to jobs and submitting your application for entry-level financial analyst roles, it is important to ensure that your resume is well-prepared. Despite lacking relevant work experience in this field, you can showcase your abilities by emphasizing your educational background and internships. Additionally, consider applying for entry positions and jobs for freshers in the finance industry.
Conclusion
The first step to becoming an analyst in business or finance is understanding how to become a financial analyst. Becoming a financial analyst is a journey that requires a combination of education, experience, and ongoing skill development. By developing a solid academic background and obtaining hands-on training, one can effectively pursue a career as a successful financial analyst. If this blog was helpful to you, leave us your thoughts in the comment section below. Also, read the best resume format tips to update your resume financial analyst resume.
