How To Become A Financial Analyst (With Skills And Salary)

By Indeed Editorial Team

Published 15 May 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Candidates interested in the performance of stocks and market trends typically have the option to become financial analysts. Financial analysts can work for different organisations such as insurance companies and help them with making investment strategies. Understanding the duties and responsibilities of a financial analyst can help you decide if this is the right career option for you. In this article, we discuss how to become a financial analyst, see their average salaries and understand their duties and essential skills.

How to become a financial analyst

Knowing how to become a financial analyst can help you understand the requirements and prepare better to start your career. Here are the steps you can follow to become a financial analyst:

1. Earn a bachelor's degree

Earning a bachelor's degree can be the first step towards becoming a financial analyst. You can pursue courses relevant to the field of finance, such as economics and statistics. Pursuing a more specific degree can help you gain a basic understanding of finance. Bachelor's degrees in business, accounting, economics or maths can be beneficial, as these provide theoretical knowledge relevant to finance careers.

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2. Get relevant certifications

After completing a bachelor's degree, many candidates try applying for jobs in investments, banking firms and accountancy. Getting relevant certifications can be helpful in advancing your career. Many companies provide financial products depending on certain rules and regulations of the state. These companies often hire financial analysts with appropriate certifications.

You can apply for certifications like Chartered Financial Analyst (CFA) certification or Certified Investment Management Analyst (CIMA). Financial analysts who want to get these certifications usually require a bachelor's degree in accounting and finance, a minimum of 4 years of field experience and qualifying scores in entrance examinations.

3. Gain job experience

With the right educational qualification and required certifications, you can apply for financial analyst roles. Many companies hire financial analysts with some relevant work experience. Having experience in the field of finance or any relevant industry can make you distinctive from candidates with no field experience.

Candidates with little to no experience can try enrolling in an online financial analyst training program as it can help in providing a good start to their careers. During these training programs, you can learn new and useful skills. With experience, financial analysts can learn the practical use of accounting and finance skills, along with basic computer skills.

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4. Advance your career with a master's degree

Earning a master's degree can also help financial analysts in advancing to higher job roles. Pursuing a master's degree course can be a great way to improve your knowledge and gain more understanding of the industry. It can make your resume look more appealing to the recruiters during the hiring process. Many candidates pursue a master's degree in business administration (MBA).

To enrol in a master's degree, some of the reputed universities require candidates to pass their bachelor's degree with qualifying marks. Pursuing a master's degree can allow you to learn advanced financial accounting and reporting, strategic analysis, advanced methods of auditing and other core values of finance. With a master's degree, you may become eligible to apply for more advanced and permanent job roles.

Essential skills to become a financial analyst

There are certain skills that financial analysts can develop by gaining experience and exposure to the finance world. Here are some important skills that financial analysts can develop to become proficient in their profession:

Mathematical skills

Mathematical skill is one of the most valuable skills that financial analysts may require throughout their career. It allows them to effectively estimate the values of financial securities and read financial statements. With mathematical skills, you may be able to read and interpret financial documents such as balance sheets and statements of income efficiently.

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Corporate finance

Corporate finance involves managing and making decisions related to funding sources, making investments and structuring capitals. Financial analysts help companies to issue equities in the form of shares, and debts in the form of bonds for expanding their business plans. Financial analysts with great corporate finance skills can understand the company and its budgeting plans. Becoming skilled at corporate financing may require certain qualities, such as interpersonal abilities, accounting knowledge and relevant experience in management.

Financial modelling

Having a deep understanding of financial modelling allows financial analysts to make a digital representation of the company's financial performance. Financial modelling can help companies to make the right investment decisions because it involves the study of both the historical and expected future performance of the business. You can develop and improve your financial modelling skills by improving attention to detail skills and learning to distribute large amounts of data into smaller parts. Learn how to apply different financial concepts such as investing, budgeting and financial management.

Technical analysis

Financial analysts use technical analysis to forecast the fluctuations and movements related to the price of a financial entity, like stocks and bonds. It helps them to analyse past and current price patterns using which they can make a fair estimation for the future price movements. Technical analysis allows financial analysts to lead financial operations, including developing business plans and financial valuation.

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Accounting skills

Gaining accounting skills can help financial analysts with cost analysis, budget calculation, documenting finance statements and managing cash flow. Learn basic accounting principles and techniques. Candidates can also pursue a certification course in accounting and gain a basic understanding of relevant formulas and accounting program. It can help financial analysts collect data from financial statements and create financial reports. Hiring managers may ask candidates questions related to accounting and assess their competency as financial analysts. Learning accounting skills can help candidates show their expertise while answering any industry-related question.

Soft skills

You may require several soft skills to become a proficient financial analyst. For this, you can work on improving your critical thinking, time management, research and analysis, verbal and written communication skills. Critical thinking skills can allow you to use logical thought processes so that you can make well-reasoned decisions. Financial analysts with great time management skills know how to make their working hours more productive. Research and analysis skills can help you collect and investigate gathered data and find ideas and decisions to strengthen the systems.

What does a financial analyst do?

From collecting and gathering data to organising information from historical results, a financial analyst is responsible for a wide range of activities. As a financial analyst, your daily job may include generating models, presentations and reports. Financial analysts typically have a strong compliance and accounting background, which allows them to predict future results based on historical financial data. They propose new policies or make necessary improvements in existing policies. Financial analysts are also responsible for analysing past and present financial data.

Making presentations is also an important duty that a financial analyst performs regularly. They perform analysis in spreadsheet software and then convert it into charts and graphs, providing ideas for improvements based on current trends in the financial performances of a company. They coordinate with finance and accounting team members and create financial models and forecasting. Determining the company's valuation by examining financial statements can also be a part of a financial analyst's job role.

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Average salary of a financial analyst

The average salary of a financial analyst is ₹4,29,188 per year. This salary may vary depending on the type and size of the company. The salary of financial analysts also depends on their skills, experience and geographic location.

Financial analysts can have different salaries in different industries. The starting salary of a financial analyst may depend on their education level and skills. Candidates can pursue a higher degree, such as MBA, and increase their starting salary. Financial analysts working in government organisations can expect some additional benefits, like housing allowance and medical benefits, along with their basic salary structure.

Salary figures reflect data listed on Indeed Salaries at the time of writing. Salaries may vary depending on the hiring organisation and a candidate's experience, academic background and location.

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