Financial Analyst Job Description, Skills, and Salary
Get to know about the duties, responsibilities, qualifications, and skills requirements of a financial analyst. Feel free to use our job description template to produce your own. We also provide you with information about the salary you can earn as a financial analyst.
Who is a Financial Analyst?
Undoubtedly, the roles of a financial analyst are one of the most coveted or sought-after positions in the financial service sector or industry. This is because every venture and endeavor in life involves finances; whether it’s a business, a government parastatal, a non-governmental organization, or a company, we all need a financial analyst to help guide and direct us on how to make the best use of our finances. However, the role of a financial analyst is not restricted to finances alone; they are also responsible for poring over data aimed at identifying opportunities and evaluating outcomes to enhance investment recommendations or business decisions. Being a unique niche that presents numerous career opportunities, the financial analyst can comfortably work in both senior and junior capacities in an organization. It is important to note that the financial service industry is extremely competitive and hard to penetrate; hence, you must be fully prepared and well-equipped to become a successful financial analyst.
There are differences in the duties of junior and senior financial analysts; the junior financial analyst is focused on gathering lots of data, spreadsheet maintenance, and financial modeling. In contrast, the senior financial analyst often concentrates on marketing ideas, speaking with investors and management staff, and investing theses. Generally, all financial analysts regardless of rank should be able to examine financial data and use their discoveries to aid organizations or individuals to make excellent business decisions. In most cases, the results of the analysis are intended to inform the organization’s investing decisions. Other activities carried out by the financial analyst include researching economic (micro and macro) conditions and the fundamentals of the company to predict sectors, companies, and businesses. In addition, a financial analyst can recommend an action plan to the company like selling or buying of stocks based on the overall outlook or performance for instance.
As a financial analyst, you must be acquainted and cognizant of the recent developments and innovations in the field; as well as prepare financial models that can forecast impending economic conditions for different variables. Though most financial analyst examines the bond or stock markets to help their organization to make the right investment, others can be employed by firms to identify the efficiency of several marketing techniques relative to cost using numerically available data. Organizations that go into franchising also make use of a financial analyst; the analyst tracks groups of or individual franchises within a given area, location, or geographical region. Financial analysts make loss and profit predictions by recognizing and identifying the company’s strengths and weaknesses.
With increasing growth in financial and business markets, companies are consistently interested in hiring highly skilled and qualified financial analysts to provide financial intelligence and know-how for their businesses or firms. There have been reports that by 2026, the demand for financial analysts might outgrow the demand for professionals in other fields. Hence, “make hay while the sunshine” if you are interested in a career as a financial analyst in the financial services sector.
Several definitions of a financial analyst have sprung up; however, a financial analyst can simply be defined as a professional or group of professionals that undertake financial analysis for internal and external clients or customers as a core feature of the job. A financial analyst can also be referred to as a security analyst, a research analyst, a rating analyst, an investment analyst, or an equity analyst. Being an important or broad position, the financial analyst does not focus on investments and valuations alone; in banking, the financial analyst is tasked with the responsibility of managing finances and risk management.
Types of Financial Analysts
Since the endeavor of financial analysis is extensive, there are a variety of job titles and career pathways. A financial analyst can either be one of the following;
Sell-side financial analyst: A sell-side financial analyst evaluates and compares the quality of securities in a given sector or industry. After the analysis, they proceed to write research reports within certain endorsements such as sell, hold, or strong sell. In addition, a sell-side financial analyst tracks the stock that is in a fund’s portfolio to ascertain when the stock’s position in that stock should be sold.
Buy-side financial analyst: Arguably, most financial analysts work as buy-side analysts. As buy-side financial analysts, they assist their bosses to make the right decisions on how to spend their money by buying income properties, allocating marketing funds, or investing in stocks. However, a buy-side financial analyst rarely decides how their clients or employers spend their money.
Investment banking and equity financial analyst: An investment bank financial analyst is entrusted with the responsibility of determining if certain deals between organizations are feasible or not; based on corporate fundamentals. They evaluate up-to-date financial conditions and rely greatly on modeling and forecasting to make recommendations.
Financial Analyst Job Description
Below are the financial analyst job description examples you can use to develop your resume or write a job description for your employee. The employer can use it to sieve out job seekers when choosing candidates for interviews.
Enumerated below are the job descriptions of a financial analyst;
- Present reports on the financial performance of firms and businesses.
- Prepare for regular leadership reviews.
- Use your skills and experience to carry out reporting, operational metrics, and financial forecasting.
- Work closely with the accounting unit to enhance accurate financial reporting.
- Create financial models for decision-making by analyzing financial data.
- Evaluate past results, analyze variance, make recommendations, and identify trends for improvements.
- Compare and analyze actual results with forecasts and plans to evaluate the financial performance of an organization.
- Increase the cost evaluation and analysis process through the establishment and enforcement of procedures and policies.
- Guide the analysis of trends, forecasts, and innovations and suggest activities or actions for optimization.
- Suggest actions to analyze and interpret data and make a comparative analysis.
- Emphasize proposed changes in materials and methods.
- Drive and guide process improvements to include the creation of standard, ad-hoc reports, tools, and excel dashboards.
- Stimulate productivity and growth by evolving automated reporting and forecasting tools.
- Implement valuation comp, data mining, business intelligence, and market research.
- Maintain and sustain a strong financial analysis foundation centered on creating models or forecasts.
- Increase financial performance via analysis of forecasts, financial results, trends, and variance.
- Reconcile existing transactions through cross-referencing of income and outgoing data.
- Develop suggestions to be presented to executives and management.
- Assist the business or organization with the planning process for budgeting or expenditure.
- Create financial models to promote forecasting, valuation, and planning.
- Conduct comparable analysis and market research to back up internal financial analysis.
- Maintain current technical knowledge of financial instruments, trends, and market conditions.
Qualifications
When compared to other careers, the financial service sector doesn’t have a specific educational minimum requirement; the process is well-defined and less rigid. Depending on your location or employer, you may be required or mandated to present a license to practice. You will need experience, skills, and some education qualifications which will be enumerated below;
- A bachelor’s degree: To become a successful financial analyst, the individual will need to enroll for, pass, and be awarded a bachelor’s degree in finance, statistics, or economics. Over time, this has become a de-facto requirement for a career in financial services. Similarly, a bachelor’s degree in mathematics, accounting, and even engineering is acceptable to some employers and businesses depending on their specific needs. Due to the increasing competition in the field, anything less than a bachelor’s degree might put you at a disadvantage.
- Master’s in Business Administration Degree: Unless you graduated with a first-class or equivalent, some employers prefer to hire candidates with a Master’s in Business Administration degree. Such employers believe that an MBA gives the candidate more technical ability, expertise, and knowledge. An advantage of having a Master’s in Business Administration degree is that it qualifies you for the role of a senior financial analyst compared to candidates or graduates with bachelor’s degrees who mostly occupy the position of junior financial analyst.
- Experience: To be a financial analyst, you will need a level of experience; this can be accrued through industrial training, internship, and on-the-job training and learning. Ideally, a junior financial analyst should have 0-3 years of experience on the job including internship or industrial training. Also, such individuals should present high proficiency in financial modeling techniques and be fluent and conversant with excel formulas and functions. You should possess the good business acumen to be able to analyze and gather data. For a senior financial analyst, the experience range is at least 3-5 years preferably in business finance. Any other related or relevant experience can go as well. An MBA is a bonus; so too proven work experience in a quantitatively heavy position.
Essential Skills and Qualities
Obtaining a finance degree (bachelor’s or MBA) and working towards becoming a financial analyst requires the development of skills, expertise, and specific abilities. With the growing competition in the field, prospective and potential financial analysts may need to harness their natural tendency and ability to organize and analyze to boost their skills. Below are some of the skills needed to have a successful career as a financial analyst;
Time management skills: Time management is the ability to use your time productively and efficiently. In other words, time management is the art and process of having time to do everything that you need without feeling stressed about it. It sounds simple, but it is much harder to practice. To become a good financial analyst, you should be able to work productively and prioritize your time; you should be able to distinguish between the urgent and important needs of your client or employer. Urgent financial needs of the organization are those that demand immediate attention, while important financial tasks matter, and not doing them may have serious consequences for the analyst and organization at large.
Interpersonal communication skills: This is the exchange of information between two or more people. It is an area of research that seeks to understand how humans use verbal and nonverbal cues to accomplish several personal and relational goals. Financial analyst comes in contact with many people during their work; therefore, they should have the ability to exchange information and understanding effectively with them. You might be required to make presentations to executives and management sometimes; having excellent interpersonal communication skills will come in handy.
Analytical skills: Analytical skill is the ability to deconstruct information into small categories to conclude. Analytical skill consists of categories that include logical reasoning, data analysis, and research. This is an important skill to have as a financial analyst; remember, you will potentially advise businesses or companies on the right investment to make. Since the profession involves working with large and conflicting financial data, the analysts must be able to carefully dissect and recommend the best possible outcome.
Critical thinking skills: Critical thinking is the ability to analyze facts to form a judgment. In other words, critical thinking is the rational, unbiased, and skeptical analysis or evaluation of factual evidence. Critical thinking is self-directed, self-monitored, self-disciplined, and self-corrective. It presupposes assent to rigorous standards of excellence and mindful command of their use. A financial analyst must be able to make well-reasoned judgments based on logical thought processes.
How to Become a Financial Analyst
According to research, individuals who strive to be financial analysts are natural planners; they can evaluate, compare and contrast facts, and infer judgments. They can pass resolutions from what they’ve learned. When concluding, they create charts, compare the pros of different choices, and plot graphs to represent data. However, the steps to become a financial analyst include;
Earn a bachelor’s degree: This is often the first and most important step in becoming a financial analyst; it sets the tone towards achieving your goals. A bachelor of science in financial service is advisable though some other fields such as economics, accounting, or statistics can suffice.
Attain licensing or certifications: While additional certifications and licensing may not be necessary at the beginning of your work, they will come into play later on in your career. Licenses and extra certifications are needed for a higher and advanced career in financial services. Moreover, any firm or organization providing financial products for sale must comply with specific regulations to protect consumers from fraudulent or unfair practices. Some financial analysts’ position involves the sale of financial products and depending on the location, licensing is paramount.
Build on-the-job- experience: Definitely, it is crucial to obtain the right education and required licensing and certification. Beyond that, prospective financial analysts need to get work experience in the financial industry as early as possible and work their way up.
Where to Work?
Financial analysts are employed by the following
- Mutual and pension funds, hedge funds, and banks.
- Investment banks, insurance companies, or private clients.
- Research institutes, sales and trading, and commercial banks.
- Financial planning institutions.
- Government regulatory firms.
- Portfolio management providers.
- Investment advisory firms.
Financial Analyst Salary Structure
The salary structure of financial analysts typically covers transportation, health, and other benefits. Depending on experience, skills, and position, the average monthly salary of a financial analyst is 427,000 NGN. That is 205, 000 NGN and 670,000 NGN for junior and senior financial analysts respectively.