How to become a finance analyst

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A financial analyst works with data and information, so if you like getting lost in the finer details of a project then you’ll find plenty here. The role requires examining current and historical financial data and observing patterns within it to help build financial plans for the future. These projections and analysis reports are used by all sorts of organisations globally, including commercial businesses, governments and non-profit organisations. Because the financial world is such a vast and complex system, you’ll most likely end up developing a speciality in a particular area, in which you can build a career pathway.

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What does a finance analyst do?

Charts, graphs, and tables, right? Well actually, yes, and so much more. As a finance analyst, you’ll be responsible for a wide variety of research tasks which help your clients or employer to make investment decisions. The job involves a lot of data-oriented work, and you’ll need to be good at maths and have other analytical abilities like IT skills and critical thinking.

To be a good finance analyst, you’ll need to build a strong knowledge of the industry, and the many markets which comprise it. You must understand how different areas of the industry are connected and be well informed about the very latest changes and developments taking place. After all, your clients are relying on you to advise them on what decisions to make for the future.

Some of the responsibilities which finance analysts perform on a weekly basis are:

Organising information using database softwares
Interpreting data using a range of advanced analytical tools
Building financial and statistical models
Forecasting and making projections
Giving recommendations for financial decision making
Working to exact deadlines
Risk analysis
Presenting data to colleges and clients
Staying updated with economic news and wider world events

What’s it like to work as a finance analyst?

As a junior analyst, you’ll likely be working in a financial institution such as a bank, or investment company. Jobs are largely office-based, and your work will alternate between meetings with colleagues and clients, and periods of highly focused individual tasks.

You’ll collect data, organise it, and then build financial models to interpret the information. You’ll then be applying what you’ve learnt to your client’s brief, which could involve generating higher profits, reducing complexity, assessing whether an investment deal is viable, identifying opportunities or potential hazards, and a multitude of other factors and variables.

It’s essentially data science applied to finance, and your work is defined less by the laws of the universe and more by the intricate relationships between resource management, commerce, technology and geopolitics. Fascinating stuff.

At an investment company, your colleagues might include mortgage brokers, accountants, auditors, fund managers, lawyers and financial business partners, each working their specialism within the company to form a well-oiled machine. Working as an analyst in government institutions can involve managing the budget, monitoring taxes, identifying fraud, allocating resources, and providing consultancy services to other organisations.

What skills do you need to be a finance analyst?

Finance analysts need many different skills, ranging from highly logic-based technical work to good communication and networking abilities. Finance can be a highly specialised field, so in addition to these generalised skills, analysts will often develop a niche skill set which helps them to carve a career pathway through the profession. Transferable skills which all analysts will need include:

Numerical and accounting skills
Strong interpersonal communication
Effective research and data collection skills
Problem solving and critical thinking
Pattern recognition skills
IT and advanced software competencies
Decision making skills
Management and leadership abilities
High financial literacy
Presentation skills

How much does a finance analyst earn?

The good news is that finance analysts make very good money, and at the top end of the profession, salaries can be nothing short of lucrative.

In the UK, an entry level analyst starts at around £26,000 per year. After a few years of experience, the average salary is about £45,000, but this depends on the financial sector, professional specialism, and company location. Salaries can go up to around £75,000.

Other benefits include allowances like private medical insurance and pension schemes, and it’s usual that if certain targets are met, an individual can expect a salary increase each year.

On top of this, many positions earn performance-based commissions for successful investments and meeting various quotas. Some companies give yearly bonuses and other financial incentives so when you factor in all these things, the sky’s the limit.

How to become a finance analyst

You may be surprised to know that unlike many other high-flying careers such as lawyers, doctors and architects, the qualifications you need to become a finance analyst are not as well-defined.

In theory there are no professional minimum qualifications, although it must also be said that despite this, most employers will ask for a solid undergraduate degree in a relevant subject area to get started. Due to its high salary expectations, finance is a popular career pathway and the market for analysts is very competitive.

A bachelor’s degree in finance, economics, statistics or accounting is the most applicable route to take, although in many cases it is preferable to have a Master's degree in the bag, since the industry is so competitive. Interestingly, STEM graduates often manage to successfully transfer to finance analyst roles due to their advanced data analysis skills and specialist knowledge within their subject area. Internships and work experience are an accepted part of the journey, and getting a few of these under your belt before you finish your degree will stand you in good stead.

The gold standard of financial qualifications is the Master's of Business Administration (MBA), which enhances your professional credentials, and opens the door to a wide range of job opportunities.

Top univesities for finance and accounting

Want to know which unis have great courses for accounting and finance? Complete University Guide's Subject League Tables can help! Check out the top five accounting and finance universities here...