Job Universe: Financial Analysts

Employment of financial analysts is expected to grow by 34 percent between 2006 and 2016.

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  • The job: Financial analysts (also called securities analysts and investment analysts) assess the economic performance of companies and industries for investment banks, insurance companies, mutual and pension funds, securities firms, the business media, and other businesses, helping them make investment decisions or recommendations. They read company financial statements and analyze commodity prices, sales, costs, expenses, and tax rates in order to determine a company's value and to project its future earnings. They often meet with company officials to gain a better insight into the firm's prospects and to determine its managerial effectiveness.
  • Outlook: Employment of financial analysts is expected to grow by 34 percent between 2006 and 2016, which is much faster than the average for all occupations. Primary factors for this growth are increasing complexity of investments and growth in the industry. Despite overall employment growth, competition for jobs is expected to be keen in these high-paying occupations.
  • Experience: Most companies require financial analysts to have at least a bachelor's degree in finance, business administration, accounting, statistics, or economics. Coursework in statistics, economics, and business is required, and knowledge of accounting policies and procedures, corporate budgeting, and financial analysis methods is recommended. A master's degree in finance or business administration also is desirable. Strong math, analytical, and problem-solving skills are essential qualifications for financial analysts. Depending on an individual's work, many different licenses may be required. The majority of these licenses require sponsorship by an employer, so companies do not expect individuals to have these licenses before starting a job.
  • The not-so-good: Financial analysts may work long hours, travel frequently to visit companies or potential investors, and face the pressure of deadlines. Much of their research must be done after office hours because their days are filled with telephone calls and meetings.
  • Pay: Median annual earnings, including bonuses, of financial analysts were $66,590 in May 2006. The bonuses that many financial analysts receive in addition to their salary can be a significant part of their total earnings. Usually, the bonus is based on how well their predictions match the actual performance of a benchmark investment.

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This information is from the Occupational Outlook Handbook, published by the Bureau of Labor Statistics.