Financial analysts guide businesses and individuals in decisions about expending money to attain profit. They assess the performance of stocks, bonds, and other types of investments.
Financial analysts guide businesses and individuals in decisions about expending money to attain profit. They assess the performance of stocks, bonds, and other types of investments.
Financial analysts typically do the following:
Financial analysts evaluate opportunities to commit money for the purpose of generating profit.
Financial analysts can be divided into two categories: buy-side analysts and sell-side analysts.
Analysts may work for the business media or other research houses, which are independent from the buy and sell side.
Financial analysts generally focus on trends affecting a specific geographical region, industry, or type of product. For example, they may focus on a subject area or a foreign exchange market. They must understand how economic trends, new regulations, policies, and political situations may affect investments.
Investing has become more global, and some specialize in a particular country or world region. Companies want these specialists to understand the business environment, culture, language, and political conditions in the country or region that they cover.
The following are examples of types of financial analysts:
Financial risk specialists, also called financial risk analysts, evaluate threats to investment decisions and determine how to manage unpredictability and limit potential losses. They make investment decisions such as selecting dissimilar stocks or having a combination of stocks, bonds, and mutual funds in a portfolio. They also make recommendations to limit risk.
Fund managers work exclusively with hedge funds or mutual funds. Both fund managers and portfolio managers frequently make buy or sell decisions in reaction to quickly changing market conditions.
Investment analysts assess information involving investment programs or financial data of institutions, such as business valuation. They also respond to queries from clients and client advisors regarding asset allocation and alternative investment topics including hedge funds, real property, and venture capital.
Portfolio managers select the mix of products, industries, and regions for their company’s investment portfolio. These managers are responsible for the overall performance of the portfolio. They are also expected to explain investment decisions and strategies in meetings with stakeholders.
Ratings analysts evaluate the ability of companies or governments to pay their debts, including bonds. Based on these evaluations, a management team rates the risk of a company or government not being able to repay its bonds.
Securities analysts evaluate securities markets and trends to identify high-yield assets for clients and companies. They may use resources such as bond performance reports, daily stock quotes, market and economic forecasts, and other financial statements and publications.
Financial and investment analysts held about 347,400 jobs in 2023. The largest employers of financial and investment analysts were as follows:
| Securities, commodity contracts, and other financial investments and related activities | 25% |
| Professional, scientific, and technical services | 13 |
| Management of companies and enterprises | 12 |
| Credit intermediation and related activities | 11 |
| Insurance carriers and related activities | 7 |
Financial risk specialists held about 57,500 jobs in 2023. The largest employers of financial risk specialists were as follows:
| Credit intermediation and related activities | 32% |
| Securities, commodity contracts, and other financial investments and related activities | 17 |
| Insurance carriers and related activities | 14 |
| Management of companies and enterprises | 12 |
| Professional, scientific, and technical services | 7 |
Financial analysts work primarily in offices but may travel to visit companies or clients.
Most financial analysts work full time and some work more than 40 hours per week.
Financial analysts typically need a bachelor’s degree to enter the occupation.
Most entry-level positions for financial analysts require a bachelor’s degree; a common field of degree is business. Some employers prefer to hire job candidates who have a master’s degree.
The Financial Industry Regulatory Authority (FINRA) is the main licensing organization for the securities industry. A license is generally required to sell financial products, which may apply to some positions. Because most of the licenses require sponsorship by an employer, companies do not expect individuals to have these licenses before starting a job.
Employers often recommend certification, which may improve the chances for advancement. An example is the Chartered Financial Analyst (CFA) certification from the CFA Institute. Financial analysts can become CFA certified if they have a bachelor’s degree and several years of work experience and pass multiple exams. They also may choose to become certified in their field of specialty.
Financial analysts typically start by specializing in an investment field. As they gain experience, they may become portfolio managers and select the mix of investments for a company’s portfolio. They also may become fund managers of large investment portfolios for individual investors. Having a master’s degree in finance or business administration may improve an analyst’s chances of advancing to one of these positions.
Analytical skills. Financial analysts must evaluate a range of information in finding profitable investments.
Communication skills. Financial analysts must be able to clearly explain their recommendations to clients.
Computer skills. Financial analysts must be adept at using software to analyze financial data and trends, create portfolios, and make forecasts.
Decision-making skills. Financial analysts must reach conclusions so that they can recommend whether to buy, hold, or sell a security.
Detail oriented. Financial analysts must pay attention when reviewing a possible investment, as even small issues may have large implications for its health.
Math skills. Financial analysts use mathematics to estimate the value of financial securities.
Median annual wages, May 2023
The median annual wage for financial and investment analysts was $99,010 in May 2023. The median wage is the wage at which half the workers in an occupation earned more than that amount and half earned less. The lowest 10 percent earned less than $60,830, and the highest 10 percent earned more than $175,840.
The median annual wage for financial risk specialists was $106,090 in May 2023. The lowest 10 percent earned less than $61,090, and the highest 10 percent earned more than $184,330.
In May 2023, the median annual wages for financial and investment analysts in the top industries in which they worked were as follows:
| Securities, commodity contracts, and other financial investments and related activities | $115,480 |
| Professional, scientific, and technical services | 98,840 |
| Management of companies and enterprises | 97,710 |
| Credit intermediation and related activities | 97,240 |
| Insurance carriers and related activities | 89,150 |
In May 2023, the median annual wages for financial risk specialists in the top industries in which they worked were as follows:
| Securities, commodity contracts, and other financial investments and related activities | $128,660 |
| Professional, scientific, and technical services | 111,220 |
| Management of companies and enterprises | 107,780 |
| Credit intermediation and related activities | 103,240 |
| Insurance carriers and related activities | 102,980 |
Fund managers are typically compensated by fees, usually structured as a percentage of assets under management and a percentage of the fund’s annual return.
Most financial analysts work full time, and some work more than 40 hours per week.
Percent change in employment, projected 2023-33
Overall employment of financial analysts is projected to grow 9 percent from 2023 to 2033, much faster than the average for all occupations.
About 30,700 openings for financial analysts are projected each year, on average, over the decade. Many of those openings are expected to result from the need to replace workers who transfer to different occupations or exit the labor force, such as to retire.
Demand for financial analysts generally increases with overall economic activity. These workers will be needed to evaluate investment opportunities when new businesses are established, or as existing businesses expand. In addition, emerging markets throughout the world are providing new investment opportunities, requiring expertise in geographic regions where those markets are located.
Financial analysts also will be needed to assess growing volumes of data. Their analysis will help businesses manage their finances, identify investment trends, reduce risk, and deliver new products or services to clients.
| Occupational Title | SOC Code | Employment, 2023 | Projected Employment, 2033 | Change, 2023-33 | Employment by Industry | ||
|---|---|---|---|---|---|---|---|
| Percent | Numeric | ||||||
SOURCE: U.S. Bureau of Labor Statistics, Employment Projections program | |||||||
Financial analysts | — | 404,800 | 442,800 | 9 | 37,900 | — | |
Financial and investment analysts | 13-2051 | 347,400 | 380,500 | 10 | 33,100 | Get data | |
Financial risk specialists | 13-2054 | 57,500 | 62,300 | 8 | 4,800 | Get data | |
This table shows a list of occupations with job duties that are similar to those of financial analysts.
| Occupation | Job Duties | ENTRY-LEVEL EDUCATION  | 2023 MEDIAN PAY | |
|---|---|---|---|---|
 | Budget Analysts | Budget analysts help public and private organizations plan their finances. | Bachelor's degree | $84,940 |
 | Data Scientists | Data scientists use analytical tools and techniques to extract meaningful insights from data. | Bachelor's degree | $108,020 |
 | Financial Managers | Financial managers create financial reports, direct investment activities, and develop plans for the long-term financial goals of their organization. | Bachelor's degree | $156,100 |
 | Insurance Underwriters | Insurance underwriters evaluate insurance applications and decide whether to approve them. | Bachelor's degree | $77,860 |
 | Personal Financial Advisors | Personal financial advisors provide advice to help individuals manage their money and plan for their financial future. | Bachelor's degree | $99,580 |
 | Securities, Commodities, and Financial Services Sales Agents | Securities, commodities, and financial services sales agents connect buyers and sellers in financial markets. | Bachelor's degree | $76,900 |
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