Bureau of Labor Statistics

Financial Analysts

financial analysts image
Financial analysts recommend individual investments and collections of investments, which are known as portfolios.
Quick Facts: Financial Analysts
2020 Median Pay $83,660 per year
$40.22 per hour
Typical Entry-Level Education Bachelor's degree
Work Experience in a Related Occupation None
On-the-job Training None
Number of Jobs, 2020 492,100
Job Outlook, 2020-30 6% (As fast as average)
Employment Change, 2020-30 31,300

Summary

What Financial Analysts Do

Financial analysts guide businesses and individuals in decisions about expending money to attain profit.

Work Environment

Financial analysts work in offices. Most work full time, and some work more than 40 hours per week.

How to Become a Financial Analyst

Financial analysts typically need a bachelor’s degree to enter the occupation.

Pay

The median annual wage for financial analysts was $83,660 in May 2020.

Job Outlook

Employment of financial analysts is projected to grow 6 percent from 2020 to 2030, about as fast as the average for all occupations.

About 41,000 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.

State & Area Data

Explore resources for employment and wages by state and area for financial analysts.

Similar Occupations

Compare the job duties, education, job growth, and pay of financial analysts with similar occupations.

More Information, Including Links to O*NET

Learn more about financial analysts by visiting additional resources, including O*NET, a source on key characteristics of workers and occupations.

What Financial Analysts Do

Financial analysts
Financial analysts work in banks, pension funds, insurance companies, and other businesses.

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.

Duties

Financial analysts typically do the following:

  • Recommend individual investments and collections of investments, known as portfolios
  • Evaluate current and historical financial data
  • Study economic and business trends
  • Examine a company’s financial statements to determine its value
  • Meet with company officials to gain better insight into the company’s prospects
  • Assess the strength of the management team
  • Prepare written reports

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.

  • Buy-side analysts develop investment strategies for companies that have a lot of money to invest. These companies, called institutional investors, include hedge funds, insurance companies, independent money managers, nonprofit organizations with large endowments, private equity firms, and pension funds.
  • Sell-side analysts advise financial services sales agents who sell stocks, bonds, and other investments.

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.

Work Environment

Financial analysts
Financial analysts may work at institutions that are based in large cities.

Financial analysts held about 492,100 jobs in 2020. The largest employers of financial analysts were as follows:

Securities, commodity contracts, and other financial investments and related activities 18%
Credit intermediation and related activities 14
Professional, scientific, and technical services 11
Management of companies and enterprises 11
Insurance carriers and related activities 7

Financial analysts work primarily in offices but may travel to visit companies or clients.

Work Schedules

Most financial analysts work full time and some work more than 40 hours per week.

How to Become a Financial Analyst

Financial analysts
Financial analysts must process a range of information in finding profitable investments.

Financial analysts typically need a bachelor’s degree to enter the occupation.

Education

Most entry-level positions for financial analysts require a bachelor’s degree. Appropriate fields of study include accounting, business, economics, finance, mathematics, and statistics. Some employers prefer to hire applicants who have a master’s degree.

Licenses, Certifications, and Registrations

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.

Advancement

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.

Important Qualities

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.

Pay

Financial Analysts

Median annual wages, May 2020

Financial and investment analysts, financial risk specialists, and financial specialists, all other

$83,660

Financial specialists

$73,840

Total, all occupations

$41,950

 

The median annual wage for financial analysts was $83,660 in May 2020. 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 $48,760, and the highest 10 percent earned more than $159,560.

In May 2020, the median annual wages for financial analysts in the top industries in which they worked were as follows:

Securities, commodity contracts, and other financial investments and related activities $98,850
Professional, scientific, and technical services 86,300
Management of companies and enterprises 86,000
Insurance carriers and related activities 82,190
Credit intermediation and related activities 79,270

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.

Job Outlook

Financial Analysts

Percent change in employment, projected 2020-30

Total, all occupations

8%

Financial and investment analysts, financial risk specialists, and financial specialists, all other

6%

Financial specialists

5%

 

Employment of financial analysts is projected to grow 6 percent from 2020 to 2030, about as fast as the average for all occupations.

About 41,000 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.

Employment

A growing range of financial products and the need for in-depth knowledge of geographic regions are expected to lead to employment growth.

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.

Demand also is projected to increase as big data and technological improvements allow financial analysts to conduct high-quality analysis. This analysis will help businesses manage their finances, identify investment trends, and deliver new products or services to clients.

Employment projections data for financial analysts, 2020-30

SOURCE: U.S. Bureau of Labor Statistics, Employment Projections program

Occupational Title

Financial and investment analysts, financial risk specialists, and financial specialists, all other

SOC Code13-2098
Employment, 2020492,100
Projected Employment, 2030523,400
Percent Change, 2020-306
Numeric Change, 2020-3031,300
Employment by IndustryGet data

State & Area Data

Occupational Employment and Wage Statistics (OEWS)

The Occupational Employment and Wage Statistics (OEWS) program produces employment and wage estimates annually for over 800 occupations. These estimates are available for the nation as a whole, for individual states, and for metropolitan and nonmetropolitan areas. The link(s) below go to OES data maps for employment and wages by state and area.

Projections Central

Occupational employment projections are developed for all states by Labor Market Information (LMI) or individual state Employment Projections offices. All state projections data are available at www.projectionscentral.com. Information on this site allows projected employment growth for an occupation to be compared among states or to be compared within one state. In addition, states may produce projections for areas; there are links to each state’s websites where these data may be retrieved.

CareerOneStop

CareerOneStop includes hundreds of occupational profiles with data available by state and metro area. There are links in the left-hand side menu to compare occupational employment by state and occupational wages by local area or metro area. There is also a salary info tool to search for wages by zip code.

Similar Occupations

This table shows a list of occupations with job duties that are similar to those of financial analysts.

Occupation Job Duties ENTRY-LEVEL EDUCATION 2020 MEDIAN PAY
Budget analysts Budget Analysts

Budget analysts help public and private organizations plan their finances.

Bachelor's degree $78,970
Financial managers 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 $134,180
Insurance underwriters Insurance Underwriters

Insurance underwriters evaluate insurance applications and decide whether to provide insurance, and under what terms.

Bachelor's degree $71,790
Personal financial advisors Personal Financial Advisors

Personal financial advisors provide advice to help individuals manage their finances and plan for their financial future.

Bachelor's degree $89,330
Securities, commodities, and financial services sales agents Securities, Commodities, and Financial Services Sales Agents

Securities, commodities, and financial services sales agents connect buyers and sellers in financial markets.

Bachelor's degree $64,770

Contacts for More Info

For more information about licensure for financial analysts, visit

Financial Industry Regulatory Authority (FINRA)

For more information about training and certification, visit

CFA Institute

For more information about certifications in financial analysis, visit

Global Academy of Finance and Management

CareerOneStop

For a career video on financial analysts, visit

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Last Modified Date: Wednesday, September 8, 2021

Suggested citation:

Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Financial Analysts,
at https://www.bls.gov/ooh/business-and-financial/financial-analysts.htm (visited November 24, 2021).

Telephone: 1-202-691-5700 www.bls.gov/ooh Contact OOH

View this page on regular www.bls.gov

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