What is the career path for a financial analyst?

The career path for a financial analyst includes jobs as a junior financial analyst, a portfolio manager, and a fund manager. A financial analyst is a professional that analyzes past and current trends to help create a better financial future for a company or client.

Financial analysts may use financial reports created by accountants to help give guidance to a company on how best to use its resources. Their main objective is to investigate data to identify business opportunities or give investment plans. Senior financial analysts tend to focus on devising investment recommendations more than anything else.

The career path for a financial analyst involves education, specific skills, passing financial exams, certifications, and several different junior and senior financial analyst positions.

The education requirements of a financial analyst typically consist of a bachelor's degree in economics, finance, or statistics. Some choose to get master's degrees in these areas to increase their marketability as candidates in the financial industry.

Here are some of the main skills needed for the financial analyst career path:

• Analytical skills

• Critical thinking

• Presentation skills

• Strong understanding of financial and economic terms

• Financial modeling skills

• An understanding of financial regulations

• Communication skills

• Interpersonal skills

Depending on your specific financial analyst career path you are going to have to take some financial exams.

Most in the field have to pass a number of financial exams after college on their way to becoming professional financial analysts. Here is a brief breakdown of some of the licenses you may need to get and exams you may need to pass:

Here are some of the best certifications for financial analysts:

• Certified Financial Planner (CFP). This certification is for professional financial planners. It proves you are competent in financial planning matters and have integrity and honesty in this field. It is offered by the Certified Financial Planner (CFP) board, and the exam consists of 170 multiple-choice questions. You must have a bachelor's degree or higher to take the exam, as well as 6,000 professional experience or 4,000 hours of apprenticeship experience. Those who take this exam usually already possess at least some experience in general finance principles, risk management, investment planning, and tax planning.

• Certified Fund Specialist (CFS). This certification is offered by the Institute of Business and Finance (IBF) and demonstrates expert-level knowledge and skills in the area of mutual funds and broadly in the financial industry. This is a great certification for those seeking to advance on the financial analyst career path from a mid-level position like financial analyst to a more senior position, such as fund manager. Topics covered in the exam include mutual funds (ETF and REITs), closed-end funds, advanced fund analysis and selection, and asset allocation and portfolio construction. You must have at least a bachelor's degree or 2,000 hours of professional work experience in the financial services industry.

• Certified Financial Analyst (CFA). This certification is offered by the Certified Financial Analyst Institute. It demonstrates competency and expertise in economics, portfolio management, investment analysis, and professional and ethical standards within the industry. This certification is commonly required for those seeking roles in security analysis, asset management, equity analysis, fund management, and hedge fund management, and those seeking executive roles like chief financial officer (CFO), or senior finance managers. You must have at least a bachelor's degree, and four years of experience in the financial services industry.

• Certified Government Financial Manager (CGFM). This certification is encouraged if you want to pursue a financial analyst career path as a federal, state, or local financial analyst or manager. The CGFM certification demonstrates a command of knowledge and skills in these areas. It is offered by the AGA and covers fields such as internal controls, financial reporting, and accounting for government agencies and organizations. You must have a bachelor's degree and at least two years of professional experience in government financial planning. Subjects on the exam include governmental environment, government accounting, financial budgeting and reporting, and government financial management and control.

• Certified International Investment Analyst (CIIA). This certification shows competence and knowledge in portfolio management, economics, corporate finance, equity evaluation, portfolio management, fixed income analysis, and derivative evaluation and analysis. The CIIA certification is offered by the Association of Certified International Investment Analysts (ACIIA) and is definitely one you want to obtain if you want to move up the financial analyst ladder and gain work relating to the global financial community. To gain this certification you must have at least three years of professional experience in portfolio management, financial investment, or financial analysis. You also must be a member of a participating national or regional society and pass all CIIA exams. The three foundational exams cover the topics of portfolio management, economics, and corporate finance.

• Certified Investment Management Analyst (CIMA). This is a great certification if you are looking to pursue a specific financial analyst career path in investing and management. You must have at least three years of professional experience and complete the CIMA educational program to be considered eligible. This requires sitting for a five-hour computer-based exam that covers performance measurement, due diligence, asset allocation, ethics, risk measurement, and investment policy. After passing the exam you must also sign an agreement stating you are going to adhere to the Investments and Wealth Institute's code of professional responsibility.

• Chartered Financial Analyst (CFA). This certification is more for those seeking a financial analyst role in investments, rather than financial planning. Institutional money management and stock analysis are two areas where those obtaining a CFA would benefit. You must have at least three years of professional experience and pass three qualifying exams. Topics covered include economics, ethics, equity investments, corporate finance, financial reporting, derivatives, quantitative methods, and fixed-income types. To obtain and retain your charter, you must also become a member of the CFA Institute.

• Financial Risk Manager (FRM). This certification is offered by the Global Association of Risk Professionals (GARP). It is an internationally recognized credential for risk management in different financial organizations, such as insurance companies, banks, accounting organizations, consulting firms, regulatory agencies, credit agencies, and corporations. You must have at least two years of professional experience in an area that is directly related to risk management. You also must pass a two-part exam and present a management portfolio. Subjects on the exam include the application of risk management methods and tools, risk management concepts, and financial theories.

After an individual passes their financial exams, they then need to determine what type of company or organization they want to work for in a financial analyst capacity. This will also help to determine what certifications you might want to obtain.

This is a broad field and can include many different job titles and career paths. That being said, here are the three main types of companies a financial analyst can work for:

• Investment banks

• Buy-side firms (These are investment firms that manage their own funds)

• Sell-side firms

Some who start out as junior financial analysts choose to go back to graduate school for advanced degrees, after working for several years in the industry. Junior financial analysts can advance, however, many roles with greater responsibilities in the field require junior analysts to obtain a master's degree.

Financial analysts with master's degrees can often get positions as senior financial analysts or work their way up the ladder into this position very quickly.

Senior financial analysts then gain several years of experience in this role before attempting to obtain a supervisory position. A senior financial analyst in the securities industry often goes on to become a portfolio manager or fund manager, where they oversee a team of senior financial analysts.

From here, some have the opportunity to advance even further on the financial analyst career path, into senior management roles. These types of positions include treasury manager, chief financial officer (CFO), and chief investment officer (CIO).

These last two roles are at the pinnacle of the financial analyst career path and are responsible for all of a company or organization's financial activities.