How to become a financial analyst

BY Anastassia GliadkovskayaOctober 26, 2022, 10:53 AM
Illustration by Martin Laksman

On and off Wall Street, financial analysts help guide companies to make important business decisions—decisions that could cost millions of dollars. Such responsibility means financial analysts stand to earn nearly six-figure salaries (and up), though their jobs can be grueling, difficult to land, and very competitive to keep.

That said, financial analysts can have a wide range of career options and, potentially, job stability. The job market for financial analysts is projected to grow 9% between 2021 and 2031, according to the U.S. Bureau of Labor Statistics. That’s slightly faster than the average growth rate for all occupations.

“Students shouldn’t assume that the only desirable job is on Wall Street,” explains Christopher Wiese, managing director of credentialing at CFA Institute, adding that there are good financial analyst jobs nationwide. The global organization provides investment professionals with finance education and offers the official Chartered Financial Analyst (CFA) designation. 

Even so, a career as a financial analyst certainly isn’t for everyone, given rigorous testing requirements and the job’s demands. If you are keen to become a financial analyst, the following step-by-step guide is one way to break into this career:

  1. Complete a graduate degree
  2. Get an internship
  3. Obtain the CFA credential
  4. Build your brand

1. Complete a graduate degree

While a bachelor’s degree in business or finance might suffice for some entry-level financial analyst roles, you will need a master’s degree to propel your career and set you apart from your peers. Before you apply to graduate school, it’s prudent to work first, experts agree, because doing so will help you to better understand the financial services industry and what you might eventually want to specialize in as an analyst. And there’s another potential bonus: Some employers offer tuition reimbursement for degrees. 

For people who want to pursue a job in a competitive area, such as at a legacy bank, an Ivy League education will help, but degrees from quality state schools may be more accessible for others. As for degrees, you also have options. While some financial analysts enroll in an MBA program, others opt for a specialized master’s degree in fields like finance, accounting, or analytical finance.

“The master’s program will help you get ahead,” says Emmanuel Hatzakis, who directs the master’s degree program in finance and financial engineering at the Stevens Institute of Technology. 

Whether you opt for accounting or finance, you’ll learn a lot of relevant principles and how to apply them in different situations, Hatzakis notes. “You have the conceptual framework that you can apply regardless of where you’re working,” he adds. “It’s a good launching pad for a lot of careers in the business.” 

Once in school, consider joining a club to hone your skills, such as student-run equity funds. Graduate school is also a good opportunity to network with alumni for potential jobs down the line.

2. Get an internship 

An internship will be “critical” to standing out as a prospective financial analyst, Wiese says. Not only is it valuable practical experience, internships are also a chance to explore finance jobs beyond New York City, where better work-life balance can be found. 

Internships help you get a sense of an environment before looking for a full-time job, adds Hatzakis. And they might fast-track you to a job offer if you prove your worth to an employer. 

“It’s like an extended interview,” Hatzakis says. “An internship can transform you over a summer.”

3. Obtain the CFA credential 

The CFA credential, offered through the CFA Institute, is “an intensely difficult, rigorous program,” per Wiese. It’s made up of three different tests, and passing each level each takes approximately 300 hours of self study, and the ultimate CFA charter is only granted once a participant has accumulated enough work experience. The pass rate for Level I alone is about 40%. 

Because of its status and difficulty, a lot of employers see a CFA-certified candidate as a “kind of de facto indication of being a self-starter and being very driven,” Wiese says. CFA candidates should have a bachelor’s degree (or be working toward one), though there’s no required major to qualify. Most people pursue a CFA after graduating from college, but some people complete it during their final year of undergrad.

“Finance is so competitive, so there’s this drive to get it earlier and earlier to differentiate themselves,” Wiese says of students. 

An alternative is the Chartered Property Casualty Underwriter (CPCU) designation, for those people who specialize in risk management or property-casualty insurance. The best way to prepare for these exams is to plan ahead, according to Sean Andreasson, a lead financial analyst of strategic transactions at Liberty Mutual Insurance. It’s also important to have clear goals and a timeline in mind, which will keep you from feeling overwhelmed. 

“In the beginning, building and maintaining a habit can be difficult,” Andreasson says. “Making a habit out of studying, and keeping to a routine, is the most effective studying strategy you can have.” 

4. Build your brand

When applying to financial analyst positions, consider what else you can bring to the table besides classic finance, Wiese recommends. Maybe you’re a programmer, or maybe you have a science background, for example. Taking a few STEM courses in school could go a long way. 

Sharp writing skills also matter. “If you can’t communicate your ideas in a clear and compelling way you’re not going to tend to advance in the industry,” Wiese says. 

Another way to stand out is by getting up-to-speed early on how to use data terminals like Bloomberg, which are heavily used in the industry. It’s also a good idea to hone your financial modeling skills, which you can do through the Financial Modeling Institute or even for free through Wall Street Prep

And always make sure your resume is aligned with the desired qualifications for a given role. It is also helpful to mention in an application how you came up with solutions to problems in the past. “A financial analyst that can identify pain points, analyze the situation in its entirety, and provide numerous recommendations is always highly valued and sought after,” Andreasson says. 

Finally, remain curious. Ask many questions, pay attention to details, and understand how a company plans to use your analysis, Andreasson explains: “By finding the ‘why,’ you can craft your work to best suit the needs of your stakeholder, making you a valued and trusted financial partner.”

See how the schools you’re considering fared in Fortune’s rankings of the best master’s degree programs in data science (in-person and online), nursing, computer science, cybersecurity, psychology, public health, and business analytics, as well as doctorate in education programs and MBA programs (part-time, executive, full-time, and online).