The role of financial analyst, as the name implies, consists of analyzing financial data in order to make decisions, typically relating to investments. For example, a financial analyst may evaluate company fundamentals and then make a recommendation to either buy or sell that company’s stock. Roles within the field of financial analysis vary greatly, but most firms have some version of junior analysts and senior analysts. Experience obviously impacts this discrepancy, but location and education may also have a big impact.
According to the U.S Bureau of Labor Statistics, the entry-level salary for a financial analyst is about $53,000 while the top ten percent of analysts can expect to earn over three times that – about $167,000. What separates the top earners from those at the bottom?
Someone with decades of industry experience obviously has a much better chance of earning more than someone who recently graduated, but other factors also come into play. In order to be considered for a higher-paid financial analyst position, you may need to consider location and educational opportunities.
Not surprisingly, the state with the highest employment level for financial analysts is New York, the home of Wall Street. The mean salary for a financial analyst in New York is about $137,000. This is considerably higher than the national median income for financial analysts, which is only about $86,000.
Though a higher cost of living may impact the higher salaries for New York financial analysts, the bigger impact is likely the high number of major financial firms based in New York. Wall Street attracts some of the most highly educated financial experts from across the country, often recruiting almost exclusively from Ivy League MBA programs.
Receiving an MBA isn’t the only way education can affect compensation and job opportunities for financial analysts. Though there are no specific qualifications exist to become a financial analyst, a Bachelor of Arts is typically required. A bachelor’s in finance or economics is often ideal but depending on the type of financial analysis, other degrees may also be relevant. For example, if you evaluate companies in a specific sector, a degree relevant to that sector may be appropriate.
Other educational opportunities include getting your Series 7 or Series 63. Another option, though a bit more of a time commitment, is the Chartered Financial Analyst (CFA) designation. In order to receive the CFA designation, you must pass three tests. Each part is only offered once a year, which means the designation takes at least three years. Other specialty designations or educational opportunities exist for almost every niche area within financial analysis. Though the difficulty and prestige may vary, any opportunity to further your education may also lead to increased opportunities for higher paying senior positions.
A career as a financial analyst has the potential to be exciting and lucrative. Though the average financial analyst makes considerably more than the national average, it is not the highest paying career in finance, but maybe a stepping stone to the more lucrative financial careers.
About the New York Institute of Finance
The New York Institute of Finance (NYIF) is a global leader in professional training for financial services and related industries. NYIF courses cover everything from investment banking, asset pricing, insurance and market structure to financial modeling, treasury operations, and accounting. The New York Institute of Finance has a faculty of industry leaders and offers a range of program delivery options, including self-study, online courses, and in-person classes. Founded by the New York Stock Exchange in 1922, NYIF has trained over 250,000 professionals online and in-class, in over 120 countries.
See all of NYIF’s training and qualifications here.
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