Your path to becoming a financial analyst
Financial analysts are also known as equity analysts, securities analysts and investment analysts. These careers can lead you through banks, governments, insurance companies, financial planning agencies, investment advisers and portfolio managers.
Whether you’re planning to move up in the financial sector or switch careers from anywhere else into finance, here’s what you need to know to become a financial analyst.
What is a financial analyst?
Financial analysts explore and investigate financial data to identify opportunities or measure outcomes from investment recommendations or business decisions.
Financial analysts work in a broad range of industries, including banking, mining, recruitment, technology, insurance, education, or health.
Junior financial analysts often work on the buy side of the finance industry in businesses that manage their own investment funds. Their role might involve researching the firm’s investments to model performance, create forecasts, and make recommendations to their teams and managers.
Senior financial analysts are more likely to work on the sell side of the finance industry in businesses that make recommendations for other investors. These analysts make announcements on securities or shares such as buy, sell, strong buy, strong sell or hold.
When you hear or read the advice of financial analysts in the media, they’re likely to be the top senior financial analysts working on the sell side.
What does a financial analyst do?
As a financial analyst, your duties may include:
- Researching industry-specific financial trends and developments, including business and economic trends
- Reporting on key metrics and financial results
- Developing models to assist with decision-making
- Analysing financial information to identify investment opportunities
- Driving annual and quarterly processes for forecasting and budgeting
- Keeping up to date with new investment policies or regulations
While there are many commonalities in financial analyst roles, there is also incredible diversity in the work you could be doing.
In 2021, the Sydney Morning Herald reported that a team of 30 senior analysts at Commonwealth Bank Australia (CBA) worked around the clock for three days to identify customers suspected of paying for child exploitation material.
While that probably wasn’t what the analysts had in mind when they signed up for the job, they were helping to identify criminals abusing the financial system as part of CBA’s obligations to the Australian Transaction Reports and Analysis Centre (AUSTRAC).
Successfully completing a project like this requires a combination of skills commonly expected in most financial analyst career options.
Qualifications to become a financial analyst
So, how do you join this industry? A few methods can help you enter the profession and expand your job prospects.
Undergraduate degree
A common career pathway for becoming a financial analyst is completing an economics, finance or commerce degree, which helps you gain foundational knowledge to kickstart your career.
Whether you’ve studied a bachelor’s degree in a finance-related discipline or not, there are pathways for you to become a financial analyst. For example, UNSW Online allows students from non-cognate disciplines to study the Graduate Certificate in Applied Finance. Once complete with a credit average, these students can choose to continue their studies with the Graduate Diploma in Applied Finance or the Master of Applied Finance.
Internship
You may consider doing an internship to learn from experienced financial analysts. Like many internships, this can help give you a competitive advantage by giving you valuable learning experiences in a real-world setting. You can choose to complete these internships during or after your studies.
Certifications
While not mandatory for all financial analyst positions, acquiring CPA or Chartered Accountant qualifications can significantly distinguish you in the eyes of employers.
Postgraduate degree
Completing a postgraduate degree can give you a wealth of financial knowledge and real-world applications. It can also help you gain a solid foundation to pursue the Chartered Financial Analyst (CFA) accreditation.
Once you’ve become a financial analyst, you’ll be pleased to hear that your career pathway does not end there. With a deeper understanding of business operations and what makes companies successful, financial analysts can progress into management positions.
Skills you need to become a financial analyst
Here are seven skills that financial analysts commonly have:
Accounting skills
Financial analysts need to know how to read and interpret financial documents such as cash flows, balance sheets and income statements. You’ll need a solid understanding of accounting terms and software.
Financial modelling skills
Financial models are a digital representation of an organisation’s financial performance. As a financial analyst, you can create these models to show a business's historical and predicted future performance, which drives informed decision-making.
Economics knowledge
Economics is a social science that seeks to explain the factors that influence the production, distribution and consumption of goods and services at a macro or global level – and from the micro or local perspective.
Believe it or not, it’s possible to have a good understanding of economics and a poor relationship with finance. You’ll need to master both for a successful career as a financial analyst.
Technical analysis
Technical analysis refers to predicting future prices based on the evaluation of historical prices. Looking at these trends can assist financial analysts to make predictions about how prices will change over time and recommendations about potential investments.
Maths and statistics
Most financial analysts report having a passion for maths, or at least being good at it.
An understanding of statistics is essential not only to help you in your research on businesses but also to communicate effectively with stakeholders.
Research skills
Financial analysts source data from various sources and make predictions based on analysis. Strong research skills will help you find and identify the data you need to make these predictions - whether from company records or industry sources.
Communication
Financial analysts need to have advanced communication skills.
You’ll be reporting to colleagues, managers, clients, and various stakeholders. In some cases, those people might not have financial literacy – additionally, in most situations, your goal will be to influence an outcome.
What is the career outlook for financial analysts in Australia?
Salary
While the role is broad and varied, the income earned by financial analysts indicates the demand for qualified financial analysts.
According to Seek.com, the average salary for a financial analyst in Australia is $105,000.
Job growth
According to Seek, the number of jobs for financial analysts is expected to grow by an impressive 32.2 per cent over the next five years.
By its very nature, the financial analyst’s job is a job that grows with you. It’s not unusual for junior financial analysts to move from the buy side of the finance industry to the sell side as they gain more seniority. The more researching, forecasting and recommending you do, the more you’ll understand, and your career options can expand.
Career opportunities
Financial analysts can work in a range of industries such as mining, local councils, healthcare, social services, insurance, retail and even universities.
Beyond employers, many certified financial analysts are self-employed and provide consulting services to several industries.
Unlock your value with UNSW Online’s Master of Applied Finance
The online Master of Applied Finance at UNSW can provide you with all the qualifications you need to upgrade or switch your career to become a financial analyst.
This program has been designed through consultation with the finance industry to provide you with relevant skills and knowledge that employers value. The curriculum has also been designed in line with the Chartered Financial Analyst (CFA) curriculum, meaning it’s the perfect lead into membership with the Chartered Financial Analyst (CFA) Society.
Unlock your potential. Download a free brochure and learn how to become a financial analyst with the online Master of Applied Finance at UNSW.
