Who's a Financial Analyst?
Are you great at managing your pocket money? Have great ideas to save money? Do your friends turn to you to help them figure out their finances? If so, consider a career in financial analysis!
As a financial analyst, you will help businesses grow by offering them sound financial advice. You will carry out research on various trends, study the financial status of the company, and accordingly come up with a plan to help them. Decisions such as buying and selling of stocks, recommending future investments, creating financial reports and others would be part of your responsibilities.
What will you do?
Creating financial models.
One of your primary responsibilities would be to create financial models that help you predict the outcome of business decisions. For this, you would have to aggregate large amounts of data by taking into account different factors like the current market trends, past transactions, liabilities, number of assets, etc.
Example: For a company merger, you would have to predict the outcome of the deal by comparing and studying the financial data of both the companies and provide the decision-makers with information on the steps needed to increase revenue and manage assets successfully.
Researching current trends.
Your job would also involve researching on the current trends in the financial industry. With this, you will assist your company in buying and selling stocks. You would also be managing the company’s financial portfolio i.e. assets and investments.
Example: You would study how new regulations, political situations, economic trends in certain industry would have an impact on your investments.
Prepare financial reports.
Major financial decisions would be dependent on you. For this, you must prepare financial reports for regular leadership reviews. The company’s financial performance would be evaluated on the basis of these reports. The reports have to be prepared in coordination with the accounts team.
Example: You would create a financial statement during the year-end. This statement would include the company’s spends, earnings, profits, losses, etc.
Managing the company’s financial portfolio.
When working on the buy-side, you would help employers decide on how they should spend their money. Whereas, if you’re working on the sell-side, you would review the performance of the existing investments of a company and determine if they should continue with those investments or not.
Example: You would help a company in investing stocks and securities, house funds, buying real estate or allocating marketing capital.
Present your findings and offer advice.
You will be in contact with the management quite often to understand their views on the financial reports and current financial trends. You will have to present your report to them along with your research and other findings to help them take appropriate financial decisions.
Example: If the company is looking to invest in another, you will have to study financial reports of both the companies, present the pros and cons in terms of finances and its impact on the business.
Take the Mentoria career assessment test, to find out how well-suited you are as a Financial Analyst.
Where will you work?
Financial analysts typically work in an office set up with other employees and the management. They often work with the accounts and sales team.
Many financial analysts work or freelance for agencies that consult several companies. When working or freelancing for an agency, you would be required to visit the client’s office on a weekly or monthly basis to understand the existing financial stand of the company, evaluate its past performance and perform financial forecasting, reporting and operational metrics tracking.
You will spend a considerable amount of time visiting a client’s office for briefings and presenting your report.
How do you get there?
What skills would you need?
Analytical and Data Skills
You will receive huge amounts of data from your client. This data will have to be analysed effectively so you can find ways that will help your client reach their customers is the best way possible. While it is true that the more data you analyse, the more insights you generate; analytical thinking will help you narrow down your search and find your key actionable items, thus saving you a lot of time and resources.build this skill
Attention to Detail
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How do you make it to the top ranks?
Pursuing your career locally VS abroad
In order to pursue a career in financial analytics, students must complete their graduation with mathematics as a subject. After acquiring a bachelor’s degree, there are various options to choose from. Students can opt for a two-year post-graduate degree in MCom, where the average tuition fees range from INR 10,000 to 1.5 lakhs, or Master of Finance and Control (MFC) where the fees range from INR 5000 to 5 lakhs. Students can also go for Chartered Accountancy, which is relatively less expensive at INR 4,000 to 1 lakh for a two-year course. The most expensive option is an MBA, where the fees range from INR 2 to 20 lakhs for a two-year course. Some of the best colleges in India for finance are BITS Pilani (Mumbai), International Management Institute (Delhi), Narsee Monjee Institute of Management Studies (Mumbai), SP Jain Institute of Management and Research (Mumbai), and Xavier Institute of Management (Bhubaneswar). Later in their careers, financial analysts can also opt for the CFA course affiliated to the Indian Association of Investment Professionals.
Financial analysts from India have tremendous scope internationally as global finance companies such as Bank Of America, Wells Fargo Bank, PNC Bank, National Association and others hire candidates from all over the world. There is also scope for a successful career in stock exchange companies for talented financial analysts whose expertise lies in stocks. Chances are higher if students earn a degree from reputed international institutes like Columbia University (New York), Florida International University (Miami), Johnson Graduate School of Management (New York), University of California (Oakland), or University of Texas (Austin). Students with an undergraduate degree in finance, economics, statistics, business administration, and management as well as some internship experience can qualify for entry-level jobs in financial analytics. For more lucrative jobs, students need an additional degree in Chartered Investment Manager, Chartered Financial Analyst, Certified Management Accountant, Certified General Accountant, or Masters of Business Administration.
How much would you get paid?
Your exact earnings would depend entirely on your education, skill-set, experience, and the organisation you’re working for. We can, however, give you a fair idea of how much you would earn as a financial analyst.
What are your career options?
Budget analysts are also known as accountants or financial controllers. You will evaluate the operating costs of a company and its departments and thereby prepare a budget report. In a non-profit or non-governmental organisation, you will find the best ways to distribute funds and other resources among different departments and projects.
Credit analysts examine credit data and other financial information to analyse risks in lending money or extending credit to individuals, companies or securities. You will determine whether borrowers can repay their financial loans by analysing their financial health and other economic conditions that can impact the mode of repayment.
Investment analysts look at investment data and advise individuals or businesses on the investments that would be most profitable to them. You will also create your own investment strategies, provide your clients with the pros and cons of each investment option available to them.
Private Equity Analytics
These professionals work for private equity firms, guiding them on the equity of the private companies in which they invest. For this, you will conduct research and analysis on private companies, determine the pros and cons of investing in their stocks, and provide their firms with the best investment options.
Merger & Acquisition Analytics
Analysts in mergers and acquisitions are involved in the primary legwork of potential deals. As a company goes through restructuring or complete turnover, you will evaluate financial reports, examine operations, and determine how the company can fit within another business or as a part of a larger portfolio.
Fund managers oversee hedge funds or mutual funds. You will research and determine the best stocks, bonds, or other securities for your clients and are responsible for implementing the fund’s investment strategy and managing its portfolio trading activities. You would also lead a team of investment analysts.
Every investment involves a certain degree of risk. Professionals in risk analytics evaluate the risks of investments and help mitigate them. You will examine and analyse many factors that could impact investments and define certain preventive measures that can reduce the possibility of any kind of risk involved with the investment.
Tax analysts mainly help companies, as well as individuals, file their tax returns. You will conduct thorough research of their clients’ tax data, review their returns, and ensure that all records are in compliance with local, state, and federal laws.
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