Financial Analyst

Financial analysts earn a median salary of $99,890 with the top 10% making over $166,560, and the field is growing at 8% – faster than average.

Financial analysts are the number-crunchers behind investment decisions, corporate strategy, and capital allocation. Whether working at a Wall Street investment bank or in the finance department of a regional hospital, these professionals build models, evaluate risk, and turn data into actionable recommendations. This guide covers what financial analysts do day-to-day, how pay differs by industry and location, which certifications drive the highest earnings, and how to progress from junior analyst to portfolio manager or CFO.

What Does a Financial Analyst Do?

Financial analysts conduct quantitative analysis of financial data to guide investment decisions, evaluate business performance, and support strategic planning. The BLS classifies this role as Financial and Investment Analysts (SOC 13-2051), with 327,900 professionals currently employed across the United States.

The role splits into two broad categories:

Buy-side analysts work for investment firms, mutual funds, hedge funds, and pension funds. They evaluate securities (stocks, bonds, alternative investments) and make recommendations about what to buy, hold, or sell for their firm’s portfolio.

Sell-side analysts work for investment banks and brokerage firms. They research companies and industries, publish research reports, and provide recommendations that guide their firm’s clients.

Corporate financial analysts (FP&A) work inside companies, analyzing internal financial performance, building budgets, forecasting revenue, and supporting management decisions.

Core responsibilities include:

• Financial modeling – building spreadsheet-based models to project revenue, costs, cash flows, and valuation under different scenarios
• Valuation analysis – determining the value of companies, assets, or investment opportunities using DCF, comparable company analysis, and precedent transactions
• Investment research – studying economic trends, industry dynamics, financial statements, and competitive landscapes to form investment theses
• Performance reporting – preparing quarterly earnings analyses, budget variance reports, and management dashboards
• Risk assessment – quantifying financial risks including market risk, credit risk, liquidity risk, and operational risk
• Presenting recommendations – communicating findings to portfolio managers, corporate executives, or clients through written reports and presentations

A Day in the Life of a Financial Analyst

A corporate FP&A analyst at a technology company arrives at 8:30 AM and starts by reviewing the daily flash report – yesterday’s revenue, bookings, and cash position. At 9:00, they join a budget review meeting with the VP of Engineering, walking through headcount projections and capital expenditure requests for next quarter. From 10:00 to noon, they are deep in Excel, building a three-scenario revenue model for an upcoming board presentation. After lunch, they pull data from the company’s Salesforce CRM and ERP system to update the pipeline-to-revenue conversion model. The afternoon includes a call with investor relations to discuss how to present Q2 earnings guidance, and the day ends around 5:30 PM updating the rolling 12-month forecast.

An equity research analyst at an investment bank starts much earlier – scanning market news and pre-market activity by 7:00 AM, issuing a morning note to sales traders by 7:30 AM with commentary on overnight developments affecting covered stocks. The bulk of the day involves refining a financial model for a company reporting earnings next week, building a discounted cash flow analysis, and drafting a research note with a price target and buy/sell recommendation. Calls with investor clients, company management teams, and industry contacts fill the gaps. Hours run until 7-9 PM during earnings season.

A risk analyst at a bank spends the day running stress tests on the loan portfolio, modeling scenarios for interest rate changes and economic downturns, preparing reports for the risk committee, and ensuring the bank meets regulatory capital requirements.

Financial Analyst Salary and Job Outlook

Source: U.S. Bureau of Labor Statistics, 2024 data.

Salary by Experience Level

Investment banking analysts at bulge-bracket firms start higher ($100,000-$110,000 base plus $30,000-$60,000 bonus), but the hours are significantly more demanding.

Top-Paying States

The gap between New York City and the national median is striking – roughly 32% higher. This reflects the concentration of investment banks, hedge funds, and asset managers in Manhattan and the surrounding area.

How to Become a Financial Analyst

Education Pathways

Bachelor’s degree in finance, accounting, economics, or mathematics (required). This is the standard entry point. Strong coursework in financial accounting, corporate finance, investments, statistics, and econometrics provides the analytical foundation. Excel proficiency is expected from day one.

Master’s degree (competitive advantage). An MBA with a finance concentration is the traditional path for advancement. A Master of Finance (MFin) or Master of Financial Engineering (MFE) is increasingly popular for quantitative roles. Top programs provide recruiting access to investment banks and asset managers.

CFA charterholder path. For investment-focused careers, pursuing the CFA can be more cost-effective than an MBA. Many employers value the CFA equally to or more than an MBA for portfolio management and research roles.

Timeline from Start to Working

Estimated Training Costs

• Public university bachelor’s (in-state): $40,000 - $80,000
• Master of Finance: $30,000 - $100,000
• MBA (top-20): $130,000 - $220,000
• CFA program (all three levels): $3,000 - $5,000 (exam fees + study materials)
• Financial modeling bootcamp: $500 - $2,000

Certifications That Matter

CFA (Chartered Financial Analyst)

The premier credential for investment professionals, universally respected in asset management, equity research, and portfolio management.

• Requirements: Bachelor’s degree (or be in final year), pass three progressive exam levels, four years of qualified investment work experience
• Level I: 180 multiple-choice questions, 4.5 hours. Covers ethics, quantitative methods, economics, financial reporting, corporate finance, equity, fixed income, derivatives, alternatives, portfolio management
• Level II: Vignette-based, 4.5 hours. Deeper analysis and application
• Level III: Essay and vignette, 4.5 hours. Portfolio management and wealth planning focus
• Pass rates: ~43% (Level I), ~45% (Level II), ~52% (Level III)
• Total cost: $3,000-$5,000 for all three levels (registration, exam fees, study materials)
• Timeline: Most candidates take 3-5 years to complete all three levels, studying 300+ hours per level
• Salary impact: CFA charterholders earn a median of $126,000 per year globally (CFA Institute data)

CAIA (Chartered Alternative Investment Analyst)

Focused on alternative investments – hedge funds, private equity, real estate, infrastructure.

• Requirements: Bachelor’s degree, pass two exam levels, one year of professional experience
• Cost: $2,500-$3,500 total
• Value: Specialized credential for professionals in alternative asset classes

CPA (Certified Public Accountant)

Valuable for financial analysts who work heavily with financial statements, particularly in corporate finance, audit, and credit analysis. See the accountant career guide for details.

FRM (Financial Risk Manager)

The standard credential for risk management professionals.

• Requirements: Pass two-part exam, two years of relevant experience
• Cost: $1,000-$1,500 total
• Administered by: Global Association of Risk Professionals (GARP)

Series Licenses (FINRA)

Required for analysts who work with securities directly.

• Series 7 – required for selling securities, sponsored by employer
• Series 63/65/66 – state-level requirements for investment advisors
• SIE (Securities Industry Essentials) – prerequisite exam, can be taken before firm sponsorship

Skills and Tools

Technical Skills

• Financial modeling (three-statement models, DCF, LBO, merger models)
• Valuation methods (comparable company analysis, precedent transactions, sum-of-parts)
• Financial statement analysis (income statement, balance sheet, cash flow statement)
• Quantitative analysis and statistics
• Portfolio theory and asset allocation
• Risk measurement (VaR, stress testing, scenario analysis)
• Corporate finance fundamentals (capital structure, cost of capital, dividend policy)

Soft Skills

• Clear communication of complex financial concepts
• Intellectual curiosity and independent research discipline
• Attention to detail (one wrong cell in a model cascades through everything)
• Time management under tight deadlines
• Team collaboration across departments
• Professional skepticism and critical thinking
• Presentation skills for executive and client audiences

Software and Tools

• Microsoft Excel – the most important tool; financial modeling, pivot tables, VBA macros, data tables, scenario analysis
• Bloomberg Terminal – real-time market data, news, analytics, screening ($20,000+/year per seat, employer-provided)
• FactSet / Capital IQ / Refinitiv – alternative financial data platforms
• Python / R – increasingly used for quantitative analysis, data manipulation, and automation
• SQL – querying financial databases
• Tableau / Power BI – data visualization for management reporting
• PowerPoint – investor presentations and pitch books

Work Environment

Settings

Financial analysts work in corporate finance departments, investment banks, asset management firms, insurance companies, hedge funds, government agencies (Federal Reserve, SEC, Treasury), and consulting firms. The environment ranges from quiet corporate offices to high-energy trading floors.

Schedule

Hours vary dramatically by role:

• Corporate finance / FP&A: 40-50 hours/week, with quarter-end peaks to 55 hours
• Equity research: 50-60 hours/week, longer during earnings season
• Investment banking analyst: 70-100 hours/week for the first 2-3 years
• Asset management: 45-55 hours/week, early morning start (markets open at 9:30 AM ET)
• Risk analysis: 40-50 hours/week, more predictable

Pros and Cons

Pros:

• Strong compensation with clear upward trajectory
• Intellectually challenging work with tangible impact on business decisions
• CFA credential provides globally recognized career mobility
• Diverse specialization options (equities, fixed income, M&A, FP&A, risk)
• Growing demand (8% job growth) driven by market complexity
• Remote and hybrid arrangements becoming more common in corporate finance

Cons:

• Investment banking hours are extreme and widely documented
• High-pressure culture with significant financial stakes
• CFA exam requires years of dedicated study alongside full-time work
• Entry into top firms is highly competitive
• Market downturns directly impact job security in sell-side and buy-side roles
• Can be isolating – many hours spent working independently on models

Career Advancement

Corporate Finance Track

1. Junior Financial Analyst (0-2 years) – $55,000-$75,000
2. Financial Analyst (3-5 years) – $80,000-$110,000
3. Senior Financial Analyst (5-8 years) – $100,000-$135,000
4. Finance Manager (8-12 years) – $125,000-$165,000
5. Director of Finance (12-15 years) – $160,000-$220,000
6. VP of Finance / CFO (15+ years) – $200,000-$400,000+

Investment Track

1. Research Analyst / Associate (0-3 years) – $80,000-$150,000 total
2. Senior Analyst / VP (3-7 years) – $150,000-$300,000 total
3. Portfolio Manager (7-12 years) – $250,000-$500,000+ total
4. Director / CIO (12+ years) – $500,000-$2,000,000+

Related Careers

• Accountant – $79,880 median (financial reporting and tax focus)
• Finance – broad overview of the finance field
• Business Analyst – $99,410 median (process and systems focus)
• Business Administration – $101,280 median (general management)

Browse all Business & Technology Careers.

Professional Associations

• CFA Institute – Administers the CFA program, sets ethical standards for the investment profession, 190,000+ members globally. cfainstitute.org
• CFA Society chapters – Local chapters in most major cities offer networking, career resources, and events
• Association for Financial Professionals (AFP) – Corporate finance and treasury professionals. Offers the Certified Treasury Professional (CTP) credential. afponline.org
• Global Association of Risk Professionals (GARP) – Risk management professionals. Offers the FRM credential. garp.org
• Financial Analysts Journal – Published by CFA Institute, premier practitioner journal for investment research
• New York Society of Security Analysts (NYSSA) – One of the largest CFA Society chapters, offers extensive events and programming. nyssa.org

Frequently Asked Questions

What is the difference between a financial analyst and an accountant?

Accountants focus on recording, classifying, and reporting financial transactions – ensuring accuracy and regulatory compliance. Financial analysts focus on interpreting financial data to make forward-looking investment and business decisions. Accountants look backward (what happened), while financial analysts look forward (what should we do). Many finance professionals hold both the CPA and CFA or benefit from understanding both disciplines.

Is the CFA worth it?

For careers in investment management, equity research, and portfolio management, the CFA is extremely valuable and widely recognized. CFA charterholders earn a significant premium over non-charterholders. For corporate finance or banking roles, an MBA may provide better ROI through networking and recruiting access. The CFA is a major time investment (900+ hours of total study), so align the credential with your career goals.

Can I become a financial analyst without a finance degree?

Yes. Many financial analysts hold degrees in economics, accounting, mathematics, engineering, or computer science. What matters is quantitative ability, Excel proficiency, and understanding of financial concepts. Completing CFA Level I or a financial modeling course can demonstrate competence if your degree is in an unrelated field.

How competitive is it to get into investment banking?

Very competitive. Top banks receive thousands of applications for a limited number of analyst positions. Target school recruiting, relevant internships (ideally in IB), strong GPA, networking, and rigorous interview preparation (technical questions plus behavioral) are all expected. Lateral entry from corporate finance, consulting, or other banking roles is possible but also competitive.

What is the difference between buy-side and sell-side?

Buy-side analysts work for firms that invest money (mutual funds, hedge funds, pension funds, insurance companies). They make investment decisions for their firm’s portfolio. Sell-side analysts work for investment banks and brokerages, publishing research to help their firm’s clients make investment decisions. Buy-side typically pays more at senior levels; sell-side offers broader exposure to companies and industries.

How much math is involved in financial analysis?

The math is applied rather than theoretical. You need comfort with algebra, statistics, probability, and basic calculus concepts. Financial modeling relies heavily on Excel formulas rather than manual calculations. Quantitative finance roles (derivatives pricing, algorithmic trading) require significantly more advanced mathematics, but the majority of financial analyst positions rely on strong quantitative reasoning rather than advanced math degrees.

What software skills do I need before starting?

Excel is non-negotiable. You should be comfortable with VLOOKUP/INDEX-MATCH, pivot tables, conditional formatting, charts, and basic financial formulas before your first day. PowerPoint skills for presentations and familiarity with financial databases (Bloomberg, Capital IQ) are expected at most firms. SQL and Python are increasingly valued, especially for data-intensive roles.

Compare finance programs near you. Program availability, tuition, schedules, and requirements vary by school and state. Contact programs directly to confirm details.

Notice an update we should make?
We strive for accuracy. Contact us here if you see incorrect or outdated info on this page.