A financial analyst is a highly lucrative career path and you can easily become one despite the popular opinion of the career’s high unattainability. “How to become a financial analyst with no experience?” is a question asked on numerous occasions by many. The career is in high demand, and people assume that it is extremely hard to become a financial analyst. However, this article will clear up all of your confusion.
How to become a financial analyst with no experience? Does this question surprise you? Well, it is certainly possible to become a financial analyst even with no experience given that you are willing and apply yourself. Let’s observe, and answer the question: “How to become a financial analyst with no experience?” in detail.
Financial analysts are tasked with various duties, and their job role is of crucial importance to any organization. They are charged with data collection, creating forecast reports, analyzing the financial feasibility of a project, assessing the viability of a project, and more. This means that they are highly in demand since their job description contains numerous responsibilities. Before we get straight into how to become a financial analyst with no experience, let’s go over financial analyst jobs first.
Financial Analyst Jobs
Financial analyst jobs are forecasted to rise by 5% in the next ten years. This is a higher growth rate compared to the average occupational rise projected for the next ten years. This is partially due to technological advancements, as well as expected growth in financial products.
How to become a financial analyst with no experience? The good news, you need neither experience nor practical hands-on training. Typical entry-level requirements consist of having a bachelor’s degree. However, it is a bonus on your CV if you also possess a master’s degree in the fields of finance and data management.
Financial analyst jobs, however, do require high skills in different areas including superior analytical skills, high honors in your finance bachelor’s degree, and exceptional mathematical skills.
If you want to know how to become a financial analyst with no experience, you need to get the right qualifications.
It is crucial to not be misled by the question: “How to become a financial analyst with no experience?”. Although experience does not matter and is not the deciding factor on whether you will get the job or not, experience does give you a cutting-edge advantage.
Here are some of the preferred qualifications which are significant to corporations in the upper echelon of the finance world.
- MBAs (Master’s) is given preference
- High-caliber problem-solving skills
- Credible work experience
- 3 to 5 years worth of experience in business finance
- Possession of certifications such as FMVA is a bonus
Financial Analyst Careers
Financial analysis is a vast field of study and practice, hence there are several types of financial analysts. Here are a few:
- Investment banking analyst
- Corporate development analyst
- Financial planning and analysis analyst
- Equity analyst
Each job title has its own distinct and unique responsibilities. It is important to do your research on what career ladder you want to climb before asking how to become a financial analyst with no experience.
What Does A Financial Analyst Do
We gave a brief introduction about a financial analyst’s primary duties and tasks. Now, it is time to address the question, “What does a financial analyst do?”, in greater detail.
Data And Information Collection
Historical financial statements, financial reports, and statistics are some of the many types of data collected and assorted by financial analysts.
They use this data to analyze the extensive areas of a business, such as performance, business health, competition, market research, and more.
Once the data has been collected, financial analysts create presentations that direct the upper management to undertake certain financial decisions such as: expanding, taking out a massive loan, budgeting for the coming year, costing, and more.
Financial analysts usually compile the data on Excel. Then, they calculate, through financial procedures and formulae, certain financial benchmarks such as return on investment (ROI), return on equity (ROE), DuPont analysis, and more. Financial ratios such as profitability ratios and liquidity ratios are also calculated.
After streamlining this data, simplifying it, and providing detailed applications, financial analysts create thoroughly based presentations.
These presentations mandate and provide the upper management with solid, analytically proven, evidence-based forecasts and analysis reports to undertake serious decision making.
Financial analyst roles are not just limited to the crucial processes of compiling data and merging it to create thorough forecast and analytical reports. They are, on many occasions, also tasked with the decision-making process. Furthermore, their recommendations are also extremely important to the business’s hierarchy.
Financial analysts provide insights through their assessment of data and its various constituent results. These insights comprise opportunities of increasing revenue, reducing costs, increasing market share, increasing or reducing promotional activities, and others.
There is a whole universe of answers to the question: “What does a Financial Analyst do?” you will find out more about it in greater detail if you refer to a well-reputed financial textbook such as Brigham and Houston.
Now let’s look at some of the important skills required for a financial analyst to help you better understand how to become a financial analyst with no experience.
Financial Analyst Skills
A financial analyst needs to have a multitude of skills in his or her command to have a successful career that brings positive growth to the firm as well. Financial analyst skills can be both subjective, or objective, in nature.
Here are some of the many, but probably the most crucial, skills possessed by a competent financial analyst.
Accurate and relevant researching skill is imperative for a financial analyst to possess. This is because researching and gathering data is the first step in a long process which ends in the final report being submitted to the upper hierarchy for decision-making purposes.
Hence, it is crucial to have proper and well-organized research skills to gather relevant and updated data. Alertness and resourcefulness are two important features a financial analyst possesses when it comes to researching.
Amongst all of the financial analyst skills, this is considered to be the most critical. This skill allows a financial analyst to show logical thinking, and viewing data through a lens of different outcomes and scenarios.
A financial analyst, through this skill, can look at the data of many companies, extracting out key findings from mere numbers. This skill also allows analysts to assess different companies’ data all at once.
Financial analysis is all about mathematics which is why it is tremendously necessary for a financial analyst to be well-versed in the field of Mathematics. Financial analysts use complex equations such as the equation of calculating operating leverage, among many others.
To be a sound analyst, the importance of this skill must be realized by a financial analyst.
One of the main aims of a financial institution is to provide its clients with prosperous investment opportunities. This requires a lot of risk and gut, and this is where financial analysts come in because they approve the investment appraisal.
On-the-spot decision-making, whilst being confident in their abilities and findings, is an essential skill of financial analysts. Financial analysts can not afford to hesitate, and not be able to trust their findings because that will be unnerving for the client as they expect full confidence from their financial analyst.
Regardless of the situation at hand, whether it is glorious or perilous, a competent financial analyst will always come up with solutions and backup options that have lower collateral damage.
How Much Does A Financial Analyst Make
Perhaps, this is one of the most interesting topics for many. The reason why the question: “How to become a financial analyst with no experience?” is so frequently asked that this occupation has always been provided with attractively high salaries.
How much does a financial analyst make? The simple answer is quite a lot.
The entry-level financial analyst makes a significantly higher salary compared to any full-time wage occupation, on average in the United States.
According to the U.S. Bureau of Labor Statistics, financial analysts make an average yearly salary of $85,660 per year. This is inclusive to all experience levels, on average. This is why there is little heed paid to experience in this line of work, which reinstates the debate of: “How to become a financial analyst with no experience”.
However, some financial analysts make abundantly higher salaries, even compared to their counterparts. Financial analysts, who work on Wall Street, make significantly more as compared to the others as their yearly salaries are $140,000, on average. The surprising, or in this case not surprising, point is that this salary figure is for first-year entrants.
How much does a financial analyst make? To reinforce the answer to this question which was also asked previously, as of May 2020, financial analysts in the United States made an annual salary of a whopping $83,660.
Now, we shall list top companies for financial analysts to work for considering salary.
- A financial analyst at Apple makes around $137,744 per year. 8 salaries were reported indeed.
- A financial analyst at EY makes around $127,735 per year. 67 salaries were reported indeed.
- A financial analyst at Stanford University makes around $105,421 per year. 5 salaries were reported indeed.
Junior Financial Analyst
A junior financial analyst is typically a new entrant or someone who has had little to no experience in the past. These are usually the financial analysts we talk about when we ask the question: “How to become a financial analyst with no experience?”
A junior financial analyst is tasked with creating an analysis report on the financial position of a company. Their primary duties, other than the one just mentioned, are to collect, gather, compile, and feed the data into Excel.
Their job description also involves planning and aiding in the creation of budgets through analyzing various income statements of the past years.
Companies that are well-known and successful usually prefer a CGPA of 3.5 and above when hiring junior financial analysts. However, small and medium-sized companies usually acquire individuals who possess a degree in the relevant field of study: Finance, or Business Finance.
Acquiring certifications can also add to improve your profile in many ways as certifications bolster your skillset and marketability.
Below is a list of common requirements asked by the majority of organizations when recruiting a junior analyst.
- An internship experience is extremely important and required by many organizations.
- Bachelor’s in any finance-related degree is also necessary. For example, business, business finance, finance, economics, etc.
- Data analytical skills are crucial but apart from that, today’s employers also ask for proficiency in IT skills such as SPSS, MS Excel, MS PowerPoint, and cloud management software such as Oracle or Salesforce.
- Since junior analysts take a huge part in the firm’s portfolio management duties, they are expected to be well-aware, have a high skill set in portfolio management.
- Knowledge regarding legal laws, governments, and financial fairness policies is increasingly demanded today.
Although you may be here to know how to become a financial analyst with no experience, having an internship experience can play to your advantage.
Although the answer to the question: “How to become a financial analyst with no experience?” is affirmative, it is still highly advised by many, and us, to have some degree of experience in the field of financial analysis or even analysis of any sort. This will further broaden your opportunities.
If you want to go the extra mile and work for a top-notch firm while making highly fruitful salaries, you should seriously consider acquiring certifications such as CFA and many others. Apart from certification, an MBA degree in finance or any other finance-related field can also provide you with an advantageous vantage point in your professional life.
It is important to understand that financial analysis is a highly risk-intensive job, hence every firm requires someone who is substantially competent and qualified. The more you are qualified, the better it is.
Now that you know how to become a financial analyst with no experience, it’s time that you start applying and preparing for interviews for any opportunity that may arise.