The person who does financial analysis for external or internal clients is called financial analyst. Financial analysts help people decide how to invest their money. There are various other terms such as securities analyst, research analyst, equity analyst or investment analyst which are used for financial analyst. Besides financial analysis, a finance analyst performs duties such as writing reports as a part of brokerage which may contain fundamental analysis principles. Additionally, technical chart analysis and tactical evaluation of the market environment too are considered cardinal part of a financial analyst’s job.
Though slightly different, financial analysts’ job is like one of financial planners. At times financial analysts work in close coordination with financial planner to reach out to some conclusion related to investment choices. The essential part is that financial analysts possess higher level of expertise over finance management and financial analysis. Offering investment suggestions to clients, evaluation of the economic outlook of different sectors and industries for organizations are some other duties bestowed on financial analysts.
In order to become a financial analyst a candidate must have done graduation with mathematics as one subject. Additionally, a degree in business administration, accounting, finance or statistics benefits a lot in getting a job in finance organisations. A strong hand in statistics, business, economics, administration and accounting enhances the growth potential within an organisation. The CFA program offered by ICFAI can be done either full time or part time depending upon the time and interest. There are various other routes for becoming a financial analyst e.g. doing B.com and M.Com, Chartered Accountant, Company Secretaryship, etc.
Students who wish to make a career in financial analysis should start studying commerce and finance subjects from their school level as numerous schools offer business management and mercantile law during school level. Additionally, soon after doing 10+2, candidates can apply for CA course to become a financial analyst. An aptitude to numbers and finance helps candidates grow further in career as a financial analyst. Depending upon the inclination, one can try for better career as financial analyst called buy-side analyst whose job is to work for hedge funds, FOREX, fixed income analysis, investor relations management, etc.
Is it the Right Career for Me?
Financial analysis as a career option can be an excellent decision for those who are good at accounts and have inclination for finance side of any organisation. Owing to attractive growth prospects, financial analysis is a popular career choice where professional uses mathematical skills, logical skills, reasoning and deep understanding of finance to reach onto some conclusion. Strong communication and presentation skills are mandatory for a career in financial analysis as the professional is required to give presentations and convince the decision making members of the organisation about his conclusion or analysis.
What would it Cost Me?
An MBA degree for Financial Analyst may cost around Rs 2,00,000 from top notch institutes. However, a diploma in financial analysis can be earned paying for Rs 50,000. Though there are numerous institutes which claim to offer CFA course but only the Indian Association of Investment Professionals has authorised permission to offer CFA degree in India. IAIP is affiliated with CFA Institute and offers quality education to interested students. Fee structure keeps changing which is updated online whenever some changes take place.
Financial analysts have ample job opportunities with insurance companies, banks, securities firms, pension and mutual funds, etc. As the fundamental skill of financial analysts is to assist customers in the investment process, they can even have their own office and operate independently and develop a sound customer base.
Additionally, they can do accounts and prepare financial statements, do auditing, or assess taxes. Cost accountancy is another segment where a financial analyst can excel. Some financial analysts are hired to do special company work or investigate and ascertain the financial position of business house for the purpose of issue of new shares, purchase or sale or financing of business, etc. Secretarial work in companies, account management and share valuation, etc are some other works for financial analysts.
The determination of salary of financial analyst is done on the basis of skills and knowledge the professional possess. Any fresher financial analyst can earn any salary in the range of Rs 15,000- Rs40,000 per month. After five or more years of work experience there is four to five times growth in the salary package of financial analysts. Qualified CFA can earn attractive salaries in the USA or Canada. Indian financial analysts with right exposure and sound presentation skills get employment in multinational hedge fund organisations and financial bodies including investment banks.
Demand and Supply
The demand for financial analysts will likely outstrip average demand for all other occupations in next couple of years. This mismatch will only help aspirant financial analysts in getting hire remunerations. As an increase in investment activities can be marked in recent years, qualified financial analysts would be required to assist investment planning. Additionally, dearth of qualified professionals to do strategic financial analysis in India is expected to continue as colleges and financial management institutes are not able to meet internationally established standards for finance management. Except top 20 institutes in financial management there are not many quality institutes.
With expansion in the financial market in India there has been tremendous growth in financial jobs so that effective management can be done. The financial centres of Mumbai, Ahmedabad, Kolkata, Chennai, Kanpur, Delhi, Bangalore, Pune, etc have plenty of jobs for financial analysts. Post-liberalisation, there has been immense growth in employment opportunities in IPOs, FDI, FII, etc which require expert knowledge of finance and in consequence the financial analysts.
The market for mutual funds is expanding and upcoming mutual fund companies require talented and trained financial analysts so that they can carve a niche in finance market. Moreover, investment banking is expected to expand and it would definitely require the services of qualified financial analysts so that funds can be generated and assessment for mergers and buyouts can be done in the sophisticated manner. There would be increased demand for financial analysts to do analysis of sales, costs, commodity prices, tax rates and expenses of financial firms.
Depending upon the calibre and capabilities, international career for financial analysts is open. World famous finance companies such as CitiMartgage.Inc, Bank Of America, Wells Fargo Bank, National City Bank, PNC Bank, National Association, Technology Credit Union, etc hire candidates from various parts of the world. Additionally, extraordinary talented financial analysts can make career in stock exchange companies such as New York Stock Exchange, Tokyo Stock Exchange, NASDAQ, London Stock Exchange, Toronto Stock Exchange, Hong Kong Stock Exchange, etc.
Financial analysis is one of the toughest jobs for the reason that the professional is always on his toes. He is required to be well informed about various happenings in national and domestic finance market. Travelling is another crucial part of a financial analyst as for his analysis he requires to collect data and resources from various information centres. Therefore, extensive travelling can be a trouble at times. Growth prospects in career of financial analysts are subject to the growth of finance market and recessions affect hard.
Attractive growth for extraordinarily talented finance professionals attracts youngsters to become a financial analyst. There is no limit for professional growth in business analysis; particularly investment banking organisations offer stupendously high salaries to able candidates. Some top notch financial analysts can even make a career in media wherein they can put their views on the state of market, company shares, effects of policy changes, etc.
Different Roles, Different Names
Technological input is crucial part of financial analyst’s job wherein he uses various software packages specifically made for financial services e.g. spreadsheets, ERP, etc. Depending upon the academic qualification, work experience and skills, the role is offered to finance graduates in a finance organisation. Various roles or work profiles are as follows for finance professionals working as financial analyst:
- Junior Financial Analysts
- Financial Analyst
- Chartered Accountant trainee
- Assistant Consultant – Business Analyst
- Management Trainee – Finance
- Analyst-Back office
- Accounts Trainee
- Research Analyst – Option Strategist
Top organisations that hire financial analysts are:
- SBI Capital Markets Limited
- Bajaj Capital Limited
- DSP Merrill Lynch Limited
- Birla Global Finance Limited
- Housing Development Finance Corporation
- Karvy Group
- Centrum Finance Limited
- L& T Finance Limited
- PNB Gilts Limited
- CIL Securities Limited
Tips for Getting Hired
Candidates should be aware of the fact that financial analysis is career which can truly be considered tough as what matters all is the skills and wisdom. Starting as an intern with some finance organisation helps freshers get practical knowledge and right exposure. The candidate can learn how to use spreadsheets, databases, power point presentations, etc which in the end helps him get a job in finance company. Additionally, learning application software such as ERP can have additional benefit for candidates when searching for a job as most of the MNCs use such software for optimum output and prefer candidates who have practical knowledge of these.
As financial analysts require communicating and presenting a lot of information to clients and peers, they should inculcate excellent communication and presentation skills. Interpersonal skills matters a lot in the career of financial analyst as he interacts a lot with clients, customers, media, regulating authorities, etc. Knowledge and updated information about current finance market definitely helps candidates boost their chances of getting selected at financial company as financial analyst.
Besides doing BCom/MCom or CA and CFA students can do MBA in finance or finance analysis offered by various management institutes. Some management colleges offer diploma courses in financial management.Some of the renowned institutes offering courses in financial analysis are as follows:
- Narsee Monjee Institute of Management, Mumbai
- International Management Institute, New Delhi
- SP Jain Institute of Management and Research, Mumbai
- Xavier Institute of Management, Bhubaneshwar
- ICFAI Business School, Pune
- ICFAI Business School, Mumbai
- ICFAI Business School, Bangalore
- ICFAI Business School, Ahmedabad
- ICFAI Business School, Chennai
- Birla Institute of Technology and Science, Pilani