Financial Analysts

Financial analysts guide businesses and individuals in decisions about expending money to attain profit. They assess the performance of stocks, bonds, and other types of investments.

Duties

Financial analysts typically do the following:

• Recommend individual investments and collections of investments, known as portfolios
• Evaluate current and historical financial data
• Study economic and business trends
• Examine a company’s financial statements to determine its value
• Meet with company officials to gain better insight into the company’s prospects
• Assess the strength of the management team
• Prepare written reports

Financial analysts evaluate opportunities to commit money for the purpose of generating profit.

Financial analysts can be divided into two categories: buy-side analysts and sell-side analysts.

• Buy-side analysts develop investment strategies for companies that have a lot of money to invest. These companies, called institutional investors, include hedge funds, insurance companies, independent money managers, nonprofit organizations with large endowments, private equity firms, and pension funds.
• Sell-side analysts advise financial services sales agents who sell stocks, bonds, and other investments.

Analysts may work for the business media or other research houses, which are independent from the buy and sell side.

Financial analysts generally focus on trends affecting a specific geographical region, industry, or type of product. For example, they may focus on a subject area or a foreign exchange market. They must understand how economic trends, new regulations, policies, and political situations may affect investments.

Investing has become more global, and some specialize in a particular country or world region. Companies want these specialists to understand the business environment, culture, language, and political conditions in the country or region that they cover.

The following are examples of types of financial analysts:

Financial risk specialists, also called financial risk analysts, evaluate threats to investment decisions and determine how to manage unpredictability and limit potential losses. They make investment decisions such as selecting dissimilar stocks or having a combination of stocks, bonds, and mutual funds in a portfolio. They also make recommendations to limit risk.

Fund managers work exclusively with hedge funds or mutual funds. Both fund managers and portfolio managers frequently make buy or sell decisions in reaction to quickly changing market conditions.

Investment analysts assess information involving investment programs or financial data of institutions, such as business valuation. They also respond to queries from clients and client advisors regarding asset allocation and alternative investment topics including hedge funds, real property, and venture capital.

Portfolio managers select the mix of products, industries, and regions for their company’s investment portfolio. These managers are responsible for the overall performance of the portfolio. They are also expected to explain investment decisions and strategies in meetings with stakeholders.

Ratings analysts evaluate the ability of companies or governments to pay their debts, including bonds. Based on these evaluations, a management team rates the risk of a company or government not being able to repay its bonds.

Securities analysts evaluate securities markets and trends to identify high-yield assets for clients and companies. They may use resources such as bond performance reports, daily stock quotes, market and economic forecasts, and other financial statements and publications.

Financial and investment analysts held about 368,500 jobs in 2024. The largest employers of financial and investment analysts were as follows:

Financial risk specialists held about 60,500 jobs in 2024. The largest employers of financial risk specialists were as follows:

Financial analysts work primarily in offices but may travel to visit companies or clients.

Work Schedules

Most financial analysts work full time and some work more than 40 hours per week.

Financial analysts typically need a bachelor’s degree to enter the occupation.

The median annual wage for financial and investment analysts was $101,350 in May 2024.

The median annual wage for financial risk specialists was $106,000 in May 2024.

Overall employment of financial analysts is projected to grow 6 percent from 2024 to 2034, faster than the average for all occupations.

About 29,900 openings for financial analysts are projected each year, on average, over the decade. Many of those openings are expected to result from the need to replace workers who transfer to different occupations or exit the labor force, such as to retire.