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Financial analysts salary & career outlook

Companies exist to make money, but knowing how to best invest it can be a complicated affair. Financial analysts make it their business to know the finance industry inside and out, in order to better weigh the merits and risks of various investment products to help companies and individuals make better investment decisions. It is a field that requires a great deal of expertise, but your time invested can pay off both in terms of earnings and job prospects.

Financial analysts help businesses and individuals decide how to invest their money based on the performance of a variety of financial instruments. Here are a few of the specific tasks that a financial analyst might be called upon to perform:

  • Constructing portfolios or recommending individual investments
  • Consulting with investors to provide insight into investment recommendations
  • Studying past and current trends in business and the economy
  • Analyzing a company's financial statements to determine its overall value
  • Meeting with enterprise managers to better understand organizational direction

Important qualities for financial analysts include excellent analytical, communication and decision-making skills, strong mathematical ability and a good mind for details.

Financial analyst salary trends

The BLS reports a mean annual financial analyst salary of $91,620 for 2013, with the bottom 10 percent earning less than $48,100 for the year and the top 10 percent taking home $152,420 or more. Securities and commodities exchanges, brokerage firms, and information services companies were among the industries that reported the highest financial analyst salaries in 2013.

Salary expectations are also significantly influenced by such factors as regional workforce demand, which leads to a fairly wide range of statewide salary averages. Here are the states with the highest reported mean financial analyst salaries in 2013, according to the BLS:

  • New York: $120,060
  • Oregon: $106,990
  • California: $102,630

Higher-than-average living costs can quickly offset higher earnings, however, so it helps to keep that in mind when estimating your own salary potential. Here are a few metro areas in states which placed well on the Center for Community and Economic Research's September 2014 Cost of Living Index but where a relatively high mean annual financial analyst salary was reported to the BLS in 2013:

  • Birmingham, AL: $101,840 mean annual salary; state ranked 6th in affordability
  • Chattanooga, TN: $96,600 mean annual salary; state ranked 2nd in affordability
  • Kokomo, IN: $94,290 mean annual salary; state ranked 3rd in affordability

Financial analyst job outlook

According to BLS projections, employment opportunities for financial analysts should increase about 16 percent nationally between 2012 and 2022, leading to nearly 40,000 new positions for up-and-coming finance experts. An increasingly diversified field of financial products and a movement toward more complex portfolio structures are driving the need for highly trained finance personnel at multiple levels within the business field.

Just as with earnings, where you choose to work can also impact your career outlook. The U.S. Department of Labor's CareerOneStop projects that the following states will experience the fastest financial analyst employment growth between 2012 and 2022:

  • North Dakota: 35.4 percent
  • Colorado: 28.2 percent
  • Kentucky: 27.1 percent
  • Tennessee: 25.9 percent
  • Oregon: 25.8 percent

The BLS warns that competition for high-paying jobs — wherever they may be — is expected to remain strong despite rapid career growth overall.

How to become a financial analyst

Entry-level positions in the field typically call for a bachelor's degree in finance, accounting, business administration, economics or a similar discipline. Some employers openly prefer candidates with graduate degrees, particularly for positions with elevated levels of complexity or responsibility; in these cases, a master's in business administration, economics or finance is usually the right degree for the job.

Certain financial analyst positions may also require candidates be licensed. The Financial Industry Regulatory Authority (FINRA) is the primary licensing organization for financial analysts, although most of the licenses require sponsorship by an employer and are unlikely to be required in the application process. Professional credentials, such as the Certified Financial Analyst (CFA) certificate offered by the CFA Institute, can also help aspiring financial professionals in the job search.

Sources:

Occupational Trends by State, Financial Analysts, CareerOneStop,
http://www.careerinfonet.org/carout3.asp?optstatus=111111111&id=1&nodeid=2&soccode=132051&stfips=01&jobfam=13&order=Percent

Cost of Living Data Series: Third Quarter 2014, Missouri Economic Research and Information Center, Missouri Department of Economic Development,
http://www.missourieconomy.org/indicators/cost_of_living/index.stm

Occupational Employment and Wages: Financial Analysts, Bureau of Labor Statistics, U.S. Department of Labor, April 1, 2014,
http://www.bls.gov/oes/current/oes132051.htm

Financial Analysts, "Occupational Outlook Handbook, 2014-15 Edition," Bureau of Labor Statistics, U.S. Department of Labor, Jan. 8, 2014,
http://www.bls.gov/ooh/business-and-financial/financial-analysts.htm