How to Become a Financial Analyst: Career Path and Requirements

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A financial analyst studies financial data about companies, industries and the wider economy, then recommends what an employer or client should do with its money: buy or sell a security, approve a deal, fund a project or cut a cost. There is no single licensing route like law or medicine. The usual path is a bachelor’s degree in finance, economics, accounting, statistics or math, followed by strong spreadsheet and modeling skills and an entry-level junior analyst job. Some roles also require securities licenses, and an advanced credential such as the CFA charter or an MBA can follow once you are working. A junior analyst can reach senior analyst in roughly three to five years.

What a financial analyst does

A financial analyst’s job is to judge the likely success of an investment or business decision. That judgment rests on three layers of information:

• Macroeconomic conditions: interest rates, inflation, economic growth and regulation that affect whole markets.
• Industry and microeconomic conditions: competition, pricing, demand and costs within a sector.
• Company fundamentals: what the financial statements show about revenue, profitability, debt and cash generation.

From this, the analyst builds a forecast and a recommendation. On the investment side, that might be a “buy” on a stock whose past performance and outlook justify a higher value than its current price. Inside a company, it might be a recommendation to close an underperforming location or shift a marketing budget.

The analysts the public hears about most evaluate individual stocks and bonds, but the role exists well beyond Wall Street. Banks, insurance companies, real estate investment firms and almost any data-driven business employ them. A company that runs on a franchise model, for example, may use analysts to track individual franchises or regional groups, identify which locations are strong or weak, and forecast profit and loss for each. Some analysts work for third-party firms that sell financial and revenue analysis to clients.

The path to becoming a financial analyst

1. Earn a bachelor’s degree in finance, economics, accounting, statistics, mathematics or a related field.
2. Build technical skills in spreadsheets, financial statement analysis and modeling while still in school.
3. Get relevant experience through internships, a campus finance role or an entry-level analyst position.
4. Take any exams your target role requires, such as the SIE, Series 7 or Series 63 for brokerage and securities roles.
5. Add an advanced credential (CFA charter, MBA or a specialized certification) as your career direction becomes clear.
6. Move from junior to senior analyst, then toward portfolio management, investment banking leadership or senior corporate finance roles.

Education requirements

Because no law sets educational standards for analysts, employers set the bar, and a bachelor’s degree has become the effective minimum. According to the BLS, most financial analysts hold a bachelor’s degree in a finance-related field such as finance, accounting, economics, statistics, analytics, business management or mathematics.

Degrees outside business can still work. A biology or engineering background can appeal to an employer when the candidate wants to cover healthcare, biotech, energy or industrial companies, where technical understanding of the product helps in judging the business. Graduates in these fields usually need to show they have also learned accounting and valuation, through coursework, exams or self-study.

A master’s degree strengthens an application in a crowded field. At the top of the market, it can decide the entry point: large investment banks, where first-year pay is highest, recruit heavily from MBA programs at elite universities such as Harvard and Princeton, and those graduates are often hired directly as associates rather than analysts. An MBA is not required for most analyst jobs, but it opens that particular door and is a common route for career changers.

Starting straight out of college is normal. Entry-level analyst roles are designed for new graduates, and most of the early work (data collection, model building, preparing slides) is learned on the job.

Skills financial analysts need

Technical skills

• Accounting and financial statements. Analysts read income statements, balance sheets and cash flow statements fluently and know how they link. Understanding the cash flow statement is especially important because reported profit and actual cash generation can diverge.
• Financial modeling. Junior analysts spend much of their time building spreadsheet models that project revenue, costs and cash flow under different assumptions.
• Valuation. Equity and investment banking analysts estimate what a company is worth using methods such as discounted cash flow and comparable company multiples. The main approaches are covered in business valuation methods.
• Software. Analysts are expected to be proficient with spreadsheets, relational databases, statistical and graphics packages and presentation software.
• Regulatory awareness. Analysts interpret financial transactions and may need to verify documents for compliance with government rules, including SEC regulations for those working in or with securities markets.

Communication and judgment

Analysts must explain findings to superiors clearly, concisely and persuasively, both in written reports and in presentations. Problem-solving and logic matter because the data rarely gives a clean answer; the analyst has to decide which assumptions are reasonable and defend them. Senior analysts who advance tend to have built strong working relationships with their managers and to mentor junior colleagues.

Licenses and certifications

Licensing depends on what the job involves. An analyst building budgets inside a manufacturing company needs no securities license. An analyst at a broker-dealer who deals with securities and clients may need one, and the employer typically tells new hires which exams to take.

FINRA and state securities exams

• Securities Industry Essentials (SIE): created by FINRA in 2018, it covers basic securities industry knowledge, terminology and regulation. It does not require firm sponsorship, so students and job seekers can take it before being hired, which signals commitment to employers.
• Series 7 (General Securities Representative): required for many roles that involve buying and selling a broad range of securities. It requires sponsorship from a FINRA member firm or another applicable self-regulatory organization, so you usually take it after being hired.
• Series 63 (Uniform Securities Agent State Law Exam): covers state securities laws and is often paired with the Series 7.

For candidates without a finance degree or MBA, passing these exams can demonstrate basic familiarity with investment terms and practices. Analysts who publish equity research at FINRA member firms may also need FINRA’s research analyst qualification exams.

Advanced credentials

Once you are established in a junior role, a more advanced credential can support promotion or a move into investment management.

• CFA (Chartered Financial Analyst): the best-known credential for investment analysis, awarded by CFA Institute. It requires passing three sequential exam levels covering ethics, accounting, economics, quantitative methods, valuation and portfolio management, plus qualifying work experience. The CFA charter requirements and the CFA Level 1 exam are explained in separate guides.
• CPA (Certified Public Accountant): relevant for analysts whose work leans heavily on accounting, audit or corporate reporting.
• FRM (Financial Risk Manager): focused on risk management, suited to analysts moving toward risk roles at banks and asset managers.

None of these is a legal requirement to work as a financial analyst, and their value depends on the path you choose. The CFA charter is usually pursued after you are already working, because it requires qualifying work experience. It is most valuable for investment analysis and portfolio management roles and less relevant for corporate FP&A positions.

Types of financial analyst roles

Job titles in financial analysis vary widely, but within the investment industry analysts fall into three broad groups: buy side, sell side and investment banking. Corporate finance adds a fourth large group outside the securities business.

Buy-side analysts

Buy-side analysts work for firms that invest their own funds or their clients’ funds, such as mutual funds, pension funds, hedge funds, insurance companies and real estate investment firms. Most financial analysts work on the buy side. They help their employer decide where to put money, whether that means buying securities for an in-house fund, acquiring income-producing properties or allocating a budget.

Buy-side analysts rarely make the final decision. A portfolio manager or investment committee does, but the analyst’s research, forecasts and identified trends feed directly into it.

Sell-side analysts

Sell-side analysts work at brokerages and investment banks that sell securities and research. They evaluate and compare securities within a sector or industry and publish research reports with ratings such as “strong buy,” “buy,” “hold,” “sell” or “strong sell.” Those recommendations carry real weight across the industry, including with buy-side firms that use them as one input.

Sell-side analysts at large investment banks also help the bank price its investment products and market them. They compile data on the stocks and bonds the bank offers, project how those securities may perform, and make recommendations to clients from the bank’s range of products. This is among the most prestigious and highest-paid analyst work.

Sell-side analysts usually specialize, first by asset class (stocks or fixed income), then by sector. One analyst may cover only energy companies, another only technology.

Investment banking and equity analysts

Analysts in investment banking help decide whether deals such as initial public offerings (IPOs) and mergers and acquisitions (M&A) are feasible given the companies’ fundamentals. The work relies heavily on modeling and forecasting: estimating what a combined company would earn, what a fair acquisition price looks like, or whether a client should invest venture capital in a business.

Analysts who support buy and sell decisions at large banks and look for IPO opportunities are often called equity analysts. They are typically among the highest-paid people in financial analysis, partly because large banks pay heavily to attract talent, and partly because a correct call on a large position or deal can be worth millions of dollars to the employer.

Corporate finance and FP&A analysts

Many analysts never touch securities markets. In corporate finance, financial planning and analysis (FP&A) teams build budgets, forecast revenue and expenses, compare actual results with plan, and evaluate projects such as new facilities or product lines. A clear grasp of the difference between revenue and profit, margins and cash flow is central to this work, and these roles usually do not require securities licenses.

What the job is like day to day

Analysts spend a large share of their time gathering information: economic data, company financial statements and industry news. Much of the reading happens outside working hours. Analysts commonly follow publications such as The Wall Street Journal, the Financial Times and The Economist, along with financial websites and company filings.

In the office, the work turns that information into models, reports and presentations for senior management. A typical output might combine a forecast, a cost-benefit analysis and a trend analysis to support a single recommendation.

The role can involve significant travel. Some analysts visit companies to see operations firsthand, and many attend industry conferences with peers who cover the same sector. Analysts generally work alongside other analysts as colleagues and report to a portfolio manager or another senior manager.

Salary and job outlook

Pay depends on the employer, location, experience and responsibilities. Most financial analysts earn significantly less than people in the highest-paid finance roles, particularly investment banking in New York City. Even so, the median annual income for an entry-level financial analyst is significantly higher than the median for full-time wage and salary workers in the United States overall. Equity and investment banking analysts at large banks sit at the top of the scale, and MBA-hired associates start higher still.

The employment outlook is positive. According to the BLS, there were about 429,000 financial analyst jobs in 2024, and employment is projected to grow about 6% between 2024 and 2034. Demand generally rises with economic activity: new businesses and expanding companies need analysts to evaluate investment opportunities. Emerging markets also create demand for analysts who understand specific regions.

Career advancement

Promotion from junior to senior analyst typically takes three to five years. The junior years are about execution, building models and gathering data accurately and quickly. Senior analysts are expected to own their recommendations, present them to senior management and guide junior staff.

From senior analyst, common next steps include:

• Portfolio manager, making the final investment decisions that analysts support.
• Partner or senior banker at an investment bank, leading deals rather than modeling them.
• Senior manager at a retail bank or insurance company.
• Investment advisor or financial consultant, working directly with clients.

In corporate finance, the progression usually runs from analyst to senior analyst, finance manager and eventually director-level roles. An MBA or CFA charter often accompanies these moves, especially when switching from corporate finance into investment management or banking.

Financial analyst vs. equity research analyst

“Financial analyst” is the broad category, from FP&A analysts to buy-side fund analysts. An equity research analyst is a specialist within it, who examines a company’s financial information closely and publishes findings, usually ending in a rating and a price target for the stock. Equity research analysts typically work on the sell side and cover a defined list of companies in one sector.

The Bottom Line

Students and career changers aiming for financial analysis can start with a relevant bachelor's degree, strong modeling skills and an entry-level analyst job. Securities licenses depend on the role, and FP&A work usually needs none. A CFA charter or MBA tends to pay off later, especially for moves into investment management, banking or senior positions after the typical three to five years to senior analyst.