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How to Become a Financial Analyst or Financial Advisor

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Before now, people who wanted careers in finance had two options; an insurance agent or a stockbroker. All of that has changed, and now there are many choices. One of those choices is as a financial analyst or financial advisor. This article is your all-in-one guide on how to become a financial analyst or advisor.

Who is a Financial Advisor?

A financial advisor is a trained professional specializing in providing financial guidance to clients or investors. The job of a financial advisor is vast – they deal in estate planning, tax planning, and investment management. Financial advisors are becoming all-in-one solution providers because they offer insurance services, portfolio management, and everything in between.

The financial advisor is also an educator of some sort, as he helps the clients set goals and the steps to achieve them.

What Does A Financial Advisor Do?

The financial advisor is a planning partner and helps clients understand what they could do to succeed financially. The scope of an advisor’s role is broad and ever-increasing. Here are some of the duties of a financial advisor:

  • Create financial health questionnaires for clients
  • Create a financial map/plan
  • Evaluate prospective investments
  • Monitor client’s finances regularly

Who Is A Financial Analyst?

A financial analyst advises organizations or businesses on fiscal matters, using factors such as the company’s financial strength, market trends, and predicted outcomes of specific deals. Most financial analysts have a degree in accounting, finance, or business. They are comfortable with numbers, interpreting data, and deriving recommendations from available information.

The primary role of financial analysts is to create financial models that forecast the outcome of certain decisions or policies from businesses. Financial analysts gather data while monitoring previous transactions and similar market trends to achieve this.

Financial analysts’ roles differ from one workplace to another. The specialization an analyst chooses plays a considerable role in his day-to-day duties. On the whole, financial analysts give policy-makers the information needed to manage assets and increase revenue.

Related Resource: How to Become an Actuary: Degree Requirements & Certification Exams

Where Do Financial Analysts Work?

Financial analysts are also known as investment analysts or securities analysts. Their job involves collecting, monitoring, and evaluating data to make predictions and recommendations in different sectors. The most common places for a financial analyst to work include:

  • Government regulatory firms
  • Banks
  • Financial planning institutions
  • Insurance companies
  • Portfolio management providers
  • Investment advisory firms

Difference Between Financial Advisor And Financial Analyst

There are so many similarities between financial analysts and financial advisors. However, they are two different designations entirely. Financial advisors focus on helping investors and clients to build investment portfolios and save. Financial analysts are more concerned with research for tax returns, market trends, and consultations for businesses.

Many investment firms and financial institutions employ advisors and analysts to work with their clients. In cases like this, the advisors maintain relationships with the clients while analysts do all the research work.

Although they both offer financial advice, planning firms mainly hire advisors. In some cases, they are self-employed. In contrast, analysts provide investment advice for businesses differently.

It is important to note that the financial analyst profession is the more complex of both worlds. It is so because analysts usually start in junior positions and work their way up the professional ladder. On the other hand, the financial analyst follows a career pathway similar to an insurance agent. The financial advisor has to search for clients and build a reputation, which might involve cold calls and networking.

Financial analyst roles fit people that are comfortable sitting behind a desk and handling lots of responsibilities in a short turnover time. Meanwhile, individuals who enjoy the profession’s social opportunities are great fits for financial advisor jobs.

Work Schedule

One of the significant differences between a financial analyst and a financial advisor is their work-life balance schedule. The daily routines for most financial analysts include long hours behind a desk with a steady workflow and predictable schedule. As analysts begin to climb up the professional ladder, they might have to work off-hours, too, especially if they are in charge of a large business’ assets. Additionally, it is common to see analysts working in teams with other departments in organizations. Financial analysts also travel to win over potential investors.

On the other side of the coin, financial advisors see a lot of variety in their work schedules. Based on the Bureau of Labor Statistics data, at least a quarter of financial advisors work for themselves. The work schedule of a financial advisor depends on the availability of clients, which means work fills weekends and evenings.

Senior analysts tend to work more and generally take on more hours than their junior counterparts. The reverse is often the case for financial advisors. As advisors advance in their careers, they tend to work less. This trend is true for advisors with a solid client base and work structure, and many senior advisors work less than 40 hours every week.

What You Should Know About Financial Analysts And Advisors

  • Both career choices require a college degree.
  • Most professionals in both fields have a degree in either economics or finance.
  • Financial analysts and advisors earn above the national average salary.
  • Financial analysts work with firms, while advisors advise clients or individuals.
  • The income for financial analysts is more stable. In contrast, a part of the income for financial advisors comes in the way of commissions.

How To Become A Financial Analyst or Advisor

The National Center for O*Net Development reports that people drawn to financial careers are planners. These people choose financial careers because of their love for evaluation and comparison, making it easy for them to conclude from what they’ve learned. Natural planners can go to the extent of plotting graphs and charts to compare the different options when they go shopping. With these attributes, a career as a financial analyst would be natural. However, that’s not all you need to succeed, as you’ll need to take significant steps to actualize your dream to become a financial analyst.

Here are a few steps you must take when becoming a financial analyst:

Get Educated

One of the most important first steps to becoming a financial analyst is getting an education. Although you could go for more general courses like statistics and economics, your best bet is a Bachelor of Science in Finance focusing on Finance Planning & Analysis. This bachelor’s degree will set you on the right career track.

Related Resource: 16 Highest Paying Jobs for Finance Majors

Get Certified

After getting a bachelor’s degree, most graduates dive into working for investment, banking, and accounting firms. At this point, an additional certificate may be unnecessary. As they begin to make advancements in the financial path, another certification or two becomes necessary.

One of the most recognized licenses is that of FINRA. Firms that offer financial services must align with reputable regulations to shield consumers from shady or fraudulent deals. The Financial Industry Regulatory Authority (FINRA) is an agency that regulates financial firms. Since many financial analysts are involved in transactions that involve financial sales, a license from FINRA is essential. In light of this, many hiring companies prefer financial analysts with a FINRA license.

However, in some cases where a FINRA license is compulsory, prospective hirers are not strict on the requirements before offering employment. The Bureau of Labor Statistics states (BLS) states that most companies will still hire unlicensed applicants if they have other qualifications that make them an excellent fit for specific roles. Additionally, many firms will hire applicants who show great potential and sponsor them to get a FINRA license.

Get Some Experience

Getting the proper education and necessary licenses are significant steps to becoming a successful financial analyst or advisor. However, the financial field is a highly competitive career. Therefore, it is vital to get some hands-on experience to differentiate yourself from other applicants. One way to do that is through internships.

Internships are invaluable. They allow you to learn on the job and build your professional network. Another great thing about internships is that internships often lead to full-time employment.

It is crucial to get experience as early as possible. Data from O*Net reveals that relevant work experience is a significant factor for employers while hiring future financial analysts.

Get A Master’s Degree

While hands-on experience is a significant step, financial analysts can take alternative routes to gain the necessary skills. One way is by earning a master’s degree. Many professionals go for a master of business administration degree (MBA). However, a Master of Science in Financial Analysis is also a great option.

You will attend seminars and lectures for this degree and produce a thesis on a topic that incorporates everything you have learned during the program. Additionally, students may have to attend training in quantitative methods, craft projects, and attend speakers’ events with top professionals.

Licenses for Financial Advisors

Although financial advisors do not have specific license requirements, it is essential to have different securities licenses to offer investment products. The license an advisor holds is dependent on the compensation method and the type of products they sell. Here are some of the most common licenses for financial advisors.

Series 6 License

The Financial Industry Regulatory Authority (FINRA) offers the Series 6 license. Financial advisors with this license can sell a limited scope of products like variable annuities and mutual funds. However, this license does not authorize them to sell bonds or individual stocks.

Series 7 License

Another license issued by FINRA is the Series 7 license. Financial advisors who hold the Series 7 can sell most investment products, from bonds and futures to stocks and options. Additionally, Series 7 holders can sell packaged securities. The only securities outside their scope are real estate, commodities, and life insurance, all of which have their own licenses. Due to the broad nature of the Series 7 license, it is the most difficult license for financial advisors to acquire. The Series 7 exams go alongside the Securities Industry Essentials (SIE) exams. Advisors who pass both can get a general securities registration.

Series 63 License

In addition to the Series 6 or 7 licenses, financial advisors must have a Series 63 license to operate in any state. The process is more straightforward and shorter, taking up just 75 minutes, and deals with laws and regulations.

Series 65 License

Another license that financial advisors need to operate within states is the Series 65 license. It is for financial advisors who earn fees instead of commissions. The Series 65 exam covers much of the same content as the Series 7.

Special Certifications for Financial Analysts And Advisors

Additional certificates are not a prerequisite if you are pursuing a career in finance. However, it increases your career opportunities. Most of these certificates are not available to new analysts or advisors. They can apply for them after some experience in the field. These are some of the most popular certifications:

  • Certified Financial Planner (CFP)
  • Chartered Investment Counselor (CIC)
  • Certified Private Wealth Advisor (CPWA)
  • Personal Financial Specialist (PFS)
  • Certified Government Financial Manager (CGFM)
  • Chartered Financial Consultant (ChFC)
  • Certified Fund Specialist (CFS)
  • Certified International Investment Analyst (CIIA)
  • Financial Risk Manager (FRM)
  • Certified Investment Management Analyst (CIMA)
  • Certified Management Accountant (CMA)
  • Chartered Financial Analyst (CFA)
  • Certified Public Accountant (CPA)

Top Skills For Financial Analysts And Advisors

Apart from the degrees and professional certificates and licenses, it is beneficial to learn, develop, and hone the following skills.

Analytical Skills

Finance professionals should have the capacity to take information and analyze it to determine what is best for a client.

Interpersonal Skills

A financial advisor has to establish trust with the client and answer their questions and concerns.

Math Skills

Financial advisors and analysts must be good at mathematics.

Communication Skills

Financial analysts and advisors should communicate their ideas clearly while dealing with clients. Also, they should be able to use simple language to explain complex financial terms.

Sales Skills

A financial advisor must be persistent and persuasive to gain new clients.

Computer Skills

Financial analysts and advisors must be knowledgeable in using software to create portfolios, analyze trends, and make predictions.

Decision-Making Skills

A financial analyst should be skilled in analyzing data to reach conclusions and advise clients whether to hold, buy, or sell a stock.


Professionals in the finance field should pay close attention to every fact, as even one tiny mistake could prove costly.

Salary For Financial Advisors And Analysts

Every day, new financial products are introduced to the market, creating novel challenges in the industry. With these challenges arise a growing need for financial analysts with relevant knowledge and up-to-date insights.

Both financial advisors and analysts earn above the median salary for Americans. Among business professionals, analysts and advisors have a more extensive pay package than compliance officers and insurance but less than marketing managers and sales managers. However, there is a slight difference in the salaries of both professions.

Financial analysts have a salary structure that is more stable than that of their counterparts who work as advisors. The reason is simple: analysts mainly concentrate on the mean salary as they have a more extensive salary base and very few opportunities for bonuses. On the other hand, advisors work for fees and commissions, and their incomes are spread out. An analyst has a higher floor for earnings and a lower ceiling than advisors monthly.

Related Resource: The 19 Highest Paying Business Degree Jobs

Salary for Financial Analyst

The financial analyst profession was the most promising job in finance. There is no sign of that slowing down anytime soon. The Bureau of Labor Statistics projects a growth of 6% in the employment rate of financial analysts from 2020-2030.

According to BLS, the average salary for financial analysts is approximately $83,660. The pay rate of financial analysts largely depends on their industry. For example, analysts who work in commodity contracts, securities, and other related fields can earn as much as $98,850. At the same time, those in the insurance sector can expect an average of $76,860 annually. Entry-level financial analysts earn around $57,000 annually.

Salary For Financial Advisors

According to the Bureau of Labor services, the median pay for financial advisors is $89,330 annually. Also, BLS projected a 5 percent increase in the employment of financial advisors. Although that is lower than the average for all professions, there should be around 21,500 job openings each year.

Entry-level advisors can expect to earn around $44,100, while those with established careers can earn as much as $208,000 yearly. The industry an advisor chooses can also play a role in their salary. For example, the median annual wages for financial advisors in securities, commodity contracts, and other financial investments and related activities is $97,020. In contrast, their peers in credit intermediation and other associated activities earn an average of $75,730.

Self-employed personal advisors and those who work for financial planning and investment firms earn their wages by charging a predetermined percentage of the assets they manage. They also earn fees on insurance, stock sales, and commissions for the financial products they sell.

Take the Next Step in Your Career Today!

Whether you choose to become a financial analyst or a financial advisor, there is no limit to what you can achieve. Aside from the growth opportunities along the career path, it also has excellent earning potential. For more information to help you decide on the best career path, check out our educational resources.

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