How To Become A Financial Analyst With No Experience?

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The finance industry has seen a lot of ups and downs in the past. From the Great Recession in 2008-2009 to the current Covid-19 pandemic, finance analysts stayed at the forefront to guide governments and individuals about where and how to make safe investments to help the economy rise again. The job market for financial analysts has a bright future as evidenced by the number of people pursuing a degree in finance or alternatively one of the reputable fast online business degrees, but switching to this field is still daunting.

Getting an entry-level job in this field without any early experience is possible.  You may graduate to more advanced roles and boost your earning potential by working as an entry-level financial analyst. A recent graduate Financial Analyst may anticipate earning a starting salary of $70,000 or more. Here is your complete guide on becoming a financial analyst with no experience.

What Do Financial Analysts Do?

Image Source: Corporate Finance Institute
Image Source: Corporate Finance Institute

Financial analysts use data to make predictions and recommendations about securities and investments and are thus also known as securities or investment analysts. They collect, evaluate, and monitor data for businesses to make wise and profitable decisions. Banks, financial planning institutions, portfolio managing firms, insurance companies, government regulatory firms, and investment advisory firms employ monetary analysts. You can expect to work with many clients and numbers while factoring in the political and geographical changes to understand their impact on finances.

What Does A Corporate Financial Analyst Do?

Image Source: Kaplan Schweser
Image Source: Kaplan Schweser

The main job of a corporate financial analyst is to use company data to make sound financial decisions for the company. The analyst should be able to forewarn the company about bad or risky decisions and to pull out of deals that might collapse. They help the company identify areas of interest for investment and expanding business and project the returns from the assets.

There are two types of corporate financial analysts:

  • Buy-side financial analysts
  • Sell-side financial analysts.

As the name suggests, the buy-side analyst recommends which investments to buy, whereas the sell-side tells which ones should be sold. Economic analysts are also asked to monitor the company’s assets and expenditures and make reports for higher administration.

How To Become A Financial Analyst With No Experience?

Image Source: EDHEC Online
Image Source: EDHEC Online

Working as a financial analyst is not only extremely rewarding but is a highly demanding job as well. One in three analysts works up to 70 hours a week, and the starting salary is $70,000+ per year. Though most companies require you to have at least 3 to 4 years of working experience, you have a chance now, even if you’re just starting or are self-taught. Below are some tips on how to become a financial analyst with no experience:

Increase Your Network

Image Source: University of Nevada, Reno
Image Source: University of Nevada, Reno

In the financial industry, how much you know is only as important as who you know in the industry. Start by talking to people you know, like friends and alums, and expand your network. Ask your acquaintances and friends to introduce you to people in the industry. Meet contacts over coffee or lunch and discuss recent topics and news. Be polite and professional, and never ask for a job directly. Always ask for suggestions and advice about financial analysis instead of requesting an appointment.

Stay Updated

In the financial industry, things are constantly changing. Your interviewer or potential employer would appreciate it if you knew the latest trends in finance and economics. Be aware of what is in the news and how it impacts businesses and investments. You can read about financial information or watch videos online to help you out. Watching business news and talk shows is the most comprehensive way to stay updated. Apply what you learn to your network to gain some attention from relevant people.

Start Blogging

Image Source: Phocas Software
Image Source: Phocas Software

Who said blogs were only for lifestyle writers? One of the best ways to showcase your knowledge is to write about it. Not only will you be reaching out to a broader audience, but you will also be inviting people to discuss things with you through your blog. You can write opinion pieces, informational blogs, or a mix of both. You can publish your work on WordPress, Medium, SeekingAlpha, or even share it on social media websites like LinkedIn and Facebook. Remember to keep the comments and sharing options open to the public.

Use A Trading Simulator

Image Source: Bankrate
Image Source: Bankrate

A trading simulator gives you a fundamental understanding of the stock market. You can also build a mock investment or financial assets management portfolio online. You can put these on your blog or resume to showcase your talent to future employers. It is the best way to show people that you know how to talk about financial talk and how to walk the analysts’ walk. Three of the best online trading simulators are listed below:

  1. Wall Street Survivor
  2. HowTheMarketWorks
  3. MarketWatch Virtual Stock Exchange

Know The Lingo

Image Source: Barron’s
Image Source: Barron’s

Knowing the terms used in financial settings like Wall Street will make it easier for you to engage with people. You can have a better discussion with professionals on their terms and learn about the market even before you get a job. It is crucial as, unlike other financial analysts, you will fit right in with the experienced pros.

Pursue An Online Financial Analyst Program

There are plenty of online certifications to get you the knowledge you need to become a financial analyst. Getting a certificate, whether gratis or paid, shows your employer that you have enough motivation to learn a challenging new thing by yourself. Not only that, but you will also get to know how to do financial modeling and forecasting, which lies at the heart of a financial analyst’s job.

Get An Internship

It doesn’t matter whether the internship is paid or unpaid as long as you gain some practical experience (and possibly a verification certificate). Some firms count an internship as work experience, which can increase your chances of getting a job. An internship can also open the door to your future career in this field.

Financial Analyst Skills

Image Source: Hays
Image Source: Hays

To become a great financial analyst, academic knowledge must combine academics and try-specific skills. Employers look at both hard and soft skills while evaluating potential employees. Skills that a financial analyst is expected to have include:

Accounting Skills

Strict rules and regulations govern the finance world. Formal education in accounting principles, standards, and techniques assists the financial analyst in managing cash flows, maintaining ledgers, performing cost analysis and reductions, calculating budgets, etc. Unlike some jobs where experience may suffice, as a financial analyst, you will need formal education and training in accounting skills to do well in your field.

Interpersonal Skills

Contrary to past practices where a financial analyst was assigned to their desk, crunching numbers and creating reports to be used by higher administration, financial analysts now have to deal with clients directly. Communicating ideas and theories simply to your investors, persuading them to agree to your point, and giving presentations about future projects depend on your interpersonal skills. They also come in handy when collaborating with teammates and across departments.

Communication Skills

Image Source: EMLV
Image Source: EMLV

Financial analysts often must manage businesses and clients who must become more familiar with financial jargon and terms. Explaining financial concepts with examples and analogies so they make sense to a non-technical person increases their trust in you. You may use flow diagrams, bar graphs, pie charts, line graphs, and any other visual aid to communicate your point across the table. At the same time, non-verbal communication is just as effective as well.

Problem-Solving Skills

Financial analysts constantly solve complex equations and mathematical series to understand finance problems. They may also be required to develop solutions to help clear the company’s debts and liabilities. All of these need a financial analyst to have impeccable and creative problem-solving skills.

Technical Skills

With technological advancement, modern software makes it easier and faster to run the analysis. Software like Hyperion, SAP, SQL, Quickbooks, etc., help the financial analyst. Knowing how they work and when and where to use them is essential for a financial analyst.

Leadership And Management Skills

Though these are unnecessary, they help a financial analyst with their work. They may also be given charge of the entire finance department and be asked to collaborate with teams across departments. Communicating across groups, leading projects, and mentoring new talent are all desirable skills for a financial analyst.

Business Awareness

A financial analyst should understand how specific actions and investments will affect the marketplace supply and demand by the company. The financial analyst must understand what the company does and its business structure.

Analytical Skills

A financial analyst should be able to analyze situations and plan and prioritize the company’s financial moves accordingly. Strategic planning and analytical thinking go hand in hand with a financial analyst.

In short. A financial analyst needs to demonstrate his abilities to be able to work independently as well as in a team when need be.

A Common Starting Salary For Financial Analysts

Image Source: Jobs.ie
Image Source: Jobs.ie

An entry-level financial analyst makes, on average, $67,624 annually. This sum may change depending on where you reside, the type of work you do, and your level of expertise. Your earning potential can be increased by honing your analytical and communication abilities through internships and other opportunities.

If you seek a Master of Accounting or Master of Business Administration degree, or if you hold a financial analyst certification, the employer could be more ready to pay you more.

Financial Analyst Job Description

Image Source: Rasmussen College
Image Source: Rasmussen College

Financial analysts are responsible for all the economic decision-making and studying and reporting data. The duties of a financial analyst include the following:

  • Perform financial reporting and financial forecasting using available data and metrics
  • Create financial models to aid decision making
  • Use historical data and results to identify trends and room for improvement
  • Work in tandem with the accounting department to ensure accurate financial reporting
  • Preparing financial data and reports to be used by higher administration
  • Perform market research, data mining, business intelligence, and valuation comps
  • Proficiency with Microsoft Excel and query software like Access and SQL
  • Help senior management make tactical and strategic decisions using data and financial modeling
  • Establish standard costs by collecting operational data

 Is Financial Analyst A Good Career?

Being a financial analyst is a popular career choice among finance, accounting, and even business graduates. It is a high-paying and challenging job that may require extended work hours. A financial analyst gets to work with different companies and experience a lot of other economic settings.

To conclude, becoming a financial analyst with no experience requires some extra hard work on your part. It will undoubtedly be challenging, but knowing the right people can make all the difference between you and the next candidate.

FAQs

How long do the courses take to complete?

Typically, the course is completed in 4-5 months [100-200 hours].

Is any prior job experience required?

Occasionally, sure, but not in FMVA.

Which school is the finest for training to be a financial analyst?

CFI is the most excellent and cost-effective way to study financial modeling.

What percentage of financial analysts, on average, pass their exams?

50% is the usual pass rate.

Conclusion

When putting advice on becoming a financial analyst without experience into practice, it is crucial to adopt a comprehensive strategy. But it’s essential to remember that actively looking for internship opportunities before landing full-time entry-level employment would be advantageous.

Preparation and attention are necessary for a job as a financial analyst. Additionally, it can bring absolute joy that comes from contributing to the company environment and cash incentives.

John Otero

John Otero

John Otero is an industry practitioner with more than 15 years of experience in the insurance industry. He has held various senior management roles both in the insurance companies and insurance brokers during this span of time. He began his insurance career in 2004 as an office assistant at an agency in her hometown of Duluth, MN. He got licensed as a producer while working at that agency and progressed to serve as an office manager. Working in the agency is how he fell in love with the industry. He saw firsthand the good that insurance consumers experienced by having the proper protection. John has diverse experience in corporate & consumer insurance services, across a range of vocations. His specialties include Major Corporate risk management and insurance programs, and Financial Lines He has been instrumental in making his firm as one of the leading organizations in the country in generating sustainable rapid growth of the company while maintaining service excellence to clients.