What Financial Analysts Do

Interested in investing? Let’s get to know about financial analysis and what financial analysts do.

Financial analysts, also known as investment analysts or securities analysts, assess the financial performance of a company or industry and make recommendations to investors to help them decide where and how much to invest.

Financial analysts work for investment banks, insurance companies, mutual and pension funds, securities firms, the business media, and other businesses.

Different Types of Financial Analysis

Financial analysts read company financial statements and analyze commodity prices, sales, costs, expenses, and tax rates in order to determine a company’s value and to project its future earnings. They often meet with company officials to gain a better insight into the firm’s prospects and to determine its managerial effectiveness.

Financial analysts may work on the “buy” side, for companies or organizations with money to invest, or on the “sell” side, to help their companies sell securities. They often focus their analysis on a specific industry or region, such as the utilities industry or Asia.

Some experienced analysts, called portfolio managers, supervise a team of analysts and help guide a company in selecting the right mix of products, industries, and regions for their investment portfolio.

Others who manage mutual funds or hedge funds perform a similar role and are generally called fund managers.

Still other analysts, called risk managers, analyze portfolio decisions and determine how to maximize profits through diversification and hedging.

Personal financial advisors work with individuals or families to set up investments such as college education funds, or perform retirement or estate planning. Some personal financial advisors also handle life insurance policies and tax advice. As such, accounting courses are recommended for aspiring PFAs, and certifications may be necessary in certain states, or if you choose to specialize in certain types of advice.

Personal financial advisors generally operate as self-employed individuals. This means that, in addition to your understanding of business and mathematical acumen, you must have a certain flair for selling yourself and networking in order to grow your client base. 


Financial analysts need at least a bachelor’s degree, often in accounting, statistics, finance, economics, or business administration and management.

Coursework in statistics, economics, and business is required, and knowledge of accounting policies and procedures, corporate budgeting, and financial analysis methods is recommended. Many analysts earn a master’s degree in finance, or an MBA.