How to become a financial analyst?

If you are interested in a job full of numbers and financial strategies, then the role of Financial Analyst might be the perfect fit for you. With the growing need for experts who can understand market trends, the role of Financial Analyst has become more important than ever.

In this article, we will be discussing the role, jobs, and responsibilities of a Financial Analyst along with the qualifications and skills required to be one.

What is a Financial Analyst?

A financial analyst is a professional tasked with analyzing a company’s past and present financial data to assess future revenues and expenditures. These experts forecast returns on investment in stocks, compile financial information aligned with a company’s objectives, minimize expenses, and enhance overall financial performance. Typically, they are employed in various settings such as securities firms, banks, insurance companies, mutual funds, pension funds, venture capital firms, government agencies, and similar organizations.

Financial analysts examine a company’s financial information to help the company make decisions about its investments and portfolio. They use data mining techniques to extract crucial information and provide advice on whether to buy or sell the company’s stocks, bonds, and other investments.

How to become a Financial Analyst?

Becoming a financial analyst in India involves several preparatory steps, and it’s essential to start planning your career path early on.

1. School-level Preparation

Begin by successfully completing your 10+2 education with a focus on commerce or science. Having subjects like mathematics or accounting in your class 12 curriculum can facilitate the process of clearing certifications later on.

2. Undergraduate Preparation

Following the completion of your 12th standard, pursue admission in a bachelor’s degree program. Many universities offer degrees such as BBA-Finance and BCom, which are well-suited for aspiring financial analysts. Admission criteria typically consider the percentage secured in class 12th.

Entrance exams such as IPU CET, JNU EE, CAT, MAT, and CMAT are commonly required for admission to these courses.

3. Postgraduate Preparation

After obtaining your BBA/B.Com degree, consider pursuing further education like an MBA or M.Com which significantly enhance your salary package and career prospects spanning about 24 months and are available at various universities with specializations including finance, retail management, marketing, and more.

Alternatively, you may opt to gain some industry experience before pursuing a master’s degree in a relevant specialization.

4. Work Experience

For those already working, accumulating 1-2 years of experience in a finance-related field is beneficial before transitioning into a role as a financial analyst.

5. Gain Relevant Certifications

Acquiring relevant certifications is crucial for starting a career as a financial analyst in India. Consider pursuing certifications that align with the requirements of the industry.

There are numerous courses one can pursue to become a Financial Analyst, including BCom, BBA, BSc in Finance, and MBA. Certifications such as CFA are also highly relevant, showcasing expertise and skills in the field. Top colleges offering courses relevant to Financial Analyst roles include SRCC, LRS, Woxsen University, Loyola College, and NMIMS Mumbai.

Job Responsibilities of a Financial Analyst

Financial analysts are tasked with the following job responsibilities:

1. Analyzing past and present financial data of an organization to estimate future expenses and revenues.
2. Performing financial functions such as auditing, planning, budgeting, assessing costs, and project control.
3. Evaluating depreciation, proposals, rates of return, investment opportunities, operating records, and financial statements.
4. Studying financial data to provide insights on investments and financial strategies.
5. Organizing data to conduct analysis using financial metrics like earnings per share, return on equity, yearly growth, and more.

Eligibility Criteria for becoming a Financial Analysts

Below are some fo the qualifications that are needed to become a Financial Analysts:

• Candidates must possess a bachelor’s degree in finance, accounting, economics, business administration, or a related field.
• The Chartered Financial Analyst (CFA) designation holds high esteem in the finance sector. Candidates are encouraged to pursue this or similar certifications to showcase their expertise and enhance career prospects.
• Many Financial Analyst positions mandate relevant work experience. Candidates can explore entry-level roles to apply theoretical knowledge in real-world settings, fostering skill development.
• They must successfully pass the CFA certification, which is divided into three levels: CFA 1, CFA 2, and CFA 3.
• Alternatively, candidates may pursue a master’s degree such as an MBA to enhance their career prospects. Specializations such as retail management, operations management, marketing, and HRM are available options.

Certification Required to become a Financial Analyst

Here are some financial analyst certification programs you may consider exploring:

Certified Financial Planner (CFP):

Tailored for seasoned financial planners, this certification demonstrates proficiency in honesty, ethics, and meticulousness concerning financial matters. The CFP exam encompasses 170 multiple-choice questions covering financial planning, investment, tax planning, risk management, and more.

Certified Investment Management Analyst (CIMA):

Geared towards financial planners, analysts, and wealth management professionals, CIMA requires a minimum of 3 years of work experience. Completion of the CIMA education program, passing a background check, and holding a CIMA certificate in business accounting or similar qualifications are necessary. The certification exam, lasting five hours, covers subjects like risk measurement, ethics, investment policy, due diligence, and asset allocation.

Certified Management Accountant (CMA):

Offered by the Institute of Management Accountants (IMA), USA, CMA certification demands a Bachelor’s degree or professional accounting certification, along with two years of work experience. Candidates must also be IMA members and pass both parts of the CMA course within three years of each other. CMAs typically work as management accountants, Chief Financial Officers, corporate controllers, etc.

Chartered Financial Analyst (CFA):

Regarded as prestigious in the financial services and management realm, the CFA designation is awarded by the CFA Institute, USA. Eligibility includes a bachelor’s degree in any discipline or four years of work experience with an international passport. The CFA course typically spans 3-4 years, with a course fee ranging between Rs 190,000- 5,86,000.

Skills Required to become a Financial Analyst

To excel as a financial analyst, you must cultivate a range of skills. Here are some key ones:

1. Problem-solving skills: A proficient financial analyst is adept at resolving challenges. You should be capable of addressing company debt issues swiftly to avert crises and instill confidence in investors by managing financial matters effectively.
2. Analytical skills: This entails the ability to gather and analyze data efficiently. Proficiency in Excel and database management for presentations is crucial. Analysts often compare the results of various companies as part of their duties, underscoring the importance of analytical skills.
3. Financial modeling: Mastery in financial modeling is essential. This encompasses familiarity with various financial models such as merger and acquisition and IPO modeling.
4. Communication skills: Effective written and oral communication skills are paramount for financial analysts. Presenting complex financial information to clients necessitates excellent communication abilities. Simplifying intricate financial terminology for clients is essential.
5. Mathematical skills: Strong mathematical skills are indispensable, encompassing the analysis of financial statements, probability, mental math, statistics, etc. Financial analysts engage in extensive number crunching, underscoring the need for proficient mathematical skills.
6. Accounting skills: A sound understanding of accounting is essential for efficient work in finance. Familiarity with accounting principles, standards, and techniques is necessary. Additionally, proficiency in calculating budgets, conducting cost analysis and reduction, managing cash flow and general ledger, interpreting bank statements, utilizing accounting programs, and understanding the mathematical formulas involved is crucial.

Financial Analyst Courses

Numerous courses cater to candidates aspiring to become financial analysts. Among the most popular options are BCom, BBA, BSc in Finance, and MBA. Below is a table outlining details for some of the top courses.

Parameters	BCom	BBA Finance	MBA Finance
Eligibility	Class 12	Class 12	Graduation from any stream
Entrance Exams	CUET, IPU CET, NPAT, AIMA UGAT, SUAT	SAT, IPU CET, NPAT, CUET	APICET, MAHCET, UPSEE, TSICET
Top Colleges	Delhi University, Calcutta University, Mumbai University	NMIMS, Amity University Mumbai, BITS School of Management, SP Jain Institute of Management and Research	Christ University, Woxen School of Business, PIBM Pune, Amity University
Course Fees	INR 2,500 – INR 65,000	INR 2 – INR 5 L	INR 4 – INR 20 L
Average Salary (INR)	INR 20,000 – 45,000 per month	INR 4 – INR 5 LPA	INR 6 – INR 7 LPA
Top Recruiters	Deloitte, KPMG, Ernst & Young, Pwc	TCS, Accenture, HDFC Bank, EY	Goldman Sachs, Morgan Stanley, JP Morgan Chase & Co, Barclays, KPMG

Top Colleges for Financial Analysts

Many colleges in India offer courses that can pave the way for a career as a Financial Analyst. The table below outlines details for the top finance colleges:

College Name	Location	Average Fees (INR)
Shri Ram College of Commerce (SRCC)	New Delhi	29,605
Lady Shri Ram College for Women (LSR)	New Delhi	19,870
Woxsen University	Chennai	2.70 L
Loyola College	Chennai	76,000
Parul University	Vadodara	68,850
NMIMS Mumbai	Mumbai	3.25 L
ICFAI Foundation for Higher Education (IFHE)	Hyderabad	2.80 L
Alliance University	Bangalore	9 L
Amity University	Noida	3.51 L
Institute of Management and Entrepreneurship Development (IMED)	Pune	1.50 L

Financial Analyst Salary

In India Financial analysts earn 2.1–12.1 LPA, averaging 4.5 LPA. Experience, education, employer location, and industry affect pay. New financial analysts may earn less than those with experience or specialisation.

The following table lists the salary range for various Financial Analyst designations.

Designations	Average Annual Salary (INR)
Senior Financial Analyst	6.5 Lakhs
Financial Associate	3.5 Lakhs
Associate Analyst	3.8 Lakhs
Senior Analyst	6 Lakhs
Research Analyst	3.5 Lakhs
Business Analyst	6.9 Lakhs
Credit Analyst	5 Lakhs
Senior Research Analyst	5.8 Lakhs

Financial analysts’ ability to learn, analyse, and adapt to changing market situations is crucial to their job progress. Management, senior analysis, or specialisation in corporate finance, investment banking, or risk management are advancement opportunities.

An MBA or Chartered Financial Analyst (CFA) certification might boost job prospects and compensation. Building industry ties and staying current are important to financial analyst success. Hard work, training, and preparation help financial analysts progress and earn more.

How to Become a Financial Analyst? – FAQs

What is the qualification for financial analyst?

If you are looking how to become a Finance Analyst, then you must pass a 10+2 level of education from a recognised board in India. Then opt for a bachelor’s degree in a related field and then opt for a master’s degree. We have mentioned below the Finance Analyst exams, bachelor’s degree and master’s degrees.

Do financial analysts need CFA?

Financial analysts do not need CFA certification to work in the field, but these credentials can improve their employment chances and earning potential. The CFA requires a combined 4,000 hours of education and experience.

Can I become financial analyst after BCom?

Several universities offer a bachelor’s degree in BBA-Finance and BCom which are suitable courses to become a financial analyst.

What is the highest package of financial analyst?

Financial Analyst salary in India ranges between ₹ 2.0 Lakhs to ₹ 12.0 Lakhs with an average annual salary of ₹ 5.9 Lakhs.