The position of financial analyst is one of the most highly sought after in the financial sector. Not only does it pay well (a median of $80,310 per year according to the Bureau of Labor Statistics), it often gives you the chance to venture into other career opportunities.
By studying current economic conditions and relevant financial information, financial analysts help individuals and businesses make sound investment decisions. They evaluate the performance of bonds, stocks and other financial instruments.
The outlook for financial analysts is very bright; employment levels are expected to grow by 12 percent in the period 2014 – 2024 (BLS). That’s 32,300 jobs in the span of a decade, a rate faster than the mean for all professions. Let’s have a look at the reasons for this boom.
1. The Wide Range of Financial Products Available
The financial sector undergoes constant innovation and change. The past couple of years have seen securities become ever more complex causing an increase in demand for specialists who have the acumen to navigate the world of financial products.
2. Businesses Need More Financial Experts
A look at the duties of a financial analyst can explain why they are vital to the success of many businesses. An analyst studies both business and economic trends from which they are able to ascertain viable investment vehicles for the firm. This is important as it adds value to the firm and is a source of possible future revenue.
Furthermore, by studying current and historical data, they can gauge a company’s trajectory and plot a course that will lead to improved profit margins. They also meet with managers to convey information regarding the company’s financial health in easy to understand reports and presentations. In short,analysts help the company be more efficient, save and make money as well as gearing it towards growth.
3. Hedge Funds
The hedge fund industry is huge. As of November 2015, the industry manages almost $3.2 trillion according to the most recent Preqin Global Hedge Fund Report. Although the industry has shown signs of slowing down, there were still 829 new funds launched in 2015 and 695 closed leading to a net gain of 134 new funds. In the same year, hedge funds added $71.5 billion in capital inflows. Hedge funds make money by using pooled funds to engage in high risk investments in the hope that they will be achieve massive capital gains.
These investments are decided upon through the use of highly analytical methods which makes the hedge fund sector a great fit for financial analysts.To take advantage of the burgeoning need for analysts, many opt to take the path towards an MBA.
An MBA helps one develop the skills needed to manage different areas of a business effectively. There are various specializations; one of the MBA careers in finance is a financial analyst. To become an analyst, a great affordable choice would be the Ohio University Online MBA program which Fortune magazine calls the 3rd best value American MBA program. Corporate finance jobs are available to those with an MBA with specialization in finance or business analytics.
4. A Recovering Economy Necessitates Sound Financial Advice
Economic growth is lethargic even now, 8 years after the recession. It is still recovering and as such, businesses need analysts to find viable avenues of growth and profitability. Financial analysts are also required to avoid the pitfalls that led many companies into ruin in the last recession while still being daring enough to move into new sustainable growth areas.
5. The Baby Boomers are Retiring
This means there will be vacancies as existing financial analysts either move up into the more senior roles vacated by those retiring; or when those occupying analyst positions reach retirement age.
Conclusively, more than anything else,it is the growth in the range of financial products that has really boosted the need for financial analysts. This trend does not show signs of slowing down for the foreseeable future as financial products continue to evolve and businesses try to stay afloat.