The Financial Analyst Crucible

19 July 2022

By : Jonathan Patrick

There is a reason that professional investors managing billions of dollars of capital lean on financial analysts for information they use in their investment decisions. It’s because a financial analyst has to go through a crucible of challenging collegiate-level coursework, extra certifications, and more.

Following the movements of successful financial analysts can be helpful for your own investment decisions. To better understand why a financial analyst is qualified to act as an investment guide, let’s take a deeper look at all it takes to be a financial analyst.

What Degree Do Most Financial Analysts Receive?

Virtually every financial analyst job posting requires an undergraduate degree. While there are often preferred areas of focus such as Finance, Accounting, Economics, and Statistics, there are financial analysts who have come to the industry with different undergraduate degrees.

Those degrees focus their coursework on quantitative and qualitative methods of analyzing investments and include courses such as:

• Corporate Finance studies capital budgeting techniques, risk versus return decisions, market efficiency, and capital structures.
• Consumer Finance Decision Making focuses on consumer finance behaviors, loan products, and more.
• Monetary & Global Economics hinges around macroeconomics, events and policies, and global supply chains.

Like many finance jobs, a Master’s degree is not a requirement. But, it is highly preferred. Particularly if the job is with a larger investment bank or firm such as Goldman Sachs, JP Morgan Chase, etc.

On The Job (OTJ) Training

So far, we have looked at all the educational requirements and training that a financial analyst typically undergoes. All of that typically occurs while they are still earlier in their career. In fact, more education and training occurs as their career grows.

Companies that hire financial analysts also have training regimens that they must go through. Well-known investment banking firms, such as Goldman Sachs, have training programs that all new analysts participate in. At Goldman, this is called the Goldman Sachs University. During the program, new hires are reintroduced to similar topics that they study in college. However, instead of studying finance, accounting, and other disciplines, the new hires are exposed to those principles in action using Goldman Sachs case studies. JP Morgan Chase also has a dedicated training program for new analysts. They offer various programs depending on the new hires’ area of focus, with the training lasting upwards of multiple years. During this time, analysts are exposed to a variety of other departments, including Strategy, Digital, Cyber Security, Operations, Finance and Risk Management, and Controls.

As analysts progress in their careers, they take on more senior roles.

Most analysts will start as Junior Analysts supervised by those with more senior status. This allows the financial analyst to receive mentorship from an experienced team member.

To progress to a Senior Analyst role requires experience and demonstrable success, as well as often requiring a Master’s degree. From a senior analyst role, professionals can expect their next roles to be in supervisory positions in portfolio management or as fund managers.

Financial Analyst Certifications

If you are looking for a financial analyst who has risen to the top of their profession, then those that have gone on to receive additional certifications can be a good signal.

Chartered Financial Analyst (CFA)

One of the more well-known programs is the Chartered Financial Analyst certification process. Which is managed by the CFA Institute.

The path to becoming a CFA is not simple. Just to be considered for the opportunity to take the exam, you must have the following:

• An undergraduate degree. There is no distinction as to the focus of your degree.
• Be an undergraduate student within 11 months of graduating. So, no year-long gap years are allowed.
• Have a combined 4,000 hours of professional work experience and/or higher education acquired over at least three sequential years.

The exam process is made up of three different exams that are staggered out over roughly seven months. Candidates must pass the prior exam to be eligible for the next section. What is most impressive is the pass/fail rate of each section. The first section of the exam has a 42% pass rate. While the second and third sections have 45% and 54% pass rates, respectively.

Certified Public Accountant (CPA)

For financial analysts, getting their CPA designation can be extremely helpful. Many analysts choose to sit for their CPA exam, or opt to start the profession with an Accounting degree. Knowing how to clearly review and decipher financial statements is incredibly vital in this line of work; thus having the CPA qualification gives access to important techniques and understanding necessary for successful financial analysis. Reviewing company finances for publicly traded companies is a major responsibility for those in this field–statistical accuracy being at the top priority–making the ability to quickly process these statements fantastic, if not essential, tooling possessed by a certified public accountant.

Certified Management Accountant (CMA)

The CMA Institute oversees this program. While CPAs are often focused on understanding tax laws and tax filings, CMAs are focused on financial planning, budgeting, and investment decision support as it relates to operating a company.

Financial Risk Manager (FRM)

Investment decisions are all about managing risk versus reward. A Financial Risk Manager focuses on changes and trends in financial markets globally to plan for ways to mitigate those risks. This particular certification does not require any prerequisite degrees or even time in business.

Is Being a Financial Analyst Rewarding?

After reading all that a financial analyst has to go through to be prepared for the role, you might be wondering if such a career path is rewarding.

From a compensation perspective, the CFA Institute, the organization that manages the CFA certification, notes that the average annual salary for a CFA is $126,000. If you add in bonuses and other compensation, that number reaches $177,000. Remember that salary is for those financial analysts who go on to achieve the CFA certification. Financial Analysts who do not take that path earn a substantially lower income, which is a little over $81,000, according to the Bureau of Labor Statistics. Still, that level of earnings is well above the national average.

Of course, everything comes with a tradeoff. Financial analysts are known to work in very hectic environments that often require pulling long hours to stay in sync with the markets.

Knowing that an analyst is working so hard to monitor the markets is one more reason that leaning on experienced analysts can benefit your investment strategy.

How Does An Analysts Experience Help the Average Retail Investor?

One of the best ways to enhance your investment decision-making skills is to watch how experienced analysts perform their due diligence. However, most retail investors don’t have access to that analysis. That is where AnaChart comes into play.

By leveraging our technology, everyday investors can access how top financial analysts perform, all the way down to specific stocks and investments those analysts cover.

To learn more, head to AnaChart home page.

Last Updated: March 2026. This article has been reviewed and updated to reflect current market conditions and the latest analyst data available on AnaChart.

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