A Day in the Life of a Financial Analyst
Financial analysts gather information, assemble spreadsheets, write reports, and review all non-legal pertinent information about prospective deals. They examine the feasibility of a deal and prepare a plan of action based on financial analysis. Being an analyst requires a vigilant awareness of financial trends. Analysts have a heavy reading load, keeping abreast of news stories, market movements, and industry profiles in financial newspapers, magazines, and books. Most analyst jobs are in banking houses or for financial-advising firms, which means following corporate culture and wearing corporate dress. If a deal demands it, they must be prepared to travel anywhere for indeterminate lengths of time. Those who wish to rise in the industry should note the necessity of significant “face time,” attending social events and conferences and spending downtime with people in the profession, which can be expensive; this social circle tends to gravitate to high-priced attire and costly hobbies, habits, and diversions.
Analysts sacrifice a lot of control over their personal lives during their first few years, but few other entry-level positions provide the possibility of such a large payoff come year’s end.
Many employers use bonuses, which can be equal to or double the beginning analyst’s salary, to attract and hold intelligent personnel. Successful financial analysts become senior financial analysts or associates after three to four years of hard work at some firm. Those with strong client contacts and immaculate reputations start their own financial consulting firms. Many work as analysts for about three years and then return to school or move on to other positions in banking.
Financial analysts work long hours, and deadlines are strict. “When you have to get the job done, you get the job done. Period,” emphasized one. The occasional fifteen-hour day and night spent sleeping in the office is mitigated by the high degree of responsibility these analysts are given. The long hours breed a close kinship. Over 65 percent called their co-analysts extremely supportive, and many labeled them a “major reason” they were able to put up with the demanding work schedule. Most people become financial analysts because they feel it is the best way to immerse themselves in the world of finance and a great way to earn a lot of money. They’re right on both counts, but be aware that the immersion is complete and somewhat exclusive, and although people earn a lot of money, few have the free time to spend it all how they’d like to.
Paying Your Dues
Entry-level positions are highly competitive. A bachelor’s degree in any discipline is acceptable, so long as the potential analyst’s course of study demonstrates an ability to understand and work with numbers. Those with computer science, physical science, or biological science backgrounds may find the field more welcoming than do liberal arts majors. Business majors don’t necessarily have an advantage; each company trains the incoming class of financial analysts before they begin the job. To become a financial analyst you need to have a strong sense of purpose-it is not a job for those who are uncertain that their future lies in the financial world. Candidates must be able to meet and interact with clients, handle a heavy work load, prioritize and complete work under strict deadlines, work as part of a team, and work with computer spreadsheet and valuation programs. Many find the travel stimulating initially, but “after your third week in Jopbsug, Tennessee, at the ball-bearing plant, it gets old.”
Present and Future
The obligations of today’s financial analyst were covered by more experienced individuals as late as the 1970s, but with rapid deregulation of ownership in industries in the early 1980s and the rapid growth of the financial sector during those same years, the need arose for a structured and continuing stream of intensively trained professionals familiar with the financial industry. Larger firms, which consolidated their programs in the early 1990s, are cautiously beginning to expand them again, finding opportunities in such new and developing industries as software development, biotechnology, and aerospace technologies.
Quality of Life
PRESENT AND FUTURE
Long hours, low base pay, and a fair amount of responsibility characterize the early years. Analysts travel, pore through documents, meet with clients (on a highly supervised basis) and prepare valuation analyses. They work together on teams that are rotated quickly when needed. Lack of control over hours and personal life are common in the first two years. The burnout rate is surprisingly low in the beginning-around eight percent-because most who enter the industry have few illusions about the demands the job will place on them.
FIVE YEARS OUT
At the five-year mark, those who remain have achieved the rank of “associate” or “senior financial analyst.” Responsibilities shift from producing to pitching, and client contact increases. Many study for professional degrees during these years. Over 70 percent of those who began in the field have either changed firms, returned to school, or changed jobs within the industry. While loyalty is tangible between analysts, the same sense of fidelity doesn’t seem to apply to the companies that employ them. Salaries remain relatively stable but bonuses, which once were merely large, can become astronomical; hours, for those who are successful, can actually increase.
TEN YEARS OUT
Successful financial analysts have moved on to vice-presidential positions in the investment banking, financial analysis, or valuation departments of the company. While bonuses still account for the bulk of income, salaries are significant as well. Hours can decrease but responsibility increases and pressure develops to solicit new business. Responsibilities also include personnel decisions and hiring.