12 + 1 Skills Financial Analysts Need to Master

Financial analysis is one of the most coveted career paths in the financial services industry. Every company, whether big or small, needs a financial analyst. That's because they provide a comprehensive financial overview, enabling better forecasting of cash flow and results so businesses can plan for multiple outcomes and make more strategic decisions.

But while this is such a lucrative career path, breaking into this field can be tricky. Besides the high competition, you must learn specific skills through education and experience to fulfill your responsibilities. As a Financial analyst, you must be well-rounded with soft, technical, mathematical, and interpersonal skills.These skills financial analyst need to master are crucial for providing valuable insights and recommendations.

That said, in this article, we'll explore some of the most essential skills a financial analyst needs to master to build a career in this field. In addition, we'll share tips for improving your skills as a financial analyst.

Skills

• Communication Skills
• Analytical Skills
• Financial Literacy Skills
• Accounting Skills
• Technical Skills
• Organizational Skills
• Problem-Solving Skills
• Leadership and Management Skills
• Interpersonal Skills
• Critical Thinking Skills
• Excel Skills
• Computer Skills

What are Financial Analyst Skills?

As a financial analyst, there are specific skills that will help you build a successful career in this industry. These skills include:

Communication Skills

One of the critical skills any financial analyst should possess is the ability to communicate effectively. Being able to relay important business information to your partners and workmates makes it easy to give crucial financial advice.

Effective communication can help resolve any looming issue over the phone or email with the stakeholders. Additionally, this skill is more useful when picking up on non-verbal cues.

Analytical Skills

To be a successful financial analyst, you must have the ability to plan, prioritize, forecast, and rank financial problems. That will put you on par with your peers in the industry or even give you an edge over the rest.

Analytical skills are the core values of any successful financial analyst. These skills will help you gauge and solve problems while utilizing strategic planning, market real-time data, and your research to make sound decisions.

Financial Literacy Skills

Understanding current financial events is one of the critical skills any financial analyst should have. It helps you make an informed and strategic decision based on the recent moves in the market.

For instance, you can learn more about the investment market, interest rates, and inflation data to make strategic investment trades on behalf of your clients. In fact, having financial literacy skills could help you perform better in your tasks.

Accounting Skills

As a financial analyst, you should have outstanding accounting skills to perform your tasks properly. Accounting skills allow such professionals to understand financial reports and statements.

Financial analyst experts are responsible for understanding and interpreting financial documents such as balance sheets, income statements, and overall cash flow. In simple terms, it’s crucial to have accounting skills as a financial analyst.

Technical Skills

Technical skills involve the speculative prediction of future prices depending on past data on the price action. It’s a valuable skill that helps financial analysts predict price changes over time and place strategic plans to leverage on the change.

Organizational Skills

Typically, a financial analyst will have several financial documents at a specific moment. That said, it’s crucial for such professionals to have impeccable organizational skills. That allows such professionals to keep tabs on the data they’ve collected. It also helps preserve and take note of important records, information, or numbers.

Problem-Solving Skills

Problem-solving is one of the most significant traits of any successful financial analyst. You must be willing to learn how to react in the face of adversity while still maintaining a calm and collected thought process.

That being said, having problem-solving skills will ensure you can manage complicated challenges that come your way and find appropriate solutions. More importantly, it means you have the ability to solve financial equations that would otherwise jeopardize the future of your client’s investment.

Leadership and Management Skills

Financial analysts are often in charge of the finance department’s operations. These experts, when properly equipped, will take full leadership roles. As such, it’s crucial to have leadership and management skills to steer their respective organizations in the right direction, especially financially.

Interpersonal Skills

Even though it’s not as high on the list of skills a financial analyst should have, interpersonal skills are still as important. Learning how to relate with your co-workers, investors, and partners will help you interpret nonverbal cues and present your project. This skill is essential when working with your teammates on specific analytical tasks.

Critical Thinking Skills

Critical thinking goes hand in hand with problem-solving; in most cases, these two skills are usually combined. That’s because, as a financial analyst, you should possess critical thinking skills to properly respond to any problem you might face.

Ultimately, critical thinking will help you find the best investment opportunities for your company or investors as you keep your company’s financial records on track.

Excel Skills

Excel is typically one of the most commonly used software in this industry. Learning how to use this software will ensure you are effective in your work and get the job done in as short a time as possible.

Computer Skills

General computer skills are crucial in almost all industries. Being an expert financial analyst requires at least basic computer skills to ensure you can present your projects without any hiccups.

Willingness to Learn

Finally, you must be willing to learn and continue honing your skills. Taking on a Master in Finance is a step in the right direction. Improving your craft and learning about the latest advancements in the job market will ensure you always have a competitive edge against your fellow professionals.

Financial Analyst Roles & Responsibilities

Financial analysts work with business data, market conditions, competitor behavior, and news to create a financial model to help organizations make better business and investment decisions.

Although the specific roles and responsibilities may vary depending on the industry and organization, some of the everyday tasks for financial analysts include:

• Creating financial forecasts, budgets, and long-term financial plans to help guide the organization's financial strategy.
• Evaluating investment opportunities such as stocks, bonds, or real estate to determine their potential risks and returns.
• Identifying financial risks and providing recommendations for mitigating them.
• Monitoring industry developments and news to identify potential investment opportunities.
• Preparing and presenting financial reports to the management or external stakeholders
• Analyzing the financial performance of the organization and identifying areas for improvement.
• Conducting research on financial markets, industries, and competitors to make informed recommendations.
• Analyzing the organization's cost structure and identifying opportunities to reduce costs or improve efficiency.
• Ensuring that financial activities comply with regulatory requirements and accounting standards.

What's the difference between a Financial Analyst and an Equity Research Analyst?

A career path in finance is the best option for anyone with strong skills in data analysis, math and critical thinking. You can consider working as a financial analyst or equity research analyst.

But keep in mind, while both involve finance and analysis, there are some significant differences in their roles and responsibilities, salary, and clientele. Some of these differences include:

1. Job Focus: Although both analysts work with a company's finances and investments, the job focus and duties aren't the same. Financial analysts analyze various aspects of an organization's finances, including financial planning, budgeting, risk assessment, and investment. On the other hand, equity research analysts have a specialized focus on analyzing stocks and the equity market. They evaluate and provide recommendations on the stock market, including buy, sell, or hold recommendations.
2. Clientele: Since financial analysts have a broader scope, they can work in various industries and for different types of organizations. They serve diverse clients, including consulting firms, government agencies, and corporations. Equity research analysts typically work for asset management firms or investment banks. Their primary clientele is often institutional investors such as mutual funds, hedge funds, or high net-worth individuals. Usually, this leads to fewer job opportunities.
3. Salary: According to salary data from Indeed, equity analysts typically earn higher salaries than financial analysts. Financial analysts have an annual base salary of approximately $67,648, while equity analysts enjoy a higher average base salary of around $83,189 per year. However, it's important to note that these figures can vary significantly based on various factors, including the company's size, geographic location, level of education, and years of experience in the field.

Learn How to Improve Your Financial Analysts Skills

If you want to take your career as a financial analyst to the next level, you must brush up your current skills or pick up some new ones. Although this process can be daunting initially, you can follow these steps to build your knowledge and achieve your goals.

Identify Areas for Improvement

Start by identifying the skills you need to improve on. For instance, you may feel there's accounting or bookkeeping software you are not very efficient with, or maybe you need to stay up-to-date with the latest accounting technology.

Set Improvement Goals

After identifying the areas you need to work on, set goals to motivate you toward mastering the specific skill. For instance, you can set a goal to learn how to use QuickBooks in four months. Or you can spend an hour with a more skilled colleague to show you how to navigate the program.

Use Tools and Resources

Sometimes, the one thing holding back your data analysis capabilities is not utilizing the tools and resources available. If that's the case, you must venture out of your comfort zone and familiarize yourself with new tools or software like Tableau, R, SQL, Python, or other data visualization tools.

Attend Professional Training

To advance in your career, you must continuously learn and stay up-to-date with trends in the industry, financial regulations, and emerging technologies. Consider attending workshops, seminars, and webinars to expand your knowledge. For instance, you can attend a leadership workshop to improve your skills.

Implement Technology

You can leverage technology to improve your financial analyst skills. For example, you can utilize advanced software tools for data analysis and financial modeling to streamline your tasks. Incorporating such technology into your workflow improves your effectiveness as a financial analyst. Also, you can take advantage of online educational resources to develop your skills.

Study for Certification

Whether you want to build a strong foundation in a particular topic or brush over concepts you already know, you should consider enrolling in training programs and taking courses. For instance, you can pursue advanced degrees such as a Master in Finance at EAE Business School Madrid or a Chartered Financial Analyst (CFA) to expand your skills and boost your credibility.

Find a Mentor

Another great advantage of pursuing courses to better yourself as a financial analyst is that it allows you to learn from experts in the field. It also allows you to interact with other professionals in your industry.

For instance, when you take a Master in Finance from EAE Business School Madrid, you interact with highly qualified teachers with extensive knowledge and experience in the finance sector. They will offer valuable guidance and real-world insights that textbooks can't provide.

How to Become a Financial Analyst?

To become a financial analyst, you need basic qualifications like experience, skill, and knowledge. That said, here are the steps you need to follow to pursue a career as a financial analyst:

• Get a Bachelor's Degree in Finance, Accounting, Economics, or a related field to build strong analytical and quantitative skills.
• Secure an internship or entry-level position in finance. Develop relationships with financial firms to network with industry professionals who may help you find a job after college.
• Consider earning certifications like CFA (Chartered Financial Analyst) for added credibility.
• Connect and network with professionals in the industry and join relevant associations for Finance officers.
• Focus on a specific niche within finance—for instance, risk management or investment analysis.
• Start applying for financial analyst positions and be prepared for assessments and interviews.

How to Highlight Your Financial Analyst Skills in the Workplace?

When working as a financial analyst, there are specific steps you can take to highlight your financial analyst skills in the workplace effectively. These tips will help you stand out and quickly advance in your career.

• Create accurate, insightful financial reports showcasing your data analysis and reporting skills.
• Stay updated with industry trends, regulations, and new tools, showing your commitment to growth.
• Collaborate with colleagues and offer financial expertise to support decision-making in various departments.
• Identify financial challenges, propose solutions, and take the initiative to implement improvements.
• Ensure accuracy in all your work, from financial statements to models. That helps people to build trust in your skills.

Types of Financial Analysts

There are several different types of financial analysts, but here’s a rundown of the top job roles in the market today:

Portfolio Managers

Portfolio managers are financial analysts who manage their clients’ portfolios to help them achieve their financial goals. This role involves identifying new investment opportunities, taking strategic decisions, staying ahead of the current market events, and understanding how to manage their client’s risk appetite.

Fund Managers

Fund managers, also known as hedge fund managers, are experts who manage non-conventional asset investment options by using several strategies to ensure lucrative returns to their investors.

These experts make direct investments and use leverage and derivatives to increase investor returns. Fund managers take their role seriously, especially when it comes to managing mutual funds.

Rating Analysts

A rating analyst specialist is someone who assesses a specific company’s ability to repay their debt, including bonds. Such experts help investors and other stakeholders determine the risk linked to a particular market, organization, or investment asset.

Risk Analysts

Risk analysts more or less have the same role as rating analysts. They help organizations expand or invest in new markets. These experts review, analyze, and provide financial advice to help the company increase its profit margins, reduce risk, and enhance growth.

Final Thoughts: What Skills Should Financial Analysts Posses?

As data continues to be one of the most valuable resources in every business, putting in time to build your skills as a financial analyst is crucial. It will help improve your performance in your workplace and make you one of the most qualified professionals in the industry.

But as you build your skills, make sure you learn from knowledgeable and experienced people. And that's where a Master's in Finance at EAE Madrid Business School comes in. It will help you expand your skills and take your career to the next level. The best part is that you will get to interact with other highly qualified peers in the industry.