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What does a Chartered Financial Analyst (CFA) do?

A chartered financial analyst (CFA) helps businesses and individuals make educated decisions on how to best invest their money. They are financial analysts that have successfully completed the CFA Program from the CFA Institute, a rigorous program that requires hundreds of hours of study and the mastering of several different areas, including accounting, economics, asset valuation, portfolio management, securities analysis, corporate finance and financial markets. After earning certification through the CFA Institute, a chartered financial analyst has obtained licensing through the Financial Industry Regulatory Authority.

chartered financial analyst

Most financial analysts receive their certification through the course of their career. Employers do not typically expect you to have this distinction as a new hire.

Different Kinds of Chartered Financial Analysts

There are several different kinds of financial analysts, including investments analysts, securities analysts and ratings analysts. Chartered financial analysts are divided into two groups: those who conduct business on the “buy” side and those who work on the “sell” side.

  • “Buy” Side
    Chartered financial analysts that work on the buy side are responsible for helping institutional investors. The analyst helps the business determine their needs and assists them in developing investment strategies.
  • “Sell” Side
    Chartered financial analysts that work on the sell side helps companies price and sell their products.

What Education or Training Do I Need To Become A Chartered Financial Analyst?

If you are pursuing an entry level financial analyst career, a bachelor’s degree in a field such as accounting, economics, finance, business administration or statistics is required. In order to become a chartered financial analyst, you must complete the CFA Program from the CFA Institute. This entails a 3 part, 18 hour exam. In addition to this, many employers prefer to hire an individual that has completed a master’s degree in a business-related field.

What does a Finance Director do?

Are you a creative problem solver with strong interpersonal and analytical skills? Would you like to study something in college that permits you to choose from a variety of career paths, many of which pay dividends in the six-figure range? If you can honestly answer “yes” to both, you may want to consider becoming a financial manager. It takes a lot of hard work but the rewards are more than worth the effort.

finance director

Job requirements for financial managers and finance directors

Finance directors work with a variety of organizations, directing investment activities, overseeing the preparation of financial reports, and executing cash management strategies. The US Bureau of Labor Statistics (BLS) states that financial managers typically enter the job with at least a bachelor’s degree, but many also hold a master’s degree or some form of professional certification. Common areas of study for the aspiring financial manager or director include finance, accounting, economics and business administration.

The BLS goes on to stress that possessing strong interpersonal, math and business skills goes a long way toward success in this field.

One of the most attractive aspects of pursuing this career path in college is that it qualifies you for a variety of lucrative financial opportunities. Financial managers may be best thought of as a collection of highly trained financial specialists whose specific duties vary with their titles. Some examples of jobs financial managers hold include the following:

  • Controllers
  • Treasurers and finance officers
  • Credit managers
  • Cash managers
  • Risk and insurance managers
  • Branch managers

Job outlook and salary information for finance managers

The BLS expects overall employment growth for this industry to occur at a rate that’s about as fast as average for all occupations, around eight percent. Job growth should be fueled primarily by regulatory changes, economic expansion, and the continuing globalization of financial activities. In particular, branch, risk and insurance managers should be in high demand.

Yet even with this kind of healthy occupational growth, competition for jobs remains keen. The BLS states that candidates who have obtained graduate degrees and certification enjoy the best opportunities for employment.

What does a Financial Planner do?

Financial planners provide a valuable service to individuals who need help with personal finances, investments and retirement planning. Starting with a general overview of income, expenses and savings, a financial planner guides a client through the process of setting short term goals, long term goals, and a step-by-step action plan. Financial planners, also known as personal financial advisors, recommend appropriate types of savings plans and investments and can place orders for stocks, bonds or insurance.

financial planner

An effective financial planner will meet one-on-one with a client, conducting an interview that covers more than just the individual’s savings and investments. Personalized financial planning also takes into account:

  • Outstanding debts, such as mortgages, car loans, credit cards
  • Tax bracket and tax advice needs
  • Insurance coverage for property, health care and disability
  • Investment risk tolerance
  • Wills or estate plans
  • Retirement wish list

Preparation for a career as a financial planner

A college education is required for a prospective financial planner. You should expect to earn at least a bachelor’s degree in a relevant field like business, accounting, finance or law. Course work generally includes math, economics, investments, taxes and estate planning. Many candidates in this competitive field go on to earn master’s degrees. Financial planners also need licenses for direct buying and selling of stocks, mutual funds, bonds and insurance.

Good people skills are crucial for financial planners. According the Bureau of Labor Statistics, 29 percent of personal financial advisors are self-employed, placing a high priority on attracting and keeping a healthy client base. Even those who work for banks, brokerages or securities firms deal with a variety of personalities and financial sophistication levels and need good marketing skills and the ability to explain and simplify complex financial concepts.

Employment outlook for financial planners

With so many baby boomers approaching retirement age, expecting to live longer, and relying more heavily on their retirement funds, the job outlook for financial planners is strong. The Bureau of Labor Statistics projects employment growth of 30 percent for this occupation.

Salary and career advancement are possible through promotion and certification. You could seek promotion to a higher management level, or move to a position as private banker at a large bank. You could found your own business or start a branch office of a securities or brokerage firm. After spending three years as a working personal financial advisor, you could apply for a Certified Financial Planner credential. Testing for this certification is provided by the Certified Financial Planner Board of Standards.