How Much Do Financial Analysts Make? A Comprehensive Salary Guide

A financial analyst is one of the best career options in the financial services industry. Whether in banking or government agencies, they provide relevant industry-specific insights and guide an organization's decision-making process. 

Are you considering becoming a financial analyst and want to learn more about it? Do you contemplate how much do financial analysts make? Understanding financial analysts salaries and the factors that affect their compensation can help you decide if this is the right career option for you. 

In this comprehensive guide, we'll look at the factors affecting financial analysts salary ranges and how to improve your earnings. So, join us and gain a clear understanding of what your future as a financial analyst might look like. 

What Does a Financial Analyst Do? 

Financial analysts use their expertise to assist individuals and organizations with financial decisions. They analyze financial data, trends, and performance metrics to identify business opportunities and guide investment decisions. Although their specific duties and responsibilities depend on the organization they work for and the level of expertise, in general, they:

• Evaluate current and historical financial data

• Examine a company's financial statements to determine its value

• Recommend individual investments and collections of investments or portfolios

• Build financial models to forecast trends and predict business scenarios

• Compile written reports on financial statuses and recommendations 

How Much Do Financial Analysts Make?

With their keen analytical skills and deep understanding of financial markets, financial analysts play a pivotal role in helping organizations make informed financial decisions. And their importance in determining the financial future of the companies is reflected in their competitive salaries. 

According to the Bureau of Labor Statistics (BLS), on average, financial analysts earn around $112,950 annually, but this figure ranges from $76,880 to $129,970. Besides the base salary, they also may receive a sign-on bonus, earn an annual performance bonus, and secure an equity package. Moreover, they can receive benefits like parental leave, unlimited vacation, or even fitness memberships. 

Factors influencing salary

While looking at the average salary, becoming a financial analyst can be a financially rewarding career, the compensation you get depends on various factors. Let’s explore the main  elements that influence your salary as a financial analyst. 

1. Location

The place where you live and work is a highly contributing factor that determines your compensation. For example, working in metropolitan areas such as New York or San Francisco can be highly rewarding earning $146,450 and $143,240 respectively. These salaries reflect the high demand for financial talent and the high living costs in these areas. 

Alternatively, working in states such as Louisiana (where the average salary sits at $65,070) or Kentucky (with an average salary of $74,340) may not deliver high substantial gains. 

2. Experience

Like with other professions, years of experience affect your financial analyst salary. The longer you work as a financial analyst, the more knowledge and skills you develop. As a result, you may earn more than when you entered the field.

For example, entry-level positions like junior financial analysts tend to have a lower salary of $58,023 compared to the senior financial analyst's salary of $96,423. Therefore, the longer you stay in the profession, the higher your salary will be. 

3. Education

Another factor that impacts your financial analyst salary is education. According to BLS, professionals with a master's degree earn about $1,737 weekly, whereas those with a bachelor's degree earn $1,493.

A bachelor's degree in business, finance, economics, or accounting  is typically the minimum educational requirement for entry-level financial analyst positions, such as a junior financial analyst. However, a master's degree in financial analysis can open doors to higher-paying positions such as fund manager, portfolio manager, or senior financial analyst.

How To Increase Your Salary as a Financial Analyst?

While the earning potential greatly depends on the factors mentioned above, there's still room to increase your salary by following some tips and tricks. Let's delve right in! 

Continuing education

As with many industries, a higher level of education in finance analysis can lead to a higher salary. Pursuing further education, such as a graduate degree, can help deepen your knowledge, enhance your skills, and make you a more valuable asset to employers. Continuing education can open the door to advanced roles with higher salaries.

For example, a master in financial analysis (such as the online program OLLU offers) allows you to build the necessary data-analytic skills to conduct advanced-level analysis and interpret complex financial data and instruments. As you gain an in-depth focus on financial analysis and expertise, graduate studies can open doors to opportunities in financial analysis, portfolio management, and risk assessment, which provide substantial higher salaries. 

Certifications

Another way you can increase your salary as a financial analyst is by getting certified. Earning relevant financial analysis certifications not only validates your skills but also sets you apart from other professionals.

Two most popular certifications you can obtain include Chartered Financial Analyst (CFA) and Certified Public Accountant (CPA). Additionally, you also can  get professional certificates such as the Financial Analysis and Corporate Performance offered by OLLU which enhance your expertise in corporate finance, financial institutions, financial analysis, portfolio management, and more. 

Besides upgrading your skills, these certifications strengthen your position during salary negotiations as they highlight your comprehensive understanding of applied finance.

Experience

As we mentioned above, experience within the profession can lead to higher salaries. As such, gaining diverse experience and expertise in specialized areas of finance can greatly impact your salary.

For example, you can gain experience in investments and learn how to evaluate an investment's potential return and risk. Similarly, you can gain expertise in cash flow performance and learn how to create cash flow forecasts to help organizations make informed business decisions. You can also explore risk management and learn how to identify threats to an organization's capital and earnings.

Gaining expertise in these areas of finance can distinguish you from other professionals and increase your earning potential due to your specialized knowledge and skills. 

Staying updated on current trends

Given the dynamic nature of the job market, keeping yourself informed about the latest trends within the profession is a powerful tool in your pursuit of a higher salary. Understanding the current market trends, average salary ranges, and in-demand skills in finance can give you a competitive advantage during job interviews and salary negotiations. 

You can follow industry news through blogs, newsletters, and industry publications to stay updated on current trends. Additionally, attending webinars and conferences is a great way to connect and discuss the latest trends and forecasts with other professionals. Lastly, joining professional networks can help you gain firsthand insights from your field.

Following such strategies can help you better understand your value in the job market and confidently negotiate a salary that reflects your expertise and market value. 

Networking

Another way to increase your salary as a financial analyst is networking within the finance sector. However, networking isn't just about exchanging business cards at corporate events; it's about building meaningful relationships that can significantly contribute to your career growth. Effective networking can provide you with valuable industry insights, mentorship, and job opportunities and even lead to a higher salary. 

Conferences, seminars, and webinars are great places to meet like-minded professionals. Websites like Eventbrite and Meetup can be a great start to find networking events you can attend. You can also connect with professionals in your industry on LinkedIn through which you can find numerous virtual events. 

Is Financial Analyst a Good Job?

Like any profession, being a financial analyst comes with its own considerations. Thriving in your financial analyst job requires you to adapt to a fast-paced and demanding environment. As a financial analyst, you're responsible for an individual's or company's financial health. With so much money on the line, your stress levels can be through the roof. You may also need to work long hours, including nights and weekends, during financial reporting cycles or fiscal year-ends.

On the brighter side, being a financial analyst can be a fulfilling career path with good career prospects. The need for professionals who can assess financial data and make informed recommendations continues to grow, with the BLS reporting an 8% employment growth over the decade.

Furthermore, this profession offers advancement opportunities, allowing you to climb the ladder to positions such as senior financial analyst, chief financial officer, or investments manager.

Conclusion

Financial analysts are critical in guiding businesses to make informed financial decisions. Therefore, as a financial analyst, you have the potential to earn a high salary, which depends on factors like experience, location, and education. However, these salaries aren't set in stone. You can utilize various strategies to increase your earning potential and advance in your career. 

So, what are you waiting for?

Whether you're a student exploring financial careers or a financial professional looking for a career change, you can start your journey today and unlock a world of possibilities where your analytical insights can significantly impact the financial landscape. 

Frequently Asked Questions:

Can you make a lot of money as a financial analyst?

Yes, a financial analyst tends to have high earning potential, especially if you further your education, gain diverse experiences, network, and stay current with developments in the field.

Which analyst has the highest salary?

The highest paid analysts typically work in specialized fields such as investment banking or equity research. Investment bankers earn a salary of $118,333, whereas equity research analysts earn a salary of  $217,575.

How to Become a Financial Analyst?

To become a financial analyst, you must earn a bachelor's degree, complete an internship or get an entry-level position, obtain CFA and CPA certifications, and consider earning a master's degree.