Why Should One Become A Financial Analyst?
Since the world is swiftly placing more importance on working with data, the need for financial analysts has increased exponentially over the years and is expected to surge by 7% between 2019 to 2029. This demand for financial analysts is not restricted to the finance industry. Other sectors such as government agencies, investment firms, banking, and businesses that work with data also recruit financial analysts. The rewards that one can reap being a financial analyst are unparalleled.
Financial analysts need to keep themselves updated with the stock market, varied interest rates, and current affairs related to finances as that will help them apply their existing knowledge and upskill themselves continuously. They will be able to keep up with the diverse economic changes and stay relevant for newer job opportunities.
While the job market sees constant fluctuation, financial analysts can enjoy job security due to the nature of their job. As financial analysts engage with critical industry information, replacing them in a short period of time can prove to be very expensive for companies. Additionally, since the essential job of a financial analyst is to help people decide how to invest their money, one can also look into working as a consultant for multiple companies, or starting their own firm and choosing their own clients.
Unlike other finance-based roles such as investment banking where one is often overworked, a financial analyst has the liberty to enjoy work-life balance. This is possible because though the role is crucial, it does not demand 80-90 working hours per week. This way, an analyst can limit his or her work to regular working hours.
What Are The Duties Of A Financial Analyst?
Essentially, a financial analyst’s main job is to understand and simplify the nitty-gritties of the stock market for their clients and suggest appropriate investment decisions. However, that is not all that a financial analyst is required to do.
They are also required to write detailed reports to present their findings and set investment principles for companies as part of brokerage. For this, they would need to work closely with the accounting team. They are also responsible for building automated forecast tools that would enhance productivity.
Furthermore, a financial analyst would need to develop technical analyses like charts and finance models. They must evaluate market health to support and guide their clients. They need to gather data and forecast changes in revenue and propose increases or decreases in expenditure.
What Are The Skills Needed To Become A Financial Analyst?
A financial analyst's job is to avert catastrophes with the expertise they bring onboard. Let us take a look at some essential skills required to be a good financial analyst. For aspiring financial analysts: make mental notes of the skills that you currently possess or need to develop from the list below.
This is required to understand scenarios, come up with appropriate questions, refer to accurate resources and compile data to arrive at a doable solution.
2. Simplify Complex Data:
An analyst who operates with a logical mindset and demonstrates the ability to work with complex data in the simplest way is said to have analytical skills. One must also possess visualisation skills to present this data in a simple format.
3. Tech know-how:
It is not enough to have financial knowledge, companies these days prioritise candidates who are proficient in using computer programming languages such as Python, SQS, SAS, and so on. These languages help in navigating through bulk data easily. Also, one must also be able to easily work with MS Excel as it is a priority tool that is used for complex calculations and evaluations. The knowledge of MS Powerpoint also helps in working with other company software applications.
Today, it is important to have good oral and written communication skills for any job role. However, it becomes imperative for financial analysts as they need to simplify and present complex financial information to their clients in a simple format. This will also help while writing reports and during client presentations.
5. Soft Skills:
Some essential soft skills that will come in handy for the role of a financial analyst are leadership, decision-making, and building relationships.
How to Become a Financial Analyst?
If you have decided to become a financial analyst, there are some essential academic milestones that you must achieve.
First, it is important that you get admission with a bachelor’s degree. Many universities and colleges provide admission based on the results of senior secondary examinations (10+2). However, some universities may also ask you to appear for entrance examinations such as
- Delhi University: DUET (Delhi University Entrance Test)
- Indraprastha University: IPU CET (Indraprastha University Common Entrance Test)
- Jamia Millia Islamia: JMI EE (Jamia Millia Islamia Entrance Examination)
- Jawaharlal Nehru University: JNU EE (Jawaharlal Nehru University Entrance Examination)
To become a financial analyst, the knowledge of subjects such as mathematics, business administration, accounting, and statistics is important. So, candidates must acquire any of the following degrees:
- B.Com in Accounts and Finance
- B.Com (Hons)
- B.Com in Banking and Insurance
- BBA (Hons)
Next, potential financial analysts can pursue two career paths. The first is to continue their academic journey without any gap between their bachelor’s and master's degrees. The second path is to get on-field experience with entry-level jobs before pursuing a master's course. In both cases, a master's degree is important.
Below are the entrance examinations that one must appear for in order to pursue an MBA (Masters of Business Administration):
- Common Admission Test (CAT)
- Management Aptitude Test (MAT)
- Xavier Aptitude Test (XAT)
- Symbiosis National Aptitude Test (SNAP)
- Common Management Aptitude Test (CMAT)
Prospective candidates can refer to the schedule given below for these entrance examinations.
In order to get admission in the programme for an MBA in Finance, candidates should score at least 50% in their bachelors. During the selection process, the combination of their scores in their bachelor's degree and entrance examination would be considered.
Tips to Crack MBA Entrance Examinations
The MBA (Masters of Business Administration) entrance examinations mostly last 120 to 180 minutes. The examination papers are usually divided into three to four sections. These sections include:
This section tests the candidate’s language proficiency through grammar and reading comprehension questions. To prepare for this, candidates must read a variety of passages that will help in developing their comprehension skills.
This section tests the candidate’s logical and analytical thinking. Here, it is important that one pay attention to detail, be quick to think and come up with out-of-the-box solutions.
This section deals with a candidate’s mathematical skills. However, rather than focusing on complex theories, candidates must familiarise themselves with number functions and focus on increasing their mathematical speed.
Since some of these entrance examinations also include negative marking, it is important that candidates be extremely careful when answering the questions.
- It would also help if candidates solve past papers and time themselves while doing so
- To improve vocabulary, candidates can also use game-based apps to make learning fun
- Solving puzzles and situation-based questions will help in developing logical thinking
However, along with the preparation, it is important to balance it out with nutritious food, adequate time breaks, and appropriate sleep. This will ensure that you are mentally and physically ready for the examination.
Breakdown of MBA in Finance
Below is the MBA syllabus that will be covered in the two-year course of MBA in Finance.
Specialisation Available in MBA Finance
Within MBA Finance, students can pursue two specialisations:
- MBA Financial Management: Focuses on concepts like statistics for business, portfolio analysis, money and capital markets, advanced marketing, and microeconomics
- MBA in Banking and Finance: Focuses on the banking aspect of the finance industry
Job Prospects and Salaries Available after MBA Finance
An MBA in Finance assures that students get hired for a variety of roles in top companies across the industry. These profiles include:
- Corporate Finance
- Corporate Banking
- Asset Management
- Private Equity
- Credit Risk Management
- Hedge Fund Management
Some of the top companies that hire potential financial analysts are:
- HSBC Bank
- Bain & Company
- Boston Consulting Group
- JP Morgan
- Goldman Sachs
The salaries for financial analysts who are freshers after MBA Finance in India is usually between ₹3 lakh to ₹7 lakh per annum. For experienced candidates, this could be between ₹12 lakh to ₹16 lakh per annum.
Some Frequently Asked Questions About MBA in Finance
How is an MBA degree different from PGDM?
While PGDM is a diploma course offered by selected autonomous institutions, an MBA is a degree offered by colleges that are affiliated with universities. In the job market, MBA holds a higher relevance than a PGDM.
To enter IIMs, what is the minimum percentile that one must score in CAT or other entrance examinations?
Getting into IIMs is not only dependent on the result of the entrance examinations, but also on a candidate’s profile. However, recent trends show that a candidate should have a 95 and above percentile to get through any of the IIMs.
Post entrance examinations, what is the final selection process?
First, candidates are shortlisted based on their scores and the cut-off that is decided by the specific universities. Then, the candidates are called for group discussions and individual interviews. Finally, as per their weightage and academic history, candidates are finalised and invited to pursue an MBA.
What are some online courses that students can pursue after an MBA?
After an MBA in Finance, candidates can pursue the following online courses to build a stronger portfolio:
- Chartered Financial Analyst (CFA)
- Certified Financial Planner (CFP)
- Financial Risk Manager (FRM)
- NCFM certifications
Apart from this, candidates can also choose to pursue a PhD in Finance.
What Is The MBA Fee Structure?
The fee structure for an MBA in Finance varies across government and private institutions. Some examples are given below:
Are There Loans Available for MBA Finance?
Since Masters of Business Administration (MBA) is one of the most sought-after degrees in India, several banks offer loans to candidates to pursue this degree. This includes:
- State Bank of India Student Loan Scheme
- ICICI Bank Education Loan
- Allahabad Bank Education Loan
- HDFC Bank Education Loan
These loans are offered at varied interest rates. There are also organisations like Propelld offering 100% digitised private student loans.