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Are you considering a career as a financial analyst but aren't sure which role is right for you? Continue reading to learn about the 13 types of financial analysts in the industry. 

Companies in virtually every major industry require some form of financial guidance, making financial analysts highly sought after. In 2023 alone, more than were employed throughout the country.

What makes them indispensable in business is their ability to evaluate investment opportunities, identify trends, and help businesses manage their finances. However, the job description of a financial analyst is long and diverse, which has made the role of financial analyst diverge in various fields. 

So, what are the different types of financial analysts?

 

Look no further! In this blog, we'll explore the diverse and exciting types of financial analysts, and establish what a career in financial analysis can look like. 

Types of Financial Analysts

Let's explore what you can do as a financial analyst, exploring different career paths within this profession. We are going to rank them from lowest to highest paying positions within the financial analysis career. 

1. Financial planning and analysis (FP&A) analyst

Average Salary:

Financial planning and analysis (FP&A) analysts are professionals who analyze financial data, prepare forecasts, and support strategic decision-making. They use qualitative and quantitative analysis of an organization's operations to assess its progress toward financial goals.

In their line of duty, FP&A analysts must possess budgeting, financial modeling, forecasting, attention to detail, and effective communication skills. They must also have strong knowledge of accounting principles, spreadsheet tools, and financial software.

The FP&A career path hierarchy includes the following:

• FP&A analyst;

• Senior FP&A analyst;

• FP&A manager;

• Director or vice president of FP&A.

2. Risk analyst

Average Salary:

Risk analysts are financial professionals who examine the risks associated with investments, economic conditions, new clients, or regulations to support financial decisions. They also gather economic data from industry sectors and companies, review and analyze financial reports, and conduct risk analysis. 

To complete these tasks effectively, risk analysts must possess financial knowledge, attention to detail, familiarity with technology, problem-solving, and communication. 

After gaining experience, risk analysts can move to roles such as risk manager, senior risk manager, and chief risk officer (CRO).

3. Treasury analyst

Average Salary:

Treasury analysts typically work for companies or government agencies. They oversee and manage the use of an organization's finances, such as credit and cash flow, liability and asset levels, and investment income. Other duties treasure analysts perform include:

• Developing investment strategies, 

• Presenting findings to investment strategies,

• Creating reports about specific types of finances. 

To excel in this position, treasure analysts must possess cash management, treasury operations, cash flow, and financial analysis skills. 

After gaining experience, treasury analysts can advance to roles like senior treasury analyst or treasury manager or even to roles as treasurer or finance director.

4. Budget analyst

Average Salary:

Budget analysts help public and private organizations plan their finances. They prepare budget reports, monitor organizational spending, and estimate future financial needs.

To be successful in the job, budget analysts must be detail-oriented, communicate effectively, and have strong analytical and mathematical skills. 

With lots of dedication and zest, budget analysts can move up the career ladder and take on positions such as budget manager, senior financial analyst, and financial director.

5. Portfolio manager

Average Salary:

Portfolio managers are responsible for managing clients' investment portfolios and making calculated decisions to balance risk and maximize returns. Their duties also include analyzing market developments and trends, identifying client investment goals, and collaborating with other financial analysts to identify investment opportunities. 

As the role requires individuals to take calculated risks for their clients’ money, one must possess strong analytical, communication, and risk management skills. 

In general, a senior portfolio management position is usually the highest position of the career path. However, portfolio managers can move into leadership positions in their firms. 

6. Credit analyst

Average Salary:

Credit analysts are financial professionals responsible for assessing the creditworthiness of securities, individuals, or companies. They determine the likelihood that a borrower can repay their financial obligations.

In their line of work, credit analysts must be able to work under pressure, be proficient in financial software, demonstrate great attention to detail, and possess quantitative and analytical skills to review financial data and make risk-level judgments.

This career path offers two options:

1. Stay in credit and keep analyzing new issuances and monitoring the portfolio, later advancing up the ladder to become a portfolio manager;

2. Move to the sales side and become a loan officer or relationship manager.

7. Corporate development analyst

Average Salary:

Corporate development analysts are responsible for increasing revenue and optimizing business processes. They also assess finances and operations, improve business strategies, and develop recommendations for expanding reach into new customer segments.

Individuals who pursue this career must possess analytical and research skills, financial modeling, excellent written and verbal communication, and organizational skills.

To move up in the ranks, corporate development analysts can take positions such as:

1. Corporate development associate

2. Corporate development manager

3. Director of corporate development

4. Head of corporate development

8. Ratings analyst

Average Salary:

Ratings analysts typically work in insurance or lending and are responsible for assessing the credit rating of governments or organizations. They evaluate credit risk by looking at revenue, liabilities, assets, and debt repayment history. 

In their line of work, ratings analysts must possess time management, attention to detail, organization, financial modeling, and communication skills. 

After gaining experience, rating analysts can move into managerial or executive roles.

9. Equity research analyst

Average Salary:

Equity research analysts work for both buy-side and sell-side firms in the securities industry. They're responsible for creating research reports, recommendations, and projections about stocks and companies. Other duties include overseeing client investment portfolios, meeting with managers to outline their recommendations, and deciding what securities to hold.

To perform these tasks, equity research analysts must possess financial modeling knowledge, excellent pattern recognition, detail orientation, and organization skills. 

Most equity research analysts begin their careers in entry-level research associate positions. After gaining experience and exemplifying excellent performance, they can move into analyst positions. From there, they can transition into a role as a head of research, overseeing other equity research analysts in the firm. 

10. M&A analyst

Average Salary:

Mergers and acquisitions (M&A) analysts are responsible for overseeing the execution of transactions for the purchase, sale, merger, or takeover of companies. They also negotiate and complete the deal on the client's behalf by working closely with accountants and lawyers.

Being a successful M&A analyst requires a combination of basic knowledge of corporate law, financial modeling, global business knowledge, communication skills, and teamwork.

The M&A career path and hierarchy involves:

1. M&A analyst

2. M&A associate

3. Senior M&A professional.

11. Investment banking analyst

Average Salary:

Investment banking analysts are the first chain of investment bankers' careers. They help companies develop or maintain effective investments and meet their financial goals. They also complete detailed valuation analyses, create financial models, assist the senior team with customer coverage initiatives, and more.

To be successful on the job, these professionals need a combination of soft skills such as communication, active listening, research, and organization, technical abilities such as spreadsheet software, mathematics, and statistics, and strong industry knowledge. 

This career path has a well-defined corporate hierarchy, advancing in role like:

1. Investment banking associate;

2. Vice president, senior vice president, and director;

3. Managing director, Chief Financial Officer (CFO), and Chief Executive Officer (CEO). 

12. Financial quantitative analyst

Average Salary:

Financial quantitative analysts use statistical analysis and mathematics to assess and oversee financial instruments and financial markets. They create and apply statistical and mathematical models to assist organizations in making decisions, assessing market volatility, and analyzing profitable prospects. 

Some of the skills all successful quantitative analysts possess include statistics, mathematical skills, data analysis, creative thinking, organization, and problem-solving.

In general, financial quantitative analysts working in investment banking follow a similar promotion structure to most investment bankers: they start as analysts and work their way up the ladder to management positions. 

13. Hedge fund manager

Average Salary:

Hedge fund managers are financial professionals responsible for their clients' financial and investment strategies. Their duties include analyzing profitable investment options, raising and managing investment capital, and monitoring investment performance. Additionally, they select high-risk investments in accordance with the fund's mandate for high profitability.

To complete these tasks, hedge fund managers must have in their arsenal strong risk management skills, market knowledge, quantitative expertise, and communication skills. 

This position is typically the top position, except when working at a multi-manager fund with a management layer above it. 

Which Financial Analyst Role is Right for You?

As you can see, becoming a financial analyst offers many high-paying roles with excellent career advancement opportunities.

But which financial analyst role is right for you? To determine this, consider factors like:

• Interests: Reflect on which type of financial analysis interests you and whether you want to work on credit analysis, corporate development, or equity research.

• Skills: List your strengths and determine which role best aligns with them. For example, if you have a knack for pattern recognition, becoming an equity research analyst may suit you better.

• Career goals: Think about your long-term goals. If you want to eventually work as a C-suite executive, consider starting as an investment banking analyst. On the other hand, if you want to move into senior analyst roles, consider becoming an FP&A analyst or treasury analyst. 

Conclusion 

Each financial analyst type offers unique opportunities, whether it's in equity research, investment banking, or credit analysis. That's why we advise you to explore these areas and find the career path that best aligns with your goals, skills, and interests.

However, understanding the different types of financial analysts is the first step to a financial career. Next, you must obtain financial analysis certificates and earn a bachelor's degree in business administration with a concentration in finance to prove your knowledge and skills. If you have a thirst to move higher up the ranks, you can also pursue a master’s in financial analysis.

So, what are you waiting for? Get started today and!

FAQ:

Which type of financial analyst earns the most?

Although all types of financial analysts have a high earning potential, the highest-paid financial analysts are hedge fund managers with a salary of $132,741.

Which financial analyst role offers the best career growth opportunities?

 

In general, all financial analyst roles offer career growth opportunities. However, becoming an investment banking analyst, corporate development analyst, and risk analyst can set you on the path to a C-executive or management role.