It's a high-stress, high paying job as you analyze companies and give investment projections
This story is part of the Globe Careers’ series looking at specific jobs, with their qualifications, descriptions, responsibilities and current salaries. For more, see our Salaries Series.
Job: Financial analyst
Base salary starting at about $60,000 to $100,000 for the first few years, and it can increase to nearly $1-million, based on responsibilities and experience. That doesn’t include performance-based bonuses, which often depend on the success of the analyst, and the health of the markets.
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A university degree is the absolute minimum, but most analysts have an MBA or a Chartered Financial Analyst (CFA) designation. It’s "rare" to find someone coming into the industry who doesn't already have the CFA designation or isn't currently in the CFA program, says Peter Jarvis, CFA and chief executive of the CFA Society of Toronto.
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Getting into the CFA program isn’t difficult, says Mr. Jarvis, but passing it is. He says only about one in five students who enter the program pass the full series of exams. Last year, only 37 per cent of the 48,981 candidates that took the final set of CFA exams passed, according to the New York-based CFA Institute.
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Performing an in-depth analysis of public companies based on a number of financial metrics. Financial analysts look for a company’s value and make recommendations to potential or existing shareholders, including whether it’s a good or bad investment now, and in future.
By the numbers:
Canadian professionals holding the CFA designation earned an average of $239,215 and saw their total compensation rise by 11 per cent in 2011, says a survey by CFA Societies Canada. The top quarter of earners’ income started at $260,000, rising to more than $3.5-million. The survey showed 49 per cent of compensation was in base salary and 25 per cent was performance bonuses.
When markets are good, there are more jobs for financial analysts, when they’re bad, there are fewer. It’s also a competitive job market, and landing a position isn’t easy, says Mr. Jarvis.
Service Canada describes the job market as “fair” for financial and investment analysts. “Over the past few years, the number of financial and investment analysts has risen sharply,” the government states, citing an increased number of financial vehicles and information sources. “These factors indicate these positive trends will continue over the next few years.”
(Matthew Sherwood For The Globe and Mail)
Stress and long hours. There’s a lot of money at stake and it takes years to become an expert, and even then the market can make a fool of you if you make a bad call on a company.
“It can be a remunerative industry, but psychologically it can test your mettle,” says Mr. Jarvis. “If you’re looking for work-life balance, go elsewhere for a career.”
Why they do it:
It’s not just about the money. Crunching numbers, analyzing industries and making decisions to help investors is both interesting and exciting work, says Mr. Jarvis. “Many love it and stay in the business for a long time.”
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“The single biggest misconception is that the position you take as an analyst … is the same as the company’s position,” said Mr. Jarvis. He said financial analysts are trained to make calls that even their employer may not agree with.
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Give us the real scoop:
Are you a financial analyst in Canada?
Write a note in the comments area or e-mail your comment to email@example.com and tell us what you would tell others who are interested in the profession.
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