Career advice: financial analyst vs data analyst
Financial analyst vs data analyst: an overview
If you’re a student or young professional with a knack for numbers, analysis, and a problem-solving expert, consider a career as a financial or data analyst. Financial analysts use financial data to spot trends and extrapolate into the future, helping their employers and clients make the best investment decisions. Companies rely on financial analysts to determine the best time to buy or sell specific securities, and in some cases, companies use reports produced by financial analysts to determine whether the entire company should be sold.
Data analysts play a similar role, the main distinction being that these professionals analyze data that may or may not be related to investment decisions. For example, a data analyst might study numbers related to sales figures, advertising effectiveness, transportation costs, or wages versus productivity.
Ultimately, any digital data that can be used to make a business decision is potentially the job of a data analyst. While not as focused on financial markets as their counterparts in the financial analyst world, data analysts still need to keep up-to-date knowledge of investment practices. Often, accessing and organizing the data needed in this role requires high-level IT skills, which makes an IT background, or at least a working domain knowledge, a definite asset for a data analyst. budding.
Since the education and skills required, income potential, work / life balance and the competitiveness of the labor market are similar between the two fields, subtle differences in personality type and overall skills determine whether someone is better suited for a career as a financial analyst or data analyst.
Financial analysts tend to take a broad perspective when undertaking their work. They review financial decisions based on current market trends, stated business goals, and possible investment options of companies, while reviewing economic data and financial forecasts.
A degree in finance is probably most beneficial for aspiring financial analysts, although math or economics may also suffice. A master of business administration (MBA) can help a financial analyst, but it is not always necessary. Financial analysts can also opt for the highly selective designation of Chartered Financial Analyst (CFA). Unlike the CPA, which focuses on a professional understanding of public accounting standards in the United States, the CFA focuses on those who actively make investment decisions on behalf of clients or an employer. This test is in 3 parts and administered and supervised by the CFA Institute.
Many financial analysts are also CPAs, and many accountants hold the CFA designation. Having both titles is considered a major advantage for almost any career in the business world and requires a significant mastery of business accounting and investment knowledge.
Financial analysts earned a median annual salary of $ 84,300 in 2017, the most recent figures being in February 2019. The top earners brought in nearly $ 115,000 and the bottom rung around $ 64,000, according to the Bureau of Labor Statistics . Financial analysts tend to earn the most in large financial centers, such as New York or San Francisco. Bridgeport, Connecticut is also a lucrative destination for analysts. Increased regulations and market complexity are driving the growth of financial analysts, especially among large companies with many assets to manage.
Data analysts have a narrower focus. They collect data and examine it to spot trends and glean information that can be used to make business decisions. In the information age, businesses are relying more than ever on big data to make decisions such as which customers to target, which products and services to focus on, which advertising methods to use, how many who to hire and for what positions, and new markets for expansion. For virtually every business decision, data is available to steer the business in the right direction. The role of the data analyst is to source this data and draw conclusions that the business can use to make decisions.
Data analysts are in demand everywhere. This is not an industry specific role. Any business savvy enough to understand the importance of data analytics needs skilled data analysts. While data analysts earn above-average salaries, the returns on investment (ROI) for the companies that employ them are even more impressive. The trends spotted and the insights gleaned by data analysts often net their employers millions of dollars a year.
Students and young professionals who are quantitative, logical, computer savvy, good communicators, and who want to earn above-average income while working reasonable hours, should consider data analytics as a career choice. Industry analysts have named it one of the hottest career choices for the 2010s, with projections indicating that the demand for data analysts is expected to grow rapidly as more and more companies understand the importance of harnessing big data.
The median annual salary for a data analyst is $ 54,070 in 2013. The median range, the 25th to 75th percentile, is approximately $ 45,000 to $ 66,000. The fact that such a variety of companies in a variety of industries employ data analysts contributes to the salary mix. The candidate’s company size, industry, geographic location, education, experience, and other factors combine to determine a data analyst’s first-year salary.
Neither career has general and strict educational requirements. This means that there are no exams to take, such as the bar exam or medical boards, before you can even legally practice the profession. Individual employers set their own requirements for new hires. Generally, the more competitive the job market for financial and data analysts in your region, the higher the standards.
In either profession, most new hires have earned at least a bachelor’s degree, with a master’s degree becoming more and more standard with each passing year. The best academic specializations for a financial analyst are economics, finance, and statistics. Most large companies that hire financial analysts look for one of these three, and as an added bonus, these majors look great when applying to an MBA program, especially when combined with a GPA and competitive work experience.
For aspiring data analysts, a degree in statistics is a great place to start; even better, double your major and add Information Technology, Computer Information Systems, or another advanced technology major offered by your school. When hiring a data analyst, employers want to see a healthy mix of quantitative sense and computer literacy that goes beyond knowing how to enter numbers into Excel. A bachelor’s degree is not an official, but a de facto, requirement for data analysts, and a master’s degree makes you much more competitive in the job market.
Financial analysts and data analysts must be excellent problem solvers, be good at using logic, and have strong quantitative analysis skills. In addition, seasoned financial analysts have a deep understanding of various financial markets and investment products. For data analysts, keeping computer skills up to date and having at least a cursory understanding of some of the more common programming languages helps.
Strong relationship skills, leadership ability and teamwork are beneficial for either career. Many financial and data analyzes are performed as a team, and analysts must report their findings to different parts of the business in a clear, concise, and compelling manner.
The United States Bureau of Labor Statistics (BLS) reports an optimistic outlook for financial analyst jobs between 2016 and 2026, with job growth projected at 11%. However, the BLS cautions, “Despite job growth, competition is expected for financial analyst positions. profession. Having certifications and a graduate degree can dramatically improve a candidate’s outlook. ”
The BLS did not disclose the data analyst position in its latest forecast, but the broader “financial specialist” job market is expected to grow 10% between 2016 and 2026, which is faster than the previous forecast. 7% growth expected in all occupations in the United States. In the near future at least, there is expected to be a great demand for quantity-inclined professionals who can extract relevant information from large pools of data and use it to draw conclusions and make predictions.
Which one to choose
These are two great careers: the income potential is great, the working hours, on average 40 to 45 hours per week, are not oppressive and the labor market is ready for growth. The distinctions between the two jobs are mostly nebulous, but the biggest difference is that the day-to-day tasks of a financial analyst are much more involved in the investment markets.
If you have a keen interest in investing and following Wall Street, but want to avoid the powder keg environment of investment banking and commerce, financial analysis is a career worth considering. If, on the other hand, you enjoy working with numbers but also love computers and technology, you probably have the skills and interests to become a successful data analyst.