Comparing Financial Advisors to Financial Analysts
Financial advisor and financial analyst sound like two very similar occupations, and they do actually share some responsibilities. However, analysts typically spend more time analyzing past trends and complex economic data to determine the best investment opportunities, while advisors focus on the personal circumstances of individual clients to determine which investment services may fit their needs best. Take a look at more information on each of these career options and how they compare.
|Job Title||Education Requirements||Median Salary (2016)*||Job Growth (2014-2024)*|
|Personal Financial Advisor||Bachelor's Degree||$90,530||30%|
|Financial Analyst||Bachelor's Degree||$81,760||12%|
Source: *U.S. Bureau of Labor Statistics
Responsibilities of Financial Advisors vs Financial Analysts
Financial advisors determine where clients' money is going and make suggestions for improving their financial situation after examining a number of factors, such as income and tax status. Though financial analysts also assist clients in improving their financial situation, they factor in more research of financial data and business trends. Financial advisors often times work as personal consultants, where they might concentrate on helping an individual prepare for retirement or save enough money to send their kid to college, whereas financial analysts can also work for businesses seeking to raise capital by buying or selling stocks and bonds. Both of these professionals put clients first and work to maximize the return on their investments.
Financial advisors work with individuals to improve their financial situations by providing advice on which types of investments or insurance options are right for them. Financial advisors need good people skills to generate trust, as they are dealing with clients' financial records and providing recommendations. They also must be able to sell their services to gain a bigger clientele. Financial information can be complex, and advisors must be able to communicate that information effectively for clients to fully understand what is being presented.
Job responsibilities of a financial advisor include:
- Discussing financial goals with clients
- Explaining different financial services available to clients
- Providing education on areas such as tax law and insurance
- Reviewing client accounts and re-evaluating investment strategies as needed
Financial analysts assist businesses and individuals with decisions related to the buying and selling of various investments. They use their analytical skills to assess how the market is doing and determine what types of investments will be the best fit for a business's financial situation. Analysts spend the majority of their time in an office setting looking over data and investment opportunities, though they also are expected to travel to meet with clients and attend meetings. Financial analysts must be self-motivated and have confidence in their ability to make decisions based on the data they study.
Job responsibilities of a financial analyst include:
- Determining a business's value
- Attending meetings with clients to understand a company's financial projections
- Writing financial reports
- Determining risks of investments
Those considering a career as a financial advisor may also be interested in working as an insurance sales agent who educates individuals and sells different types of insurance, similar to how a financial advisor sells their financial services. Budget analysts are an alternative career option for those interested in becoming a financial analyst. Budget analysts use data and other information to help an organization manage its finances just like financial analysts; however, they focus more on tracking spending and preparing budgets for clients.