Financial Analysis and Planning
Median annual earnings of financial analysts were $61,910 in May 2004. The middle 50 percent earned between $47,410 and $82,730. The lowest 10 percent earned less than $37,580, and the highest 10 percent earned more than $113,490. Median annual earnings of personal financial advisors were $62,700 in May 2004. The middle 50 percent earned between $41,860 and $108,280. Many financial analysts receive a bonus in addition to their salary, and the bonus can add substantially to their earnings. Usually, the bonus is based on how well their predictions compare to the actual performance of a benchmark investment. Personal financial advisors who work for financial services firms are generally paid a salary plus bonus. Advisors who work for financial investment or planning firms or who are self-employed either charge hourly fees for their services or charge one set fee for a comprehensive plan, based on its complexity. Advisors who manage a client's assets may charge a percentage of those assets. Advisors generally receive commissions for financial products they sell, in addition to charging a fee.
Facts at a glance
- A college degree and good interpersonal skills are among the most important qualifications for these workers.
Although both occupations will benefit from an increase in investing by individuals, personal financial advisors will benefit more.
- Financial analysts and personal financial advisors who have earned a professional designation are expected to have the best opportunities; competition is anticipated to be keen for highly lucrative positions in investment banking.
- About 4 out of 10 personal financial advisors are self-employed.
Summary of what this career entails
The financial advisor field is a bit diverse, because an advisor can either work for a company or they can work for an individual. A financial analyst usually works for a company and he or she researches trends in the financial industry and then determines how said trends affect the company he or she is working for. The kinds of organizations a financial advisor would work for include banks, insurance companies, and mutual and pension funds. An advisor uses spreadsheets and software packages to find the data needed to help the companies they work for make important financial decisions.