In the modern finance team, the Financial Analyst position plays a vital role in helping organisations understand their financial health and provide management with a comprehensive understanding of their financial results. They are the financial detectives who really get under the bonnet, analyse data, identify trends, and provide invaluable insights that can help guide a company's financial decisions. In this blog, we will explore the role of a Financial Analyst, why a company needs one, the key skills required, how to assess those skills and the potential career path in this field.
Simply put, the key objective of a Financial Analyst is to pull apart the financial results and provide insights around P&L movements and actual vs. budget. They help provide the 'why' behind the numbers. Financial Analysts are responsible for examining financial data, preparing reports, and making recommendations based on their findings.
Financial Analyst job role and responsibilities include:
If you are interested in finding out more about a typical Financial Analyst job summary, click here.
The importance of hiring a Financial Analyst cannot be overstated. Essentially, you can’t plan for where you are going when you don’t understand where you have come from.
Compelling reasons why a company needs a Financial Analyst:
Data-driven decision-making: Financial Analysts provide data-driven insights that guide critical decisions, helping businesses maximise profits and minimise risks. This is especially useful if there have been significant and unexpected variations to the budget.
Risk management: Identifying and mitigating financial risks is essential for business sustainability, and Financial Analysts are experts in this area.
Investment optimisation: With their expertise in investment analysis, Financial Analysts ensure that a company's funds are invested wisely for long-term growth.
To excel in this position, here are the key Financial Analyst skills and qualifications to consider when hiring a Financial Analyst:
Analytical: Strong analytical abilities are essential for interpreting financial data and making informed decisions.
Financial modelling: Proficiency in creating financial models to forecast future financial scenarios. Not always essential, but a really useful tool to have in large, complex businesses.
Attention to detail: The ability to spot discrepancies and errors in financial reports is crucial.
Communication: Effective communication is vital for presenting complex financial information to non-financial stakeholders.
Problem-solving: Financial Analysts must be adept at identifying issues and developing solutions.
Technical proficiency: Financial software and Excel are a must.
Industry knowledge: Understanding the specific industry in which the company operates can be an advantage.
If you are interested in more information about the Financial Analyst profile and how to develop it, click here to read our blog.
Assessing skills in candidates can be done through a combination of interviews, case studies, and assessments. Ask candidates to analyse a sample of financial data, create financial models, and explain their decision-making processes during interviews. Reference checks and certification verification can also add that extra layer of thoroughness.
In Sydney, a Financial Analyst's salary can vary based on factors like experience, qualifications, and the industry. On average, a Financial Analyst can expect to earn anywhere from $100k through to $130k + super per year. Highly experienced analysts with strong modelling backgrounds (in particular within the property, and investment banking space) can command up to $180k + super.
A career in financial analysis offers numerous opportunities for growth and advancement. Here's a typical career path for a Financial Analyst:
Financial Analyst: Entry-level position where analysts learn the ropes and gain experience.
Senior Financial Analyst: With experience, analysts can advance to a senior role, taking on more complex responsibilities and supervising junior analysts.
Finance Manager or Financial Controller: Though not a typical career path, some analysts progress to financial managerial positions, overseeing financial operations for an entire department or organisation.
Additionally, you can pursue certifications like the notoriously challenging Chartered Financial Analyst (CFA) designation that can open doors to higher-paying and more prestigious roles, especially in investment and property companies.
Analysts can also specialise in areas such as risk management, investment banking, or corporate finance, further diversifying their career options.
In summary, Financial Analysts are indispensable assets for businesses seeking financial stability and growth. They possess a unique skill set that allows them to analyse financial data, provide strategic insights, and guide companies toward sound financial decisions. By understanding the role, skills, and career path of a Financial Analyst, businesses can make informed decisions when hiring for this critical position.