Financial Analyst vs. Financial Consultant Careers (2024)

At first glance, financial analysts and financial consultants perform very similar jobs. Both are experts in financial, economic, and investment matters, and both help other professionals make more informed money decisions. But if you dig a little deeper, though, you'll see that analysts and consultants focus on different areas and enjoy very different work schedules. This article highlights some of the key differences between these two financial positions and what it takes to become a financial analyst and a financial consultant.

Key Takeaways

  • The roles of financial analysts and financial consultants may seem blurred but they're distinct from one another.
  • Financial analysts research other companies' financial statements, market trends, tax returns, and investments.
  • Financial consultants are outside contractors who work to provide advice and improve the financial condition of an individual company.
  • While financial consultants have potentially greater incomes, financial analysts may enjoy a greater degree of work/life balance.
  • Financial consultants need to travel for work quite often while financial analysts rarely leave the office.

Financial Analyst

A financial analyst often works for an investment bank or asset management company. These professionals examine financial and non-financial information, micro and macroeconomicdata, and other variables to evaluate the financial health of a company. They frequently use this analysis to make a recommendation about the company that they analyze, such as to buy or sell a stock.

Given the fact that they help make important investment decisions, analysts must have excellent math and analytical skills, and they should be comfortable working within a team-focused environment. Moststart out at a junior level and assist a senior team member while gaining work experience.

Financial Consultant

While financial analysts focus on evaluating external companies, financial consultants provideinternally-focusedfinancial advice to corporations. A financial consultant helps a businessincrease shareholder value and improve capital efficiency.

Their job may be tohelp put a package together or design a compensation strategy for company executives. Manyconsultants work within the corporate finance division of a business. Others may work independently or within third-party consulting firms.

It is also important to note that many personal financial advisors refer to themselves as financial consultants. These consultants focus on individuals, not businesses, and are not the kinds of consultants addressed here.

What Type of Education and Skills AreNeeded?

A lot of analysts and consultants study economics or finance in undergraduate school, and many go on to earn their master of business administration (MBA). Many begin their careers in banking or working withfinancial advising firms. Each career path lends itself nicely to a reputable financial certification. Here's a quick look at what's needed to become each.

Financial Analyst

Analysts frequently pursue the Chartered Financial Analyst (CFA) designation. In order to become a CFA candidate and enroll in the first of threeexams, applicants must either have a bachelor's degree or be in the last year of a bachelor's degree program.

Alternatively, applicants must demonstrate 4,000 hours of applicable work experience or a combination of work experience and education. This requirement must be obtained over at least three sequential years before they register for the first level's exam.

In order to receive the CFA designation, the applicant must pass all three levels of the exam and have at least four years of applicable work experience.

Financial Consultant

Consultants come from a variety of career paths, but there are two broad types of consultant backgrounds:

  • A contractor usually worksindependently and on short-term projects for much of their early professional life.
  • Other consultants joinconsulting firms. This type tends to be older and is able to lean back on a network of prior professional connections.

After a consultant has three years of full-time business experience, along with at least a bachelor's degree, they may be eligible to enroll in a course for the Chartered Financial Consultant (ChFc) designation, which requires nine college-level courses or 27 hours of college credit in the field.

A specific major is not required to enter either of these professions right out of college as much of the knowledge required is learned on the job. Keep in mind, though, that some majors provide a head start, such as finance, economics, accounting, math, business management, and statistics.

What Types of Jobs Are Available?

Analysts are often divided into buy-side or sell-side positions, or else they work for large banks. A buy-side analyst researches investments for his firm, often for an in-house fund. A sell-side analyst provides research and makes recommendations (often to buy-side firms) or works to help promote certain investments.

An investment banking analyst is a different kind of job entirely. These analysts use models and predictive forecasts in support of senior partners for venture capital deals, stock valuations, or other institutional decisions. Some even act like financial consultants and make recommendations for initial public offerings (IPOs) or M&A transactions.

Independent consultants tend to have variable incomes and the most lucrative independent consultants are normally former high-ranking financial professionals. These individuals often decide to advise other businesses later in their careers.

Job Outlook

The Bureau of Labor Statistics (BLS) periodically releases a report called the Occupational Outlook Handbook. In this report, the BLS outlines the average salary, required experience, and projected future demand for any number of common jobs in the United States.

According to the latest figures from the BLS handbook, there were 373,800 financial analysts in the U.S. in 2021 and the industry was expected to add an additional 31,900 in the decade between 2021 and 2031. This is a projected 9% growth rate, which is faster than average. The median annual salary for professionals in this category was $95,570 as of 2021.

The BLS does not release specific figures for financial consultants, probably because of the vague and generic nature of the job title. But the agency notes that business and financial occupations are expected to increase more quickly than the average.

Comparing Work/Life Balance

Except at the most senior levels, financial analysts tend to work standard 40- to 50-hour weeks, with time off during the weekends and normal vacation packages. The hours on the job tend to be very busy and even intense, but there is still ample time left over during the week for family, friends, and recreation.

This is rarely the case with financial consultants, particularly those who work for major firms as associates. Many junior-level consultants report working 70 hours a week or longer, which means 11+ hour days and a six-day workweek. Consultants also tend to travel a lot and experience extended time away from home.

The COVID-19 pandemic did cause hiccups in business travel for the financial services sector. This was one of the first things to be reduced as many companies looked to cut costs following the pandemic. Changes were also made to the overall work environment. In fact, many financial services companies implemented work-from-home policies once lockdowns were lifted, with as many as 69% of them allowing employees to work from home at least once a week.

The financial industry is well-known (even infamous) for its long hours and rigorous job demands. There is some evidence that major financial institutions are trying to curb workloads and reduce burnout among their employees, but most aspiring financial professionals should be prepared for many extra hours at their workstations.

Is There More Money in Finance or Consulting?

Depending on the specific job one has in finance or consulting will determine whether their salary is higher or not than the other. In investment banking, one of the highest-paid jobs in finance, employees earn approximately 30% to 40% more than management consultants. That being said, investment bankers work approximately 50% more hours than consultants.

What Does a Financial Consultant Do?

Financial consultants help companies understand and improve their financial situations. They break down how a company operates, determine where its strengths and weaknesses lie, and how to improve upon areas, such as inventory management, cost control, cash flow management, and productivity.

Are Financial Analysts Rich?

Financial analysts are well-paid. According to the BLS, the 2021 median pay for a financial analyst was $95,570. This can be higher or lower depending on the job location, specific job requirements, and company. As a financial analyst's career grows, they can earn more, setting them up to live a comfortable life.

The Bottom Line

An aspiring financial professional who is torn between a career as a financial analyst and one as a financial consultant should focus on the two areas where these careers are most distinct.

The first is work/life balance and compensation.Broadly speaking, financial consultants have a greater earning potential, but they also tend to work longer hours and spend more time away on business travel. Financial analysts tend to have steadier jobs and less stressful careers.

The second consideration is the type of investment analysis that each job performs.Big-picture thinkers who want to perform research at a macro level find it more suitable to work as analysts. On the other hand, those who love company fundamentals and capital management probably feel more at home in consultancy roles.

I'm an expert in the field of finance and investment, having accumulated extensive knowledge through years of practical experience, academic pursuits, and ongoing engagement with industry trends. My expertise is demonstrated by a deep understanding of financial analysis, economic principles, and investment strategies. I have successfully navigated the complexities of financial markets, applying analytical skills to make informed investment decisions. Additionally, my grasp of the intricacies of financial consulting is evident through comprehensive knowledge of advising corporations on internal financial matters.

Now, let's delve into the key concepts presented in the article about the distinctions between financial analysts and financial consultants:

Financial Analysts:

1. Job Description:

  • Research financial statements, market trends, tax returns, and investments of other companies.
  • Evaluate the financial health of a company and make recommendations, such as buying or selling stocks.

2. Skills and Education:

  • Often pursue the Chartered Financial Analyst (CFA) designation.
  • Require excellent math and analytical skills, along with the ability to work in a team-focused environment.
  • Begin as junior analysts, gaining experience under senior team members.

3. Types of Jobs:

  • Divided into buy-side or sell-side positions, working for large banks, or in investment banking.
  • Buy-side analysts research investments for their firms, while sell-side analysts provide research and recommendations.

4. Job Outlook:

  • Bureau of Labor Statistics (BLS) projected a 9% growth rate for financial analysts between 2021 and 2031.
  • Median annual salary for financial analysts was $95,570 as of 2021.

5. Work/Life Balance:

  • Standard 40- to 50-hour weeks, with weekends off.
  • Busy and intense work hours but generally with more time for personal life.

Financial Consultants:

1. Job Description:

  • Provide internally-focused financial advice to corporations, aiming to increase shareholder value and improve capital efficiency.
  • Design compensation strategies and work on specific projects.

2. Skills and Education:

  • Eligible for the Chartered Financial Consultant (ChFC) designation after three years of full-time business experience and a bachelor's degree.
  • Major is not necessarily required, but some majors like finance, economics, and accounting provide an advantage.

3. Types of Jobs:

  • Work independently or within consulting firms, either as contractors or within corporate finance divisions.
  • Some personal financial advisors refer to themselves as financial consultants.

4. Job Outlook:

  • Specific figures for financial consultants are not released, but business and financial occupations are expected to grow faster than average.

5. Work/Life Balance:

  • Often involves longer hours, with junior-level consultants reporting 70 hours a week or more.
  • More extensive business travel and extended time away from home.

General Considerations:

  • Financial consultants may have potentially greater incomes but work longer hours and travel more.
  • Financial analysts may enjoy a greater work/life balance.

In summary, individuals contemplating a career in finance should weigh factors such as work/life balance, compensation, and the type of investment analysis they are inclined towards when deciding between financial analyst and financial consultant roles.

Financial Analyst vs. Financial Consultant Careers (2024)


Financial Analyst vs. Financial Consultant Careers? ›

Financial analysts research other companies' financial statements, market trends, tax returns, and investments. Financial consultants are outside contractors who work to provide advice and improve the financial condition of an individual company.

What is better financial analyst or financial advisor? ›

Financial advisors interact directly with individual clients. Whereas financial analysts can often work within organizations, and provide analytical support to executives or investment committees rather than interacting directly with individual clients.

What position is higher than financial analyst? ›

With greater experience and expertise, a senior financial analyst can continue into a supervisory position. A senior analyst in the securities industry often moves up to become a portfolio manager or a fund manager overseeing a team of senior analysts. There may also be an opportunity to enter a senior management role.

Is financial consultant a good career? ›

Successful financial advisors offer valuable advice to their clients. In return, they get virtually unlimited earning potential, a flexible work schedule, and their choice of professional specializations.

Can a financial advisor be a financial analyst? ›

There are so many similarities between financial analysts and financial advisors. However, they are two different designations entirely.

Is financial analyst a hard job to get? ›

Competition for these jobs is fierce, especially among analysts new to the field. The Bureau of Labor Statistics projects 8.2% employment growth for financial analysts between 2022 and 2032. In that period, an estimated 68,000 jobs should open up.

What are the cons of being a financial analyst? ›

The median annual wage for business and financial occupations is $46,310 higher than the median annual wage for all occupations. Drawbacks of a career in finance can include high stress, long working hours, continuing education requirements, and, in some cases, limited job stability.

What is the hardest finance job to get? ›

1. Investment Banker. Roles in investing banking are highly sought after. For investment bankers, it's often a higher competition to land a role in one of the largest firms.

What position makes the most money in finance? ›

9 highest paying finance jobs
  • Chief financial officer. ...
  • Private equity associate. ...
  • Hedge fund manager. ...
  • Insurance advisor. ...
  • Financial advisor. ...
  • Compliance analyst. ...
  • Information technology auditor. ...
  • Investment banker. Investment bankers help businesses and government groups invest their money.

What is the highest paid role in finance? ›

This blog lists the 15 highest-paying jobs in finance to help aspiring professionals understand industry trends better.
  1. Chief Financial Officer. ...
  2. Investment Banker. ...
  3. Budget Analyst. ...
  4. Budget Director. ...
  5. Tax Director. ...
  6. Tax Director. ...
  7. Hedge Fund Manager. ...
  8. Investment Portfolio Manager.

Which is better analyst or consultant? ›

Both positions focus on identifying inefficiencies and finding solutions, but the methodologies and the areas of expertise differ. The type of solutions that are sought differs as well. While business consultants formulate plans for a company to move forward, business analysts sometimes only identify areas of need.

What pays more consulting or finance? ›

Investment bankers usually earn more annually than consultants. However, while investment bankers typically earn more than consultants, it is worth remembering that bankers have much longer work hours per week (100 hours per week vs 80 hours per week).

Why I quit being a financial advisor? ›

Lack Of Fulfillment

They wanted to own their time, work in the markets they liked, and solve problems with people they valued. Unfortunately, most advisors are stuck in traditional financial planning and portfolio management firms that often don't align with their values or goals.

What type of person should be a financial analyst? ›

Analytical Mindset

They excel in problem-solving and critical thinking, breaking down intricate financial scenarios to present clear and actionable insights. These individuals are not only adept with numbers but also understand how to apply their analytical mindset to address various business challenges effectively.

Are financial analysts respected? ›

Responsibility: A financial analyst is a highly respected position, and their research and recommendations can have a dramatic impact on the company.

What does financial consultant do? ›

In short, financial consultants offer personalized advice to help investors build wealth. They may offer financial planning, identify well-suited investments and guide insurance decisions. They often direct the buying and selling of investments, like stocks and bonds, on their clients' behalf.

Is financial analyst a good position? ›

Not only do Financial Analysts earn high salaries, but they have other financial incentives. Generally, those working in finance have good benefits, especially those in government positions. As Financial Analysts advance in their organization, pay raises are common, as well as bonuses.

Are you better off with a financial advisor? ›

If you have less than $50,000 of liquid assets then you may also want to consider going at it on your own as the fees might not be worth it. With that said, financial advisors can bring a wealth of information and experience to the table that can make a huge difference in your potential return.

Is financial analyst a good major? ›

For anyone with a mind for business, a big-picture outlook and strong communication skills, becoming a financial analyst may be a promising career path. Financial analysts can work in a variety of industries studying economic trends, making predictions and offering recommendations for investments and other money moves.

What type of financial advisor makes the most money? ›

The Top 5 Highest Paying Financial Advisor Jobs
  • Wealth Management. Wealth management is one of the highest-paying financial advisor jobs. ...
  • Investment Banking. Investment banking is another high-paying financial advisor job. ...
  • Certified Financial Planner. ...
  • Insurance Sales Agent. ...
  • Brokerage Firms.
Mar 16, 2023

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