Financial Manager vs. Financial Analyst: What Are the Differences?

A career in finance can offer many opportunities for those with the drive to succeed. Two common positions in this field are financial manager and financial analyst. Both roles are important in helping businesses make sound financial decisions, but they have different responsibilities. In this article, we compare and contrast the job duties of financial managers and financial analysts, and we provide information on the skills and education needed for each position.

What is a Financial Manager?

Financial Managers are responsible for the financial health of their organization. They produce financial reports, direct investment activities, and develop strategies and plans for the long-term financial goals of their company. Financial Managers work in a variety of industries, including banking, insurance, accounting, and investment. They typically have a bachelor’s degree in finance, accounting, economics, or business. Financial Managers must be able to analyze financial data and make sound decisions in the best interest of their organization.

What is a Financial Analyst?

Financial Analysts provide insights into investments and help companies make sound financial decisions. They conduct research on stocks, bonds, commodities and other investments, then present their findings and recommendations to company executives, shareholders or clients. Financial Analysts typically specialize in a particular industry or sector, such as healthcare or energy. They use their in-depth knowledge of the industry to identify trends and make predictions about future performance. Financial Analysts typically have a bachelor’s degree in business, economics or finance.

Financial Manager vs. Financial Analyst

Here are the main differences between a financial manager and a financial analyst.

Job Duties

Financial managers have a higher level of responsibility than financial analysts. Financial analysts use data to create reports and assist executives, but financial managers make decisions based on those reports and executive requests. For example, if an executive asks a financial manager to determine the best course of action for the company regarding a particular investment opportunity, the financial manager will research the available information about that opportunity and make a recommendation.

The duties of each role also differ in terms of the type of work they do. Financial analysts typically perform administrative tasks, such as data entry and document preparation. They also conduct research to support the work of financial managers. In contrast, financial managers are more likely to oversee projects, meet with other departments within their companies and communicate with outside stakeholders, such as investors.

Job Requirements

To become a financial manager, you need at least a bachelor’s degree in business administration, accounting, finance or another related field. For consideration in more advanced positions, it may help to pursue a master’s degree, but it is not a prerequisite for the job. In addition to college, both professions may continue education through additional certifications. A CPA license, which teaches accountants how to file taxes, is accredited through the American Institute of Certified Public Accountants and offered as a national exam. A CFA license allows financial analysts to advise clients through decision-making in investment opportunities. Certifications are not mandatory in either position but allow for more growth opportunities and can be an outlet for gaining more experience in the financial field through extensive training hours.

Work Environment

Financial managers typically work in an office setting, but they may also travel to meet with clients and attend conferences. They often have a more formal dress code than financial analysts because of their role as leaders within the company. Financial analysts usually work in an office environment, but they may also visit clients or attend conferences. Their dress code is usually more casual than that of financial managers.

Skills

Both financial managers and financial analysts use financial skills to perform their jobs. Financial managers use these skills to oversee the financial operations of a company, while financial analysts use them to provide insights and recommendations about financial decisions.

Both roles require excellent analytical skills to be able to understand complex financial data and make sound decisions. They also both need to have strong math skills to be able to calculate financial ratios, forecast future performance and develop budgets.

Financial managers typically need to have good communication skills to be able to explain their financial recommendations to non-financial staff and shareholders. Financial analysts may also need to communicate their findings to clients or management, but they typically do not have the same level of responsibility for decision-making as financial managers.

Organizational skills are important for financial managers, as they often oversee multiple departments or projects at one time. Financial analysts usually work on a smaller scale, so they may not need to be as organized. However, they still need to be able to keep track of deadlines and deliverables.

Salary

Financial managers earn an average salary of $89,225 per year, while financial analysts earn an average salary of $71,352 per year. Both of these salaries may vary depending on the size of the company, the location of the job and the level of experience the employee has prior to taking the job.