At a glance
- Financial planning analysts assess a business’s performance to help make decisions to generate and improve profits.
- Financial planning and analysis (FP&A) has four areas of focus: budgeting, integrated financial planning, forecasting, and management and financial performance reporting.
- Financial analysts typically need a bachelor’s degree for an entry-level position, according to the U.S. Bureau of Labor Statistics.
- The University of Phoenix Bachelor of Science in Business with a Financial Planning Certificate can help you learn skills to pursue a career as a financial planning analyst.
Financial planning and analysis (FP&A) has four related areas of focus, according to Gartner: budgeting, integrated financial planning, forecasting, and management and financial performance reporting. Financial planning analysts carry out these activities.
The forecasts, performance reports and holistic view of the company’s finances provide essential insights for strategic planning and assessment of current processes. The insights from a financial planning analyst help a company define and manage risks, inform decisions, execute strategies and measure results.
FP&A professionals directly influence decision-making. They might report to top executives, like the chief financial officer. Here is a look at what a financial analyst does and how to become one.
What does a financial planning analyst do?
A financial planning analyst’s job duties vary depending on their employer’s industry and the organization of its finance department. That being said, many analysts are required to do the following:
- Forecasting and budgeting: Financial planning analysts look at reports and define trends within the company and the overall market. They then use this information to create realistic budgets that account for variables. According to business software company NetSuite, many businesses use rolling budget and forecasting models to continually update and improve plans.
- Performance reporting: FP&A professionals use profit and loss (P&L), management analysis and variance reports to measure adherence to budgeting plans across the company and assess overall financial performance. In addition to these documents, executives might ask for other reports to provide insights into a specific area of the business.
- Profit and cost-saving analysis: Analysts assess financial performance in relation to the profit margins of each product or service the company provides. They might use these insights to suggest cost-saving measures or advise increased focus on activities offering the best profit margins.
- Modeling: Financial planning analysts can also create forecasts based on specific situations within the company or economic scenarios. These insights help with risk management and planning.
FP&A professionals use accounting and analytics software to manage and analyze data and visualize it for presentation to company decision-makers.
Essential skills for financial planning analysts
Financial planning analysts need technical skills, an understanding of their company’s industry and structure, and soft skills, according to the U.S. Bureau of Labor Statistics (BLS).
- Quantitative skills: FP&A professionals use financial data for almost every aspect of their job. They need to be comfortable using financial formulas and making algebraic calculations manually or with computer software. A knowledge of statistics and probability is also vital.
- Computer skills: FP&A jobs involve using software to collect, organize and analyze data and make forecasts. In addition to spreadsheets, database applications, and accounting or bookkeeping software, this job also requires a knowledge of data visualization software.
- Critical thinking and analytical skills: Financial planning analysts must be able to assess research and forecast results, form conclusions and support suggestions with data. They also need the ability to select information to use for forecasting.
- General business knowledge: FP&A specialists provide a holistic view of company finances. This requires an understanding of corporate structures and how different departments interact. An understanding of economics is also helpful when accounting for external factors affecting the company.
- Budgeting abilities: Financial planning analysts need to understand how to read financial statements and data and use them to create a budget that accounts for all spending and potential income.
- Communication: Despite the focus on quantitative analysis, financial planning analysts are not only number crunchers. In this career, you need to be able to communicate with peers in your department and be able to succinctly report findings to company managers and executives.
In addition to the aforementioned skills, analysts need organizational skills and the ability to pay close attention to details and complete different detail-oriented tasks.
Financial planning analyst tasks and responsibilities
Financial planning and analysis professionals have specific responsibilities and work on different tasks and projects based on the needs of their employers. Here are some of the most common duties FP&A professionals have.
- Market research: Analysts look for market trends and analyze economic data related to their employer’s industry and competitors. Insights from this research can inform budgeting and forecasting activities.
- Cost-benefit analysis: FP&A teams are often responsible for performing cost analysis to forecast profits and potential benefits for an impending project or a strategy change.
- Trend analysis: Trend analysis seeks to find trends within a company or in external markets. Well-defined trends help with forecasting because they show what conditions will be if the trend continues.
- Budgets: Financial planning analysts create budgets that take into account different departments and activities within a company. These financial plans take into account current activities and financial forecasts.
- Risk management: Forecasting, trend analysis and market research can help define potential risks and inform overall financial management decisions. FP&A reports can focus on risks and offer situation-specific models illustrating best- and worst-case scenarios.
- Evaluation: Financial analysts also collect and analyze data to assess each department’s or team’s performance in relation to budget plans and financial forecasts.
In many cases, FP&A teams compile reports based on their research, analysis, forecasts and findings.
How to become a financial planning analyst
Financial planning analysts provide holistic views of a company’s financial performance. Their budgets and forecasts affect other departments. As an analyst, you might need to work with the other departments.
For example, an FP&A specialist might work with the accounting department to ensure budgets are accurate and obtain input from the sales department to set reasonable benchmarks and track performance.If you’re interested in pursuing this role, here is a breakdown of the required education and skills.
Education requirements and certificates
Financial planning analysts have a significant influence over the financial plans and strategies of a company. Therefore, positions require a solid knowledge base that includes an understanding of business.
According to BLS, financial analyst entry-level positions require a bachelor’s degree in business or a related field, like finance or accounting. You might also consider an undergraduate program that includes a financial planning certificate.
In addition to business, financial planning analysts can choose to study accounting or finance. These two degrees offer different advantages: Accounting focuses more on budgeting and planning while finance focuses more on analytics and the financial aspect of business operations.
While most employers typically require a bachelor’s degree, BLS reports that some employers prefer candidates with a master’s degree. Though postgraduate degrees may not be necessary to obtain an analyst job, an MBA, along with experience and specialization, may be necessary to qualify for more senior positions.
A stand-alone financial planning certificate program can help you specialize in FP&A if you have a relevant degree. Industry certifications and licenses may be preferred or even required depending on the employer. BLS notes that a license is generally required to sell financial products. These licenses often require sponsorships by employers, meaning they will not be expected prior to being hired for a position. Industry certifications may also be preferred or required, but that is up to the employer.
Financial planning analyst job outlook and salary expectations
Financial analysts earned an annual salary between $58,950 and $169,940 as of May 2021, according to BLS. Salary can vary depending on experience, industry, employer size, education and location. BLS projects the demand for qualified analysts to grow by an estimated 9% from 2021 to 2031.
Salary ranges are not specific to students or graduates of University of Phoenix. Actual outcomes vary based on multiple factors, including prior work experience, geographic location and other factors specific to the individual. University of Phoenix does not guarantee employment, salary level or career advancement. BLS data is geographically based. Information for a specific state/city can be researched on the BLS website.
BLS Occupational Employment Projections, 2021-2031 is published by the U.S. Bureau of Labor Statistics. This data reflects BLS’ projections of national (not local) conditions. These data points are not specific to University of Phoenix students or graduates.
Earn your degree at University of Phoenix
If becoming a financial planning analyst sounds like the career path for you, UOPX can help. The University offers a Bachelor of Science in Business with a Financial Planning Certificate that teaches critical skills like strategic financial management and investment fundamentals.
UOPX can help you feel great about making your decision to start your degree. From fixed tuition to around-the-clock-support to opportunities to earn credit for work and life experience, UOPX offers ways to save time and money on your degree. To learn more, visit phoenix.edu. Here is a brief look at other relevant programs to consider if you’re interested in financial planning and business:
- Financial Planning Certificate (Undergraduate)— In as little as seven months, students can gain skills to help others navigate the world of investment and financial planning. This program teaches how to build personal finance plans, analyze investments, manage portfolios, help clients choose insurance coverage and more.
- Bachelor of Science in Business— This online degree program prepares students for management roles in a variety of organizations while also innovating for the future of business with coursework like inclusive leadership. Courses also teach how to integrate decision-making skills to address business needs, integrate business concepts and principles to advance organizational goals, analyze interrelationships among distinct functional areas of an organization and analyze logistics involved in global business operations.
- Bachelor of Science in Business with a Financial Planning Certificate— With skills you’ll gain in this program you can help people make wise money management choices. Skills taught in this program include financial planning and analysis, operations, management, leadership and communication.
- Bachelor of Science in Accounting with an Associate of Arts with a concentration in Business Fundamentals— In this program, you’ll learn skills such as recording and communicating measurable business activities to stakeholders, analyzing financial statements, and applying accounting principles to domestic and international transactions, taxation and auditing.
- Master of Business Administration— This program aids in developing skills to make important business decisions such as operations, communication, leadership and management skills.
