Financial Analyst vs. Accountant: What’s the Difference?

Both accountants and financial analysts exist at the intersection of data, finance, and business. These finance professionals analyze financial data to help clients, companies, and institutions make informed decisions. However, the main difference between a financial analyst vs. accountant is that financial analysts try to predict the future — they create models to determine future financial performance. On the other hand, accountants record and report past data, like completed transactions, and use that information to create budgets and complete tax forms. 

So, what are the other differences between financial analysts and accountants? Where do they work, what skills do you need, and how do you know which one might be a better career path for you? 

What Are Financial Analysts?

Financial analysts use data analysis to fuel company decisions, particularly with raising capital and boosting profits. The most common type of financial analyst is a Chartered Financial Analyst (CFA). CFAs are experts in economics, investment management, and analysis. 

Many CFAs are also investment bankers, working at large banking institutions assisting clients with buying and selling securities and facilitating mergers and acquisitions (M&A). 

For example, financial analysts might have the exact “financial analyst” titles, but they also may have titles like:

• Credit analyst
• Financial planning analyst
• Investment analyst
• Investment banker
• Research analyst
• Risk analyst

The work of financial analysts “contributes to the efficiency and well-functioning of capital markets and has served to reduce poverty around the world,” says John Cunnison, CFA, chief investment officer at Baker Boyer. 

To fully understand the breadth of a financial analyst’s work, Cunnison encourages us to consider a company analysis of Coca-Cola: 

“The thorough analyst would need to consider commodity prices, consumer tastes and preferences, public policy and taxes, international trade and conflict, demographics, corporate management and decision making, technology and advances in manufacturing, and global economic growth.”

Some typical job duties for financial analysts include: 

• Financial modeling: constructing financial models to forecast future performance
• Financial analysis: analyzing financial statements to assess a company’s financial health and performance
• Financial reporting: preparing financial reports, such as annual reports and quarterly reports, for internal and external stakeholders.
• Valuation: valuing companies, securities, or assets
• Investment research: conducting in-depth research on industries, companies, and economic trends
• Portfolio management: managing investment portfolios, including asset allocation, portfolio rebalancing, and risk management
• Mergers and acquisitions: analyzing target companies, valuing assets, and negotiating deals
• Advising: advising clients on potential investment decisions

What Are Accountants?

Accountants are finance professionals who review, record, and report financial information for companies, institutions, individuals, and governments. Some accountants work for an accounting firm (like Deloitte or EY) where their clients are large businesses and institutions. Others work in-house, handling their employer-company’s finances exclusively. 

“The main role of an accountant is to manage and analyze the financial data of a company for the purpose of reporting or decision-making,” says Arianna Washington, CPA and senior associate at PwC.

Like financial analysts, accountants may hold the straightforward job title of “accountant,” but also may hold titles like:

• Auditor
• Bookkeeper
• Accounting manager
• Controller

There are also specific types of accountants, like forensic accountants that examine financial misconduct, or tax accountants that help people file their taxes.

Accountants manage data that informs decisions like budget planning, marketing efforts, corporate restructuring, and hiring abilities. 

Some common day-to-day responsibilities of an accountant include: 

• Financial reporting: preparing accurate and timely financial statements, including income statements, balance sheets, and cash flow statements
• Financial analysis: analyzing financial data to identify trends, assess performance, and make informed decisions
• Financial advising: Providing financial advice to clients on topics like tax planning, investment strategies, and business valuations
• Auditing: conducting audits to ensure financial records are accurate and compliant with accounting standards
• Budgeting: developing and managing budgets, and forecasting future financial performance
• Compliance: ensuring compliance with relevant accounting standards, tax laws, and regulations

>>MORE: Learn more about accounting. 

>>MORE: Learn more about accounting. 

Financial Analyst vs. Accountant Work Environment

Both financial analysts and accountants tend to work in office environments. Financial analysts tend to work in more fast-paced and dynamic environments, while accountants work in more predictable ones. Both positions can require longer hours during peak periods. 

Financial analysts often work in teams with other analysts, investment bankers, and portfolio managers. They interact frequently with clients and may have to present findings to clients and leadership to help with high-level strategy.

Accountants often collaborate with other accountants and auditors, but need to be able to present their findings to senior leadership to help them make sound financial decisions. Sometimes — and especially in public accounting firms — they may interact with clients to provide tax advice, financial planning, or auditing services.

Financial Analyst vs. Accountant Salaries and Job Outlook

According to the U.S. Bureau of Labor Statistics (BLS), financial analysts have an average annual salary of $112,950. Analysts working in securities and investing activities (like investment banking) tend to earn more than other types of financial analysts. In fact, first-year analysts at Goldman Sachs reportedly earn a $110,000 base salary — that doesn’t include other forms of compensation analysts may be eligible for, like commission, stock options, and performance bonuses. The field is not only lucrative but fast-growing, with 9% projected job growth from 2023 to 2033.

On the other hand, accountants and auditors earn an average of $90,780 per year and have 6% expected job growth, according to the BLS. In general, accountants working for financial institutions and insurance companies see higher salaries than those working in the government. However, with both financial analysts and accountants, pay depends heavily on experience level. 

Experience Level	Financial Analysts	Accountants
Early Career (<1 Year Experience)	$103,000	$71,000
Average for All Experience Levels	$109,000	$86,000
Experienced (>15 Years Experience)	$149,000	$93,000

How to Become an Accountant vs. Financial Analyst

Education and Certification

You typically need at least a bachelor’s degree to become either a financial analyst or an accountant. For both careers, having advanced education, like a master’s degree, can make you more marketable, improve your ability to be promoted within your job, and make it easier to pass the exams for certifications. 

Accountant Education and Certification

Ultimately, accountants can come from practically any background. However, finance, economics, and business coursework can help build a foundation for accountants who go for certified public accountant (CPA) licenses. 

Accountants often get CPA licenses; many big accounting firms require accountants to gain this certification. 

“A CPA is a professional that has taken and passed all parts of the CPA exam and has fulfilled their state requirements, which typically include a year of work experience and the passing of an ethics course,” says Washington.

However, accountants can also choose to go into management accounting by getting a certified management accountant (CMA) certification. This designation shows a higher degree of financial management skills, making it a great option for those who work in-house at a company and want to take on a managerial role in the finance department. 

Financial Analyst Education and Certification

Financial analysts often study finance, economics, or business in college — this coursework helps set them up for specific certifications, like the CFA designation. 

Financial analysts who work directly with investment instruments, like stocks, bonds, and options, typically need licensing and certification from the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority (FINRA). Many financial analysts choose to get a chartered financial analyst (CFA) designation, but there are other certification options for financial analysts: 

• Financial risk manager (FRM) certification for risk analysts 
• Certified international investment analyst (CIIA) designation for analysts working in Europe and Asia
• Certified financial planner (CFP) certification for analysts who give financial advice, especially in personal finance 

Skills

Both accountants and financial analysts need a mix of hard and soft skills, including: 

• Analytical thinking
• Attention to detail
• Problem-solving skills
• Strong mathematical abilities
• Experience using Excel

Financial analysts need specialized skills in areas like: 

• Financial models, like the capital asset pricing model (CAPM)
• Equity and debt capital markets
• Business valuation approaches
• Data analysis and statistical modeling
• Calculations and formulas, like calculating compound annual growth rates (CAGR)

>>MORE: See the skills investment bankers need for their resumes. 

Accountants must have an in-depth understanding of the generally accepted accounting principles (GAAP) in addition to: 

• Familiarity with financial statements, like cash flow statements 
• Knowledge of local, state, and federal tax laws and regulations
• Experience using accounting-specific equations and formulas, like the accounting equation

>>MORE: Check out the most in-demand accounting skills. 

Both career paths have varied technical skills because of the type of analysis they do: accountants are more past-oriented, reviewing performance and financial statements; financial analysts are future-forward, predicting performance and helping strategic decision-making.

Financial Analyst vs. Accountant: Which One Is Right for You?

Bottom Line: What’s the Difference?

Both accountants and financial analysts analyze financial data to help clients make informed decisions. However, accountants typically deal with past data, recording and reporting transactions and tracking budgets. On the other hand, analysts often handle future data, making predictions about a company’s performance using financial models. 

	Financial Analyst	Accountant
What They Do	Analyzes financial data to make investment decisions, assess business performance, and provide financial advice	Records, analyzes, and interprets financial information to ensure accuracy and compliance with accounting standards
Education	Bachelor’s degree in finance, accounting, economics, or business administration. Advanced degrees (MBA, CFA) can be beneficial	Bachelor’s degree in accounting or related field. CPA certification is often required for career advancement
Average Salary	$109,000	$86,000
Work Environment	Office-based, fast-paced and client-oriented	Office-based, more predictable with busier seasons (ex: tax season)
Skills	Strong analytical skills, financial modeling, valuation techniques, investment analysis, risk management, and strong communication skills	Strong attention to detail, knowledge of accounting principles (GAAP, IFRS), tax laws, and financial reporting

While top-earning financial analysts at investment banks often see six-figure salaries early in their careers, becoming either an accountant or a different type of financial analyst can still be a lucrative career in finance. 

Explore these careers more in-depth and learn the skills you need to get hired with Forage’s free job simulations. 

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