Risk Analyst Career Path Strategies

November 1st, 2014

Whether you’re completing school and starting to explore career options or are looking to take your career in a new direction, a risk analyst position is worth your consideration. A risk analyst – also known as a risk manager – is a specific type of financial analyst. When a financial portfolio is being constructed, these professionals are responsible for determining potential losses and coming up with ways to limit them.

A risk analyst identifies risk or risk behaviors using quantitative or statistical models and other sources. Armed with this information and utilizing sharp analytical skills, they predict possible outcomes and make recommendations to improve them.

Job growth for risk analysts is expected to be much faster than the national average for all occupations at 23 percent a year between now and 2020, according to the U.S. Bureau of Labor Statistics. While job competition can be stiff and deadlines and hours challenging, salaries average in excess of $88,000 a year depending on your level of expertise and experience.

Types of Risk Analysts

There are a variety of types of risk analysts. The difference generally centers on the specific fields in which they work. For example:

  • Financial risk analyst are well-informed about financial regulations. They analyze investment losses and the market in general.
  • Insurance risk analysts are also known as underwriters or actuaries. They typically work for insurance companies assessing the collective risk of their members to protect the companies against financial loss.
  • Companies selling products and investing in overseas markets require specialized risk managers. These professionals need to know how to limit the risks involved in international business activities, while sustaining profits and growth. If the idea of calculating foreign financial portfolios appeals to you, this may be a good career fit.

How to Become a Risk Analyst

In addition to a strong educational background with at least a master’s degree in a quantitative discipline such as math, physics or statistics – note: a general MBA will not suffice – you need a solid understanding of investment risk systems and portfolio management in order to succeed as a risk analyst.

  • Employers seek strong analytical and mathematical abilities. Many also prefer skills in statistics; the ability to present complex concepts to multiple audiences; problem solving and project management strengths.
  • Internship experiences provide an additional competitive advantage.

Most U.S. businesses hire only certified risk analysts. This means that in addition to their academic degrees, they have earned at least one of the following professional certifications:

  • Financial Risk Management (FRM): This is the globally-recognized standard for those who manage risk. This designation is valued by employers across diverse businesses and industries.
  • Chartered Financial Analyst (CFA): You must first enroll in the CFA program to earn this qualification. It too is well respected on a global basis.
  • Certification in Quantitative Finance (CQF): This is a six-month online program. The next starting date is January 2015.
  • Global Association of Risk Managers: Among the specialty certifications offered are FRM, as well as energy risk professional (ERP) and risk education.
  • American Academy of Financial Management (AAFM): In addition to North America, AAFM has providers in Asia, the Middle East and Great Britain. This organization also offers FRM and CFA certification.

A specialized risk analyst also benefits from membership in a professional group tailored to their field, such as the Risk Management Association.

For the most sophisticated positions at investment banks and hedge funds, you need skills such as C++ and UNIX, as well as the ability to analyze large data sets with SQL, MatLab and SAS.

Now that you know the basics, are you interested in pursuing a career as a risk analyst? To learn more, read our related posts or contact a specialized career coach at Select Group, Inc., today. As recruiting specialists in the big data field, we have the expertise to coach professionals and find them great jobs that propel them forward in their careers. Contact us today to learn more!

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