The financial industry is easy enough to break into, but carving out a viable long-term career niche is tough. To succeed in this industry, one must have discipline, intelligence and a thick-skinned psyche. There are many different positions in the financial services industry, and it often takes years for individuals to find and settle into a position that is a good fit for them.
So what job is the best fit for you? In this article, we'll give you the tools you need to begin making this important decision.
In general, if you are a persuasive and knowledgeable individual and don't mind working long hours, a job as a registered representative might be a good fit. If on the other hand, you love numbers, are good at math and excel spreadsheets, and relish delving into the financials of a public company, then you might want to be an analyst. If you have both skill sets, a position as a financial advisor could suit you best.
Of course, it's important to understand that most people who enter the brokerage industry don't end their careers in the same position in which they begin. Most use the knowledge and experience they gain in their earlier jobs to find other positions that better suit their interests. Where you end up depends on your aptitude and your desire to explore different job options.
Twenty years ago, it wasn't uncommon for individuals in the financial industry to come from varied backgrounds. These days, a four-year college degree is a must. Typically, a bachelor's degree in business administration is the best course. It opens the most doors as well as gives the potential job applicant more alternatives should he or she want to deviate from his or her initial career path down the line.
If your goal is to become a registered representative and sell securities, you do not need a masters in business administration (MBA). However, if you want to break into some of the more prestigious firms' training programs (such as Goldman Sachs), it will help to earn your MBA. As an analyst, it is rapidly becoming a must. Keep in mind that this is a highly competitive industry, and this additional degree will help set you apart from the crowd.
While there are instances in which a diploma from a big-name school will help you, employers are becoming more focused on class rank and grade point average, as well as any practical experience you've had in the field.
With that in mind, if you want to become a money manager, financial planner or enter some other specialized field within the industry, an MBA is highly recommended. To be clear, you can still obtain a position in these fields without an MBA, but preference is usually given to candidates that have had some form of post-graduate study.
In the MBA program, consider studying finance and economics. Again, these will open the most doors for you later in your career.
Internships are available for those who want to obtain positions as analysts, bankers, registered reps or virtually any other position on Wall Street. Therefore, in an undergraduate or a graduate program, it is important to try to land an internship in the field where you want to work. Prospective brokers and/or analysts should try to get a job as an assistant at a local firm. Employers look for this type of experience on your resume.
What if you know you want to get into the industry, but don't exactly know the type of long-term job you want or what internship to take?
If this is the case, consider taking any front-line sales or office position that will allow you to learn as much as possible about the industry. Again, this experience will look great on your resume and will educate you on what you might like to do down the line as you gain more experience.
Securing Work Experience
The first step in getting the appropriate work experience is to check with your college. Often, the student services center or a guidance counselor may be able to provide you with local job listings, or actually set up interviews with potential employers. If this doesn't work out, or if the position isn't feasible because of your school schedule, consider approaching firms close to home on your own.
Obviously, we all like to be paid for our time, but consider working for free during your internship – that is, as long as you receive a letter of recommendation for your work from your supervisor. In the long run, this is the best compensation you can ask for and your first employer may even start you off in a higher position or at a higher salary because of your experience.
Obtaining securities licenses is almost sure to advance your career in the financial services industry. As a broker, you will need a Series 7 license and a Series 63 license. This will allow you to sell stocks, bonds, and other variable securities in both your home state and other states, assuming that you and your firm become registered in those states. Additional licenses may be required as you move up the corporate ladder. For instance, if you obtain a managerial position, you may be asked to obtain your Series 24, or principal's license. Your firm will sponsor you for these licenses. However, be forewarned: these exams are difficult and require a great deal of reading and memorization.
Analysts may also be asked to take the above-mentioned examinations as well as a Series 16 supervisory analyst exam, which allows them to issue and distribute reports. Additional training may require the analyst to sit for the Chartered Financial Analyst (CFA) exam sessions. This series of three rigorous exams will test your financial knowledge and enable you to obtain higher-level advisory positions with hedge funds or mutual funds as a portfolio manager.
The Series 7 is typically the base license. For those who want to become options principals, for example, the Series 4 license will probably be required. For those who want to branch off down the line and become equity traders, this would require a Series 55 license. In short, whenever you branch off to specialize in a given field, an additional license will be needed, and your firm will sponsor you for that. You cannot take those exams without being an employee of an NASD-registered firm and, typically, you must first attain your Series 7 qualifications before sitting for any specialized licensure.
Many firms do not offer sophisticated training programs. When this is the case, the would-be broker or analyst typically starts as someone's assistant. This is an entry-level position that will allow you to move up the ladder, depending on your aptitude and level of ambition.
There are also a large number of firms, particularly the larger bulge bracket companies that offer formal training programs, which can last for about a year and where your production, and/or progress is tracked and measured regularly against your peers. Often, these programs are very stressful, as they are typically considered your probationary period. The good news is that if you make it through these training programs, your odds for success within the industry improve dramatically.
Moving Up the Ranks
In some jobs, seniority is a major factor in moving up the corporate ladder. Although seniority might help you in your Wall Street job, typically only the smartest, most aggressive employees advance. This means that you must know your job and be diligent. You must also constantly measure yourself against your fellow employees to determine whether your skills measure up. This may mean staying late or putting in some extra work to make sure your projects are top notch.
Long-Term Career Objectives
Analysts seem to have the most career choices in the industry. They can become producing brokers and can even make the switch to becoming financial writers. Brokers can make those same switches, but it is much harder. This is because a broker is usually only involved in the sales process, and has little or no involvement in the research process. In addition, they often have very little opportunity to hone their writing skills, which is vital to becoming an analyst.
Many brokers eventually decide that they want to specialize in options, or become branch managers. In this case, their sales experience puts them on a better path to achieving that goal.
The Bottom Line
Breaking into the financial services industry isn't too difficult, but building a career and earning a reputation as a savvy player is tough. You should expect the process to be mentally trying and time consuming. Succeeding and moving up the corporate ladder will depend on your desire to succeed and beat out increasingly stiff competition.