A career in finance isn't all about money, though it starts there. For the business graduate, earning a degree is just the beginning. What's left is to take a closer look at the available career options and then to measure which industry sectors have the greatest need for new professionals. It's also important to consider your own interests and strengths as you discern the type of work that you'd enjoy and at which you would excel.
The Financial Services Industry
The financial services industry is multifaceted, offering a variety of positions that cater to different skills and interests, along with sub-industries that encompass niche opportunities. Researching the possibilities in financial services will help you to land the job that has is most compatible with your interests and skills. The same is true for professionals who are seeking a career change and who want to give a new sector a shot. The sectors below represent some of the more common career paths in the financial services industry.
Financial planners help individuals develop plans that will ensure their present and future financial stability. Typically, they review a client's financial goals and generate an appropriate plan for saving and investing that fits the client's individual needs. The plan may focus on wealth preservation or investment growth and may even include estate and tax planning.
Most financial planners work in either large, nationwide groups or in smaller, locally based firms. Some planners charge a flat fee, and others charge a percentage of the client's assets under management (AUM), where they receive commissions on the products they sell—like mutual funds.
Generally, financial planners with the Certified Financial Planner (CFP) designation are the most in-demand, as their training is rigorous. They must attain 6,000 hours of financial planning experience, pass several exams—including a two-day, 10-hour case-study exam—and meet continuing education (CE) requirements.
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Corporate finance jobs involve working for a company in the capacity of finding and managing the capital necessary to run the enterprise. This is done while maximizing corporate value and reducing financial risk.
In a company's corporate finance department, you may:
- Devise the company's overall financial strategy
- Forecast profits and losses
- Negotiate lines of credit
- Prepare financial statements
- Coordinate with outside auditors
More sophisticated corporate finance jobs might involve mergers and acquisitions (M&A) activity, such as calculating the value of an acquisition target or gauging the wisdom of spinning off a particular division of the company. Corporate finance positions exist in companies of all sizes, from large international entities to small startups. The roles of financial analysts, treasurers, and internal auditors also come under the umbrella of corporate finance.
Commercial banks from large entities to local institutions offer a wide range of financial services, from checking and savings accounts to individual retirement accounts (IRAs) and loans. Positions in the commercial banking sector include bank tellers, loan officers, operations, marketing, and branch managers.
Talented professionals can advance from a local branch job to a position in a bank's corporate headquarters, where such a promotion would expose you to other areas of commercial banking, such as international finance.
Some of the most glamorous—and intense—financial careers are jobs in investment banking. Investment banking jobs facilitate new issuance of corporate securities and bring them to market for investors to purchase. Investment banks also trade securities and advise both corporations and wealthy individual investors.
Typically, investment banking firms have numerous divisions and groups with different objectives and responsibilities. Working in a traditional investment bank would allow you to interact with issuers of securities, and M&A professionals. You might even work on the trading desk, trading stocks, bonds and other securities in the secondary market. Or, you could become a qualitative research analyst in either stock research, corporate bonds, or other fixed-income securities.
Hedge funds are largely unregulated private investment funds whose managers can buy or sell a wide array of assets and financial products. Because of the mystery that surrounds this type of entity, hedge fund jobs are also considered by many to be somewhat glamorous.
Typical hedge fund jobs include:
Private Equity, Venture Capital
Private equity professionals help businesses find capital for both expansion and current operations. They also provide financing for a number of corporate business transactions, such as managed buyouts and restructurings.
At times, a private-equity job may involve working as an interim executive at a struggling company, where your success helps determine the fate of the company.
Venture capital (VC) professionals spend most of their time with startups or small, fast-growth companies. Venture capital firms evaluate the pitches by founders and small-company leaders to determine if the firm will make an investment. Sometimes referred to as "vulture capitalists," VCs are known to structure deals that favor the investor, not the company receiving funding.
The hope of the VC is that the funded company will someday go public—that is, make their stock available in the public stock market. The venture capital business is tough: The failure rate is high, but the rewards, if they are realized, can be huge.
A job in the insurance sector could involve helping businesses and individuals anticipate potential risks, then try to protect themselves from losses. Most insurance jobs are with large insurance companies. You could begin a career in this sector working as a sales rep selling insurance policies, as a customer service rep working with existing clients, or as an actuary computing risks and premium rates according to probabilities based on historical, quantitative data sets.
Public accounting is a broad field with many opportunities. Certified public accountants (CPAs) help businesses and individuals keep track of their finances according to generally accepted accounting principles (GAAP). Public accountants record business transactions, help prepare financial statements, audit financial records, prepare income tax returns, and provide related consulting services.
Accountants generally work in partnerships. The largest partnerships are known as the Big Four (previously the Big Eight and the Big Six) and include Deloitte Touche Tohmatsu, PricewaterhouseCoopers (PwC), Ernst & Young, and KPMG. But many jobs also exist in many smaller firms. Typically, new hires start as a staff accountant, then advance to audit manager, then tax manager and, eventually, if they can maintain the tough working schedule for many years, a partner in the firm.
Making the Right Choice
To effectively pursue jobs with the highest probability of success, you must measure the demand for the position. Do the research first to discover your options. The time spent uncovering the most interesting possibilities can be time saved working in a job that just doesn't fit.
Different financial jobs require different skills and present vastly different work environments, so it's wise to select one that aligns with your long-term interests and abilities. Someone with solid interpersonal skills, for example, might do well as a financial advisor, while someone who enjoys crunching numbers might do better in public accounting.
Finding Job Opportunities
Financial jobs exist at almost every company in almost every industry. There are two ways to find openings—online and offline—and it's a good idea to use both methods. Keep in mind that financial jobs are highly specialized, so generic job boards are not the best places to seek such positions. When looking offline, specialized executive recruiters (headhunters) can be excellent resources for both financial job opportunities and career advice. Your university's alumni association can also be very helpful by putting you in touch with industry insiders and B-school alumnae who are willing to provide insight and sometimes job leads.
Industry conferences and other networking events are also great places to look for financial jobs. Concerning networking, never forget the value of personal interaction—everyone you meet could know someone who knows of a job opening. Keep your avenues of communication open by following up in a professional, yet personal way, with every contact—write a thank-you email or forward an article of common interest.