Careers in Finance
Now that we've cleared that hurdle, you may finally utter those famous words from the blockbuster movie Jerry Maguire. And despite the fact that Cuba Gooding Jr.'s character in the movie is a football player and not an ambitious investment banker, the statement resonates (oh-so-loudly and clearly!) with everyone who wants a job in finance, particularly high finance.
So, by all means, yell it out in a loud voice and demand, "Show me the money!" Yes, you should rid yourself of that thought. Phew!
Now that you've finally thrown it up, compose yourself and continue reading... Many people have the misconception that in order to have a successful career in finance, all one needs is a head for money, the ability to swiftly crunch numbers, and a college degree. However, the reality is that it is far more difficult than that.
An insatiable fire in their bellies is tempered by patience; tons of experience in the trenches; guts, grit, and an appetite for risk; the correct skill set; adequate educational credentials; and a thirst to keep learning are all behind the gloss and shine of those Wall Street hot guns.
And how could we have possibly forgotten? In contrast to the majority of other professions, all that is required to be a successful entrepreneur is an insatiable desire to walk the financial tightrope.
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What's the purpose of financial services?
A job in finance is not only thrilling and fulfilling, but it also often results in extremely high earnings. You need to have a brain for economics, accounting, and the ability to swiftly and intuitively absorb and process complicated financial ideas and data in order to be successful in this field as a young person. However, you also need to have enormous ambition.
Money management is the most important aspect of finance. This term may be further subdivided into two other groups, namely financial management and financial services.
It doesn't matter whether you're running a corporation, a nonprofit organization, or even the government: good financial management is all about making the most of the resources available to you. In this stage, financial managers work to develop and put into action ideas that will boost an organization's overall profitability.
On the other hand, the financial services industry is focused entirely on the transfer of funds between savers and borrowers, the management of investment accounts, the raising of capital for businesses and governments, the provision of investment advice, and the reduction of the risks of monetary loss.
Those who work in this industry may focus on the debt market, the capital market, futures and commodities, hedge funds, mergers and acquisitions, or they may work in areas that are less stressful, such as the banking and insurance sectors or corporate finance.
Qualifications Required for a Career in Finance Regarding Education
The majority of job paths, particularly those beginning at the entry level, call for little more than a bachelor's degree. A degree in the liberal arts is an excellent place to begin, but specializing in topics like economics, finance, business, and accounting is a tremendous advantage.
However, here is a challenging question:
- In order to work in business administration, do you need a bachelor's degree or a master's degree?
- Certainly not in every case. So why is everyone making such a big deal over just three letters?
- A Master of Business Administration degree is seen by many as a "pseudo-requirement," which is nothing more than a screening tool that helps companies choose candidates from a huge number of applications.
- An MBA degree offers you an advantage in recruiting, as well as in promotions and salary, despite the fact that a bachelor's degree from an accredited institution with a suitable major and on-the-job training may be sufficient.
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- Because of the stringent regulations that are placed on the whole financial services business, including personal finance, corporate finance, wealth management, and insurance, it is advantageous to have a law degree.
- For instance, a financial planner would have to deal with laws relating to estates, trusts, real estate, and inheritance, whereas asset managers looking after the affairs of the ultra-wealthy may need to offer tax advice on a complex pool of assets. Both of these professions are required to deal with a variety of legal issues.
Knowledge of Computers
- Processing and analyzing data is a regular need for those working in finance, particularly at the more basic levels, such as financial analysts and even associates, who are responsible for carrying out the menial tasks.
- Software programs aid with the creation of databases, as well as computing and modeling, as well as the creation of charts, graphs, and tables. They are the most effective tools for doing this task.
- Consider a job in finance to be a kind of never-ending education. If you are in it for the long haul and you want to build your credibility, then you need to regularly take examinations, get licenses, and certify yourself. If you are in it for the long haul, then you are in it for the long haul.
- The sort of professional you are will determine the certification that is necessary for you to get. For instance, traders who buy and sell securities and deal in financial goods are required to get a license from the Financial Industry Regulatory Authority. Traders also need to be able to demonstrate that they have enough knowledge and experience (FINRA).
- On the other hand, financial advisers need to get their CFP certification, which stands for Certified Financial Planner, particularly for senior roles.
- The Chartered Financial Analyst (CFA) test is taken by financial analysts because it provides certification that they are knowledgeable in the areas of securities and investment vehicles. In addition to this, it suggests that they have a strong command of the mathematical methods used to evaluate securities.
- If you want to pursue a career in accounting or auditing, you absolutely need to get your Certified Public Accountant (CPA) credential, which is another highly sought-after qualification. Do you get it now?
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Finance Offers a Diverse Range of Career Options and Payscales
The majority of those who work in finance do so because they like the challenge, but let's be honest: the money can be rather lucrative as well. But before you start looking for numbers on this page, let's first make sure you comprehend the following principles.
A bonus or commission is usually always included as a component of payment for a financial expert. This component is added to your income, often known as your "base pay." At investment banks, asset management companies, and brokerages, bonuses make up a far higher portion of an employee's salary than they do in the insurance and banking industries.
Additionally, as you climb the corporate ladder, a larger portion of your pay will be provided in the form of bonuses. These incentives are determined by a mix of the revenues of your department as well as those of the firm as a whole. In contrast to bonuses, commissions always follow the same pattern.
Salespeople are often paid on commission, like financial advisers and other employees that work in commission-based roles. Your commission is determined not only by the revenues earned by their customers but also by other important criteria such as the value of their customers' accounts.
Now, in case you were seeking for real numbers, I've included them below. A Financial Analyst makes a starting income of roughly $80,000 per year, which is higher than a Branch Manager of a retail bank, who gets $62,000 at the entry level, increasing up to $154,000 at the senior level. The starting compensation for a Branch Manager of a retail bank is $62,000.
The fact that this is a career that is considered to be "safe" is, nevertheless, a source of some solace. An Insurance Manager's yearly compensation, which includes incentives, is around $103,800, however a Branch Manager makes more than an Insurance Manager.
As a Trader, you may expect to make $70,000 when you first start out, with that number increasing to $200,000 when you become an Associate Trader. Even more profitable are jobs in the derivatives industry.
But when it comes to investment banking, the stakes couldn't possibly be much higher. Junior staff members, including those working in sales, trading, research, and mergers and acquisitions, may earn up to $195,000 per year, while Associates bring in around $270,000 annually.
The pay for senior positions, such as Vice President, may reach as high as $460,000 per year, while the compensation for Directors or Executive Directors can reach as high as $700,000 per year.
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Perspectives on the Financial Services Industry
The Indian financial services industry is solid and, what's more significant, is expanding. The nation is home to a rapidly expanding middle class that, according to research conducted by Deloitte, is expected to account for 20 percent of the overall population by the year 2016, and 37 percent of the population by the year 2026.
Even more encouraging is the fact that India has a relatively youthful population, with projections placing the median age at 31 in 2025 and 38 in 2050.
When this is translated, it shows a population that has more money, a major amount of which is held by young people who like spending and want their money to expand by investing it. Additionally, this group seems to have a higher level of education.
According to Deloitte, the number of people with a high net worth of $1 million or more is expected to climb by 58% between the years 2015 and 2020. This is further excellent news for wealth managers and investment bankers.
As for the banking and insurance industries, well, they, too, have reason to celebrate this momentous occasion. In India, it is estimated that just 35% of families have bank accounts, and 10% of households have life insurance coverage.
This means that there is significant room for expansion. The banking sector also has plenty of reasons to celebrate, as seen by the expanding use of credit cards, the rapid adoption of mobile banking, and the consistent flow of remittances from non-resident Indians (NRIs).