Jobs in the financial sector can come with very competitive pay packages. This indicates that they are in great demand, with admittance requirements as stringent as the wages that they command. For the most majority of them, a bachelor's degree is the very minimum need, and many professionals have earned degrees at the graduate level. First and foremost, they include master's of business administration degrees; but, other types of master's degrees and even doctoral degrees are not unheard of. In most cases, a high level of proficiency in statistics and mathematics is highly sought.
Having said that, the financial business is quite diverse in terms of its job options. You have the option of working in the finance department of a company, the banking and financial services industry, the world of investment banking, or the financial markets.
These professions provide starting compensation that is much more than the national average, and income may skyrocket from there. The following is an overview of high-paying positions in the financial sector.
Jobs in the financial sector are profitable, but the entrance requirements are just as stringent as the entry-level salary expectations.
The majority of occupations in the financial sector need a significant degree of education, particularly in the fields of mathematics, economics, and statistics.
There are six lucrative careers in the financial sector: portfolio manager, corporate finance manager, investment banker, trader, and economic and financial analyst.
Portfolio Management Jobs
The administration of one's portfolio is often regarded as among the most prestigious positions available in the financial services sector. Portfolio managers, who are sometimes referred to in common parlance as money managers, are responsible for personally supervising the investments of retail and institutional clients in their day-to-day job. This gives them a vast lot of authority, but also a significant responsibility. They provide customers with tailored investment plans and particular investment choices, and they often have discretionary authority in carrying out those strategies to meet the objectives of the client.
It is typical practice for portfolio managers to develop expertise in a specific asset class, such as stocks or fixed income, and to focus their investment strategies accordingly. Still, there are certain managers who have a sharper concentration. A manager may be an expert in certain categories of equities, such as high-yield bonds, blockchain-related businesses, or specific sorts of stocks. Individuals having a background in research and analytics may be sought after by focused funds using these types of expert managers. Others have more expansive mandates, such as a multi-asset class approach, and the companies that have these types of mandates often search for managers who have a knowledge and history in investments that spans a similarly broad spectrum.
There is a diverse range of employers operating in this area, each of which focuses on a particular subfield. Funds are available for retail investors via a variety of providers, including investment businesses and financial service corporations. Investment banks provide strategic counsel to a wide range of clients, including governments, huge enterprises, and organizations. Customers of commercial banks have access to a wide variety of investment options. Individuals with a high net worth are the focus of the services provided by money management corporations, portfolio management companies, and hedge funds.
In addition to obtaining a bachelor's degree and a master's degree, the Chartered Financial Analyst (CFA) certificate is something that a good number of people who are interested in managing money ultimately pursue. In most cases, a job as a portfolio manager is a "destination" post that does not lead to any other positions. Therefore, rather than continuing climbing a career ladder, portfolio managers may choose to handle greater quantities of money, or they may quit their current position to establish their own company or hedge fund.
Work Opportunities in Corporate Finance
Another option for those interested in pursuing a career in this area is to work their way up via a company's finance department. Those who have expertise in this area may get employment in a wide number of businesses.
Positions Available in the Field of Corporate Finance
Manager of Finance: Finance managers are among the highest-paid professionals in the financial sector, and every company has at least one of them on staff. They are in charge of all of the financial elements of the company, which includes risk management, planning, accounting, and the preparation of financial reports.
Accounts Manager: The accounts manager is in charge of overseeing the preparation of ledger accounts and financial statements, in addition to being accountable for the general accounting function. Individuals seeking employment with some companies can be required to possess both the Certified Public Accountant (CPA) qualification and at least seven years of experience working in the accounting industry.
Credit risk, market risk, operational risk, and liquidity risk are just some of the hazards that may befall firms, and risk managers make it their job to stay abreast of all of these potential problems. To assist them in measuring, managing, and mitigating these risks, businesses are increasingly spending enormous amounts of money on cutting-edge technology as well as the people who work with it. After the Great Recession, numerous scandals and failures led to tighter government and industry regulations, which in turn led to higher accountability standards. As a result of these scandals and failures, the field has gained an enormous amount of importance in banks and other financial institutions.
Receiving certification from either PRMIA or GARP, two of the leading certifying organizations in the field of risk management, is a good approach to kick off a career in risk management.
Jobs in the Investment Banking Industry
Investment banks generally collaborate with major firms, governments, and other significant financial institutions to either assist such entities in the process of capital formation or provide strategic advice to those entities. They put money into startups or businesses with high growth potential, act as intermediaries in mergers and acquisitions, and help businesses go public. They also routinely purchase and sell a variety of financial items, including stocks, bonds, and other assets. These transactions are common for them.
Goldman Sachs and Morgan Stanley are two of the most well-known financial institutions in the world, but they are not the only companies that are looking to hire investment bankers. There are divisions dedicated to investment banking inside large commercial banks such as Citigroup, as well as within smaller regional and boutique banks. Investment bankers are employed by alternative asset management businesses such as venture capital firms and private equity organizations. Other types of alternative asset management corporations include: There are many major corporations that have an internal department that performs the functions of an investment bank and offers appraisals of potential corporate mergers and strategic prospects.
Investment banking has long had the reputation of being a blueblood profession, which may be seen as both a benefit and a drawback. Although traditionally a large number of investment bankers have had illustrious intellectual backgrounds, having attended elite universities and colleges, the industry as a whole has become more democratic, at least in terms of its social aspects. Although it is less common for investment bankers to seek out professional certifications such as the Series 7 or CFA compared to some other types of finance jobs, there is still an air of elitism surrounding the profession. MBAs are frequently required, and the industry is known for its high standards of education.
Jobs Available Within the Investment Banking Industry
Mergers and Acquisitions (M&A): Bankers that specialize in mergers and acquisitions have developed a specialty in the provision of strategic assistance to businesses that are interested in combining forces with their rivals or in purchasing more modest organizations. In order to assess the viability of these large-scale prospective agreements, investment bankers that specialize in mergers and acquisitions use financial modeling. M&A experts need to be able to persuade high-profile executives of the merits of their ideas, therefore it is essential that they have the ability to effectively communicate with clients. These occupations generally demand contact with high-profile executives.
The underwriting division of a bank is responsible for sourcing new funding for the business. Underwriting experts will often concentrate on either debt or equity, and they will frequently also have an industry-specific concentration. These bankers often operate in client-facing positions, working with external contacts to ascertain the amount of cash required while simultaneously collaborating internally with traders and security sellers to evaluate which choices have the most advantages. The practice of underwriting is not confined just to investment banks but has expanded to a significant degree into bigger universal banks over the course of the last several years.
Private Equity While many investment banks do have private equity divisions, private equity employment are more often found in specialized, smaller organizations. Bankers operating in this sector of the economy raise capital for private businesses and organizations, retaining a share of the profits generated by any transactions in which they are involved. It is typical for people working in private equity to have previous experience working in investment banks in addition to having exceptional academic qualifications.
Venture Capital: Venture funding businesses have a tendency to specialize on giving fresh capital to rising companies. These companies are often in fields that are fast expanding, such as the technology industry, the biotechnology industry, and the green technology industry. Although the majority of the firms that are targeted will inevitably fail, venture capitalists often find success by selling their holdings in the company when it is still in its early phases of growth, therefore realizing enormous profits on their investments. Employees working for venture capital companies often excel at negotiating business deals and calculating numbers, in addition to being knowledgeable about emerging technology and concepts. In most cases, the thought of finding "the next new thing" excites them and gives them a feeling of excitement.
The image of a person on Wall Street buying and selling stocks, bonds, commodities, currencies, and other financial instruments is epitomized by these types of occupations. But in today's world, the action may take place a long way from Wall Street.
Jobs in trading are available in commercial and investment banks, asset management companies, hedge funds, and other financial institutions. Traders' primary objective while using a bid/ask spread is to generate a profit, either for the company for which they work or for the customers they serve. Traders who work for asset management companies look for the best price for a security when they are performing transactions on behalf of a customer. On the other hand, traders who work for hedge funds strive to take proprietary positions in the hope of profiting from anticipated market changes.
It used to be that one might become a successful trader even without having completed any kind of formal education. Many traders these days have a background in a finance-related field from a reputable university, and frequently many have advanced degrees in statistics, mathematics, or other fields of study that are related to the industry. This is despite the fact that the career path still tends to be somewhat less defined than it is for, say, investment banking. In the early stages of their professions, it is normal practice for traders to sit for the Series 7 and Series 63 examinations.
Traders that have a history of successful performance will often be given greater sums of funds. It is not at all unusual for successful traders to launch their own hedge funds after becoming independent.
Different Categories of Trader Jobs
Sell-Side Traders Sell-side traders often find employment with financial institutions like banks. They do this for the advantage of the bank's customers as well as for the profit of the bank itself when they acquire and sell items.
Traders are also employed by buy-side corporations such as asset management firms. These firms are known as "buy-side." They often follow the instructions of a portfolio manager while buying and selling stocks and other securities.
Traders in Hedge Funds Hedge fund traders do not strive to fulfill customer orders; rather, their primary objective is to maximize profits for the fund as a whole. As is the case with employment on the buy side of the market, traders working for hedge funds may receive instructions from a portfolio manager or they may be allowed to make their own decisions about purchases and sales.
Jobs Analysis of the Economy
In order to identify significant patterns, economic analysts focus their attention on broad aspects of the economy and the markets. People who get a kick out of studying data, keeping an eye on trends, and forming predictions about the future of financial markets based on what they see in those patterns are often drawn to these types of employment. Writing, giving presentations in front of an audience, and extensive use of Excel or similar spreadsheet tool are common duties associated with analytical occupations.
There is a wide variety of employment opportunities available in this field, including those in the roles of economist, strategist, and "quant." These positions may be found in investment banks, money management companies, and other conventional organizations within the realm of finance. They are also common in the public sector, in government, and even in academic institutions like universities. The majority of financial analysts have an MBA, and a significant number also have a Ph.D. Experience writing and even publishing in the sector is beneficial because of the significant role that writing plays in a variety of positions in this industry.
Once inside, however, financial analysts enjoy a degree of freedom that many other finance occupations do not provide. This is due to the fact that the first barrier to entry is rather high. Work in the analytical field often allows for mobility between various sorts of companies. It is possible for an experienced economist to go from working for an investment bank to working for a university to working for the government while maintaining roughly the same level of responsibility in each position.
Different Categories of Work in Economic Analysis
Economist: Economists may be found working in a wide range of financial organizations. Economists may be found working in a variety of settings, including central banks, investment banks, asset management organizations, and even university institutions and government agencies. An economist's day consists mostly of data collection and analysis, with the goal of better explaining present market or economic conditions and making accurate projections on future developments.
There is a narrow line that separates a strategist from an economist, and an economic strategist walks that line. The economy as a whole is often the primary focus of economists, while the financial markets are the primary area of concentration for strategists. It is more probable that positions for strategists will be found in financial institutions such as banks and money management corporations as opposed to university and government organizations. Research analysts often serve as the entry point for many people who go on to become strategists. These analysts often specialize in one sector or field.
Quant: While certain professions in economic analysis need public speaking or writing, quants often operate behind the scenes. However, some roles do demand public speaking or writing. In this domain of analysis, experts develop mathematical models with the intention of predicting the behavior of market participants. They work for a variety of businesses, such as banks, hedge funds, and money management organizations, among others. The majority of professionals in the quant space have educational backgrounds in mathematics or statistics, often having a doctoral degree.
Positions Open for Financial Analysts
Although they may sound the same, these positions are not the same as the analytical ones that were covered before. Analysts working for companies in the financial sector are often tasked with doing research on possible investments and providing traders and portfolio managers with thoughts and suggestions to assist them in their decision-making. Financial analysts may also be employed by companies that are not banks. In these settings, they are often responsible for analyzing the financial status of the firm and contributing to the formulation of budgetary plans.
Jobs Available in the Field of Financial Analysis
Analyst of Investments Investment analysts often specialize in one or more areas, such as certain regions of the globe, industrial or economic sectors, or kinds of investment vehicles. Analysts of investments may also focus on specific investment strategies. Analysts who work for sell-side organizations often provide purchase and sell recommendations to clients as part of their job responsibilities. When working for a buy-side firm, analysts often provide their portfolio managers with recommendations on whether assets should be purchased or sold.
Financial analyst: Financial analysts often work for more conventional organizations (those that are not in the financial industry) or for government bodies. To assess cash flows and expenditures, to manage budgets, and for other purposes, almost every significant firm, regardless of the sector in which it operates or the industry it is a part of, employs financial analysts on its staff. These analysts may also aid with determining the most advantageous financing structure for the company, or they may be able to provide assistance with obtaining funds. Financial analysts have the opportunity to further their careers within their companies, perhaps reaching positions such as treasurer or chief financial officer in the future.