Finance

Finance Career Overview

Finance encompasses a relatively broad range of careers, all of which relate to managing financial instruments and analyzing financial information. Naturally, the demands and salary associated with different positions under the umbrella of finance vary immensely: a starting analyst at a hedge fund can easily make four times more than a bank teller, but must deal with an extremely demanding work environment. Nevertheless, it is easy to find an appropriate career track, as finance-related opportunities exist in a multitude of industries, including:

• Banks
• Large Corporations
• Personal Financial Management
• Financial Planning Institutions
• Colleges and Universities

Finance Training and Education

A bachelor’s degree is a pre-requisite for competitive positions in finance, with many upper-level positions requiring an MBA or other graduate degree. Most top Wall Street firms recruit only from Ivy League schools, but it’s not difficult to start in a branch office and work one’s way to the top or for outstanding students from non-top tier schools to be hired directly. Advancement in finance is highly results-based and therefore extremely meritocratic—high performers are rewarded regardless of academic pedigree.

Finance Career and Salary Outlook

The career outlook for those in finance is good. Employment opportunities are expected to grow at a faster than normal rate through 2014. In particular, personal finance specialists will have many opportunities as the population ages and begins to save for retirement.

According to the Bureau of Labor Statistics, median annual earnings in finance were $66,590 in May 2006, while the middle 50% earned between $50,700 and $90,690. Earnings tend to grow exponentially with seniority, with the highest 10% earning more than $130,130. Fund managers earn a percentage of the assets under management as well as a percentage of profits—for hedge fund managers, this amount is generally 2% and 20%, respectively.

Careers in finance can range from extremely stable to extremely volatile, once again depending on the industry. Those working in big banks or for the government generally have the best job security, while those working in high-risk ventures like hedge funds are less immune to market shocks.

Career Fields/Specializations

Financial Management Career

Those in financial management handle all aspects of a company’s financial matters. They may prepare and present financial reports, make decisions regarding investments and manage the cash flow of a company. In addition to these general skills, they must be knowledgeable about the industry that they are working in, especially when it comes to legal matters. The Securities and Exchange Commission and the Internal Revenue Service are the two key regulators to be aware of in finance, in addition to state-level regulators.

Personal Finance Career

Personal finance specialists analyze markets and help individuals make good investment decisions based on their financial goals. These professionals may help with retirement planning, college planning, or estate planning. Many personal finance specialists advise on a wide range of options, but some specialize in just one area of personal finance, such as retirement planning.

While self-employment is rare in finance compared to other fields, personal financial planners are the exception to this rule. Successful personal financial planners are savvy but also capable of making their clients feel comfortable by explaining financial strategies in clear terms.

Finance Controller Career

Controllers regulate capital flows within a company. Job responsibilities include preparing financial reports and making presentations about the financial health of the company. Controllers are responsible for managing subcontracted financial services external to the company, such as accountants and auditors. Controllers are also heavily involved in investor relations, so the ability to communicate key financial information effectively is essential.

Finally, in a post-Sarbanes-Oxley world, corporate accountability is being emphasized by politicians—making controllers key to regulatory compliance and thus essential to a business’ health.