The Ultimate Guide to a Career in Finance

Finance covers a lot of ground and includes not only how money is managed but also the process of how funds are acquired. It is commonly broken into three subcategories—personal finance, corporate finance and public finance-each of which requires a different skillset and mindset; however, the principles remain similar and each role requires a familiarity and comfort with certain aspects of accounting. The management of money requires sourcing money, which can be done personally or through a bank or through corporate funds, depending on the financing being handled. So, a job in finance requires not only understanding accounting principles, but also a clear understanding of the best tactics for raising and investing capital.

This guide is meant to provide you with a quick overview of potential careers in finance, including their salaries and job outlooks, and detail how you can best position yourself to land a great job. This guide also includes background information on educational programs, scholarships and professional certifications.

A career in finance offers high pay and fast career placement after graduation. For example, the U.S. Bureau of Labor Statistics estimates the number of financial analyst jobs, which enjoyed a median pay of more than $81,000 in 2016, will grow by more than 12% through 2024, well above most categories.

For personal finance advisors, the growth rate over the same period is nearly 30%, so there is no shortage of opportunity for people interested in finance as a career, especially in the United States. Elsewhere, finance jobs are growing at equal or faster rates in parts of Europe and Asia, outpacing most industries.

And for those with a solid background and/or professional credentials, job opportunities are especially good. Finance related positions are viewed as crucial organizational functions and are a profit center within corporations, not just for Wall Street investment houses.

Most people have heard about investment banking due to its renowned competitiveness and high pay, but not everyone realizes there is wide range of finance careers that extend beyond supporting banks—and which still offer similarly impressive pay packages. Some finance positions require skills similar to accountants but, even though accounting is certainly part of the job, there is clearly a focus on managing and investing as compared to auditing how money is used.

Common job titles within investment banking include Financial Analyst, Financial Consultant, Portfolio Manager, Investment Banker, Financial Advisor, Risk Manager, and Credit Analyst, among many others. Each has its own career path; however, in general it takes two years or more to move to a higher-level position, so substantial career progression requires long-term commitment.

Financial Analyst

All financial analysts analyze financial information, however, this position differs greatly by organization and industry. Within a corporation, you may be analyzing the financials of your company and its investments. You could be looking for financial issues, running the numbers for new projects, or simply doing ad hoc reporting and analysis.

If you are a financial analyst within an investment organization, you’ll likely be tasked with examining the financials of outside companies you’re looking to invest in, buy and sell. This requires a broad base of knowledge about different kinds of companies within industries as well as understanding how and why investments are made.

Financial Consultant or Financial Advisor

A financial consultant or advisor generally works with companies or individuals concerning their financial situation. Most consultants or advisors focus on specific offerings to differentiate themselves from others. Potential consulting can be on topics that include taxes, investments and insurance decisions. Personal financial consultants or advisors work closely with clients to offer personalized financial advice, and may direct the buying and selling of stocks and bonds on behalf of clients. Some financial advisors work for large banks but many work in smaller organizations. If a financial consultant works within a consulting firm, he/she often focuses on the financial needs of a specific business or industry, such as hospitals.

Portfolio Manager

A portfolio manager makes investment decisions for an individual’s or business’s portfolio. This professional often has years of prior experience as a financial analyst and knows intimately how to value and choose investments. A portfolio manager often manages investments toward a clearly defined client objective or portfolio focus (i.e., growth, small cap, value, etc.), acceptable level of risk, and desired return goals. A portfolio manager can manage investments for one person, a group of people or for an institution. Institutional roles could include the management of retirement funds, endowments, foundations or some other pool of money.

Investment Banker

An investment banker is in the business of raising money for companies, governments or other entities. The investment banker can work within a financial institution or for a division of a large bank. Investment bankers will be involved with large and potentially complicated financial transactions. They help shape financial deals to raise money for expansion, acquisition, merger or sale of a business. This also includes the initial public offering of a company’s stock, as this is done to raise money for the company to meet its objectives.

Risk Manager

Risk managers monitor and mitigate financial risk within a company. Specifically, they identify and assess threats to the company, put plans in place to combat such threats, and decide how to avoid, reduce and transfer risks from the company. For a finance professional, the focus is on utilizing financial instruments to manage the organization’s exposure to risk, which can include a multitude of exposures, including operational, credit, market, foreign exchange, etc. Various industries utilize risk managers as they are valuable to protect the company’s interests, so jobs for these professionals span the financial, insurance, loss control, legal, and accounting spaces.

Credit Analyst

A credit analyst is responsible for assessing the credit worthiness of a business or person. Usually a credit analyst will work for a commercial or investment bank and be responsible for performing various financial and ratio analyses. Within the scope of investing, a credit analyst will look at potential fixed income investments and analyze whether they are suitable for purchase or sale, depending on the business objectives. These professionals often have a background in accounting, finance, statistics or economics.

1. Get the right degree

You may think you don’t have to possess a degree to get a job in finance, but you’d be wrong. A bachelor’s degree is now the bare minimum requirement for almost any financial job. So, choose your degree and university carefully as some companies or banks limit their hiring to specific universities. Make sure the college or university you choose has a solid business school and strong reputation in the finance industry. Also, if you want to move to a new location, ensure that your university has a large footprint that is recognized in the area you wish to find a job. While science and engineering degrees are popular options, especially outside the U.S., know that you will need to supplement your undergrad degree with further finance-related education. Earning a Master of Business Administration (MBA) is the most common and direct route. An MBA is also fast becoming a basic requirement to land a job on Wall Street.

Popular U.S. Universities for Future Finance Professionals

2. Pursue a specialty

As you can see, finance is a wide-ranging industry and earning a degree targeted toward this area of business presents you with a lot of options. Graduates can find jobs in accounting departments, finance departments, education, sales, banking, financial advising -the list of career options is endless. Most entities need someone with an analytical mind who can read financial data, interpret it and communicate findings and recommendations. During your education, you will have a few years to decide, but ensure you research the types of jobs you find most interesting. You should eventually specialize in one facet of finance as specialization is the best strategy for a long and successful career. This is where earning one or more specialized credentials—such as the Charted Financial Analyst^® (CFA), Charter Market Technician^® (CMT) or Financial Risk Manager (FRM) designations—can truly help you to stand out and advance in your career.

3. Get a job

After you’ve completed your post-secondary education, it’s now time to get a job. Remember it’s not just what you know, it’s also who you know—so put much effort into building and leveraging personal connections by going to conferences, job fairs, educational seminars and other networking events. In order to continue to differentiate yourself, try to gain early career experience through internships. You may think it’s too early to start, but earning a professional credential can be a dramatic help in landing your first few jobs out of college. It may seem like your learning is done when school is, but it’s only beginning. Those who succeed never stop learning.

Employers are now looking for job candidates who have additional credentials that demonstrate they have the prerequisite skills and knowledge necessary for a specialized job in finance. Every university is different in their teaching methods and the materials, so professional credentials are seen as a great way to level the playing the field and ensure candidates have the basic knowledge to do the job on day one.

Chartered Financial Analyst^® (CFA)

Considered the “gold standard” in the investment industry, professionals who pursue the CFA Program charter are generally from the corporate and investment worlds—financial advisers, investment banking analysts, portfolio managers, private bankers, research analysts, and traders. The CFA Program charter is issued by the CFA Institute. For those finance professionals who may decide to pursue a career specializing as a risk manager, financial advisor, or chief executive, the CFA Program charter may be a good option.

The CFA Program exam is offered only on certain dates. Level I is offered twice a year, a single day in June and a single day in December. Level II and Level III are offered only once a year, on the same date in June. The CFA Program exam is a pencil-andpaper exam.

The three levels of the CFA Program exam do not test subject matter separately. Instead, each level of the exam builds on the prior exam and covers many of the same subjects but at broader and deeper levels. Some of the areas covered are ethics, economics, financial statement analysis, equity valuation, fixed income, portfolio management, etc.

You can expect to spend about $3,000 on exam fees for all three levels, which does not include your review materials. The CFA Institute recommends you commit to at least 300 hours of studying for each level of the exam, or 15-20 hours a week for four to six months. You need a bachelor’s degree or four years of professional experience to sit for the exam. You also need four years of experience to become a CFA charterholder.

www.cfainstitute.org

Certified Financial Planner (CFP)

The CFP designation is another highly regarded professional designation. That’s because Certified Financial Planners have completed extensive training and are held to rigorous ethical standards. They typically excel as financial advisors or consultants and/or working in insurance, brokerage houses, or the banking industry. Having a financial background is a great fit, as the knowledge and analytical skills are a must for any advisor.

To obtain the CFP designation, a bachelor’s degree is required as well as three years of professional experience in the financial-planning process, or two years of apprenticeship experience that meets additional requirements. In addition, completion of the CFP Board’s coursework component is required. After successful completion of the education component, the candidate can sit for the CFP exam.

The CFP exam is offered three times a year, each over a five-day period. The CFP exam is offered in two three-hour sessions at Prometric testing centers. The exam fee is around $600, which does not include costs of your coursework or review materials.

www.cfp.net

Financial Risk Management (FRM)

As businesses become increasingly competitive and concerned about managing risk, earning the FRM designation is an excellent way to distinguish yourself and your ability to add value to an organization. Offered by the Global Association of Risk Professionals (GARP), the FRM designation is viewed as the globally recognized standard for risk professionals and signals to employers that you are serious about risk management and that you have had your knowledge validated against international professional standards.

To earn this designation, you must pass two separate FRM exams, and complete a minimum of two years of fulltime work experience in the field of financial risk. Only finance-related vocations are considered as acceptable work experience.

The two FRM exams (Part I and Part II) are computer-based and only offered one day in May and one day in November. You must pass Part II of the exam within four years of passing Part I. The total exam fee is roughly $700 but that does not include the cost of coursework or review materials or annual membership dues.

www.garp.org

Chartered Market Technician (CMT)

The Chartered Market Technician^® (CMT) credential is the preeminent, global designation for practitioners of technical analysis. Administered by the Accreditation Committee of the Market Technicians Association (MTA), Inc., the designation is awarded to those who demonstrate mastery of a core body of knowledge of investment risk in portfolio management settings.

The CMT exam consists of three separate levels and each of the exams is computer-based and administered at Prometric test centers around the world. The Level I and II exams are multiple choice and machine graded, and then the results go through a psychometric review. This process requires candidates to wait approximately four weeks before receiving their final scores.

The total cost for all three levels of the exam approaches $1,500, which doesn’t include the $675 cost of program coursework, annual MTA membership fees or any additional review materials.

www.mta.org

Certification and Licensure Chartered Alternative Investment Analyst (CAIA)

Chartered Alternative Investment Analyst (CAIA) is a professional designation offered by the CAIA Association to investment professionals who specialize in “alternative investments” such as hedge funds, private equity, real assets, commodities, and structured products. The CAIA curriculum is designed to provide finance professionals with a broad base of knowledge in alternative investments.

The CAIA program is divided into two levels and the CAIA Association recommends at least 200 hours of study to pass the exam for each level. Level I focuses on the fundamentals of alternative investment markets, while Level II concentrates on advanced topics in alternative investments. Both levels take a global perspective and incorporate issues of ethics and professional conduct. Candidates can take both levels of the CAIA exam via computer anywhere in the world and at any time.

The total cost for both levels of the exam approaches $2,500, which doesn’t include the $400 cost of program enrollment, annual CAIA membership fees or the cost of any review materials.

www.caia.org

Certified Investment Management Analyst (CIMA)

CIMA professionals integrate a complex body of investment knowledge, ethically contributing to prudent investment decisions by providing objective advice and guidance to individual investors and institutional investors. The CIMA certification program is the only credential designed specifically for financial professionals who want to attain a level of competency as an advanced investment consultant.

The CIMA certification program takes most candidates nine months to a year to complete. Candidates must first pass a background check and pass a two-hour qualifying exam before enrolling in an in-person or online program with a business registered with the IMCA. After completing the course, candidates must then pass a comprehensive four hour qualifying exam.

According to the IMCA, the total cost for certification ranges between $5,000 and $8,000, depending on the options chosen.

www.imca.org

Investment Banking

For a career in investment banking, there are no specialized credentials required (though many expect you to eventually earn the CFA charter to advance), but you will need to have advanced knowledge of financial modeling and valuations.

While some of these concepts are covered in undergraduate or MBA curriculums, it can often be helpful to extend your knowledge and comfort with valuation models by pursuing outside education opportunities.

Internships offer a route into the industry, but competition is fierce and the interview process tough. In addition to acquiring the right technical skills, be sure to think through how you might answer typical behavioral interview questions, and there’s no excuse for not doing your homework on the hiring company and their recent deals and transactions.

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