Finance industry has witnessed exponential growth in the past two decades and a number of specialized fields have appeared within the broader domain of finance. This has also led to mushrooming of a number of new career roles aimed at providing certain specialized services to individuals or institutional clients.
Today, Investment Banking, Risk Management, Investment Management, Commercial Banking, Equity Research and a number of other areas of special interest in finance require people with expert knowledge and a certain skill set to fill in the shoes. This trend of continuing focus on expertise in specific functional areas of finance has made it that much more difficult to make a choice of career. Here we would attempt to provide an overview of some of the most popular career roles in finance and what it takes to be successful at them.
Finance Career Options
Investment bankers usually facilitate brokering of major transactions for large institutional clients including Mergers & Acquisitions (M&As), underwriting for equities or debt securities to raise major capital and corporate restructuring among other things. It is one of the most preferred career choices in finance for the kind of recognition accorded and rewards earned in terms of big pay packages and bonuses. It is an intensely competitive field requiring a combination of financial expertise, excellent negotiation skills and a high level of confidence.
Most of the large investment banks prefer to hire top MBAs with the desired skill set. With 75 to 100 work hours a week, it is considered among the poorer choices in terms of work-life balance. However, working with a large firm in one of the financial hubs including New York or London, remuneration and growth prospects would easily be among the best.
Investment Management or Asset Management
Asset managers help manage the wealth of High Net-Worth Individuals (HNIs) and institutional clients. They identify suitable avenues of investment for their clients to help realize their wealth creation goals and develop and implement long-term investment strategies to achieve the same. Perks are among the best in the industry as the demand for skilled asset managers continue to rise and work hours are much better, making possible a good work-life balance. Professionals with CFA (Chartered Financial Analyst) or CIMA (Certified Investment Management Analyst) could be best fit for the role.
Commercial banks offer a host of retail banking services to businesses as well as individuals including checking and savings accounts, issue debit or credit cards along with a line of credit depending on creditworthiness of the client. Some of the most popular roles in commercial banking sector include loan officer, trust officer, mortgage banker, bank teller and branch manager among others. Usually, different skill sets might be required in keeping with the nature of specific role. Growth prospects are good in commercial banking with moderately good to decent pay packages for professionals in higher or more technical positions. Work hours are usually among the best, especially with public sector banks.
Equity research basically involves comprehensive analysis of stocks including financial modeling and valuation to help decide the worth of a certain investment. The work of an equity research analyst helps individuals as well as institutional investors make critical investment decisions. This is one of the most valued career roles in finance which requires insightful knowledge of financial concepts, a good amount of patience and high level of ethics to be able to carry out professional responsibilities as desired. Perks are undoubtedly among the best and work hours are good enough to maintain a healthy work-life balance.
This field is primarily concerned with management of all financial activities of a company. This is much broader in scope than investment banking, which represents only a sub-domain of corporate finance. It not only deals with raising major capital through M&As but also actively engages with every form of decision making related to investment, capital management and other activities which help maximise the strategic growth of an organisation. Corporate finance professionals could have widely differing work roles and hence the required skills sets would also vary. Some of the common openings include financial analyst, tax manager, treasurer and chief financial officer (CFO) among others. CPA (Chartered Public Accountant) could be a useful designation for accounting-related roles and CFA (Chartered Financial Analyst) could be of advantage for aspiring financial analysts.
This has emerged as one of the key areas of interest which involve identifying and managing different forms of financial risks. A risk management professional could be engaged in broad-based financial risk analysis in different scenarios or could be working on financial risk modeling, predictive financial analysis and other technical aspects of financial risk management. The remuneration is among the industry’s best and work hours are usually decent. FRM (Financial Risk Manager) and PRM (Professional Risk Manager) are two of the definitive financial risk management certifications which could be of great advantage to risk management professionals.
Relevant Courses & Professional Certifications
Over the years finance careers have become increasingly competitive, driving up the level of expectations on part of employers. Individuals with better skill set, academics and relevant credentials for a specific role have a distinct advantage over others. Those with higher technical skills or holding a certification in a specialized area of knowledge can enjoy much better career prospects in modern financial industry. Here, we would discuss some of the leading certifications which can help enhance specialized skills and boost career prospects in finance.
CFA (Chartered Financial Analyst)
It is one of the most sought after credentials for finance professionals offered by CFA (Chartered Financial Analysts) Institute. It is a comprehensive 3-tier certification CFA program aimed at imparting in-depth knowledge of investment management and principles of financial analysis. On completing the certification program, one can earn highly sought-after CFA Charter Holder designation.
Some of the knowledge areas covered as part of CFA include portfolio management, corporate finance and equity investments. Often, investment bankers, asset managers, equity research analysts, portfolio managers and other investment professionals. To qualify for CFA certification program, high level of academics and good work experience is required.
FRM (Financial Risk Manager)
This FRM designation is offered by Global Association of Risk Professionals (GARP) for risk management professionals. It offers broad-based knowledge of risk management practices and principles which play a key role in risk assessment and mitigation in different areas.
This globally valued credential can help prepare professionals for roles akin to Risk Assessments Manager and Head of Treasury Department. There are no educational requirements to be eligible for this certification, however, a minimum of 2 years of work experience in portfolio management, risk consulting, risk technology or other related areas.
MBA in Finance
MBA with a specialization in finance can be a great way to prepare for a career in finance, building on management as well as finance and mathematical skills acquired in this program.
Typically, any MBA in finance course covers portfolio management, corporate finance, corporate investment management and hedge fund management along with an overview of how financial markets work. It can lay down a solid foundation for building a career in accounting, corporate finance, banking, financial planning and other related areas. Most of the investment banking firms prefer to hire top MBA’s for the kind of networking opportunities afforded to them.
In short, it is a highly competitive course which offers a fair degree of advantage to aspiring finance professionals. However, one must remember that a lot of youngsters are opting for MBA due to its popularity, which has diminished its significance to an extent but if earned from one of the top institutes, it still holds an edge over others. As a prerequisite, one should have strong mathematical, communication and management skills along with two years of work experience.
CPA (Chartered Public Accountant)
CPA exam is considered the “black belt” of accounting and emerges as the perfect choice for advancing one’s career in accounting, auditing or tax management role. This designation is offered by AICPA (American Institute of CPA’s) with a focus on accounting and auditing practices and n earning CPA license one could work as a public accountant and usually, CPA’s earn 10-15% more than that others working in similar roles without the designation. One can develop a career in financial accounting and reporting, management accounting, cash management or other areas and some of the roles for which CPA prepares an individual includes those of Management Accountant, Internal Auditor and Government Accountant among others. Some of the prerequisites for this designation include a bachelor’s degree along with 120 semester hours, with 24 to 30 hours in accounting. Usually, 1-2 years of work experience with a CPA is also required.
CIMA exam is a organized by by Chartered Institute of Management Accountants, UK to those interested in acquiring detailed knowledge of management accountancy. It is one of the most comprehensive certifications on accounting which essentially widens the scope of accounting by attempting to align it with strategic and risk management, resulting in an insightful approach to business management.
It is a comprehensive 4-tier certification program divided into certificate and professionals levels. One can earn CIMA Certificate in Business Accounting by completing the basic level and qualify for professional level studies which are further divided into three learning pillars including enterprise, performance and financial knowledge areas. Each of these pillars is further sub-divided into operational, management and strategic levels, resulting a total of nine knowledge areas covered as part of professional studies. It is this unique learning structure of CIMA program which sets it apart from most other certifications and on completing each professional level, one would earn a specialised Diploma in Management Accounting.
On completing the strategic level, 3-year work experienced verified by CIMA Institute would help earn the designation of CIMA Member. This certification can help build a career in advanced management accounting including career roles of Management Accountant, Financial Analyst, Finance Manager and Internal Audit Manager among others.
CFP (Certified Financial Planner)
CFP certifications is one of the few certifications focused on preparing financial advisors to help individual clients with their investment decisions. This course adopts an extremely practical approach and methodical outlook on developing and implementing financial plans for investors. As a prerequisite, one must have completed a prescribed course of study in one of the relevant financial planning areas which takes about nine months to complete. Usually, these courses are conducted by college on college campuses. Apart from that a bachelor’s degree in any discipline and 3 years of work experience related to financial planning are required. Some of the knowledge areas covered in this course include investment, insurance and estate planning, risk management and tax and retirement planning among others.
CA (Chartered Accountant)
CA examinations are organized by by ICAI (Institute of Chartered Accountants of India), which can help build a high-profile career in taxation, auditing or accounting. CAs can work with large organisations in varying roles associated with financial auditing, management consultancy, tax compliance and corporate finance among other areas. CA has the power to legally represent his employer or clients in matters of legal nature. Additionally, on earning this designation, one can also practice as an independent professional. It is a very comprehensive credential which takes a minimum of 4 years to complete and due to intensely competitive exams, success rate is very low as well. However, on earning the designation of CA, one can explore a number of career roles related to finance, accounting, auditing and tax management as compared to most other certifications.
It would be wise to chalk out a career plan before opting for any of these certifications instead of doing it the other way round. Depending on the academics and professionals work experience, a suitable finance certification can be chosen to acquire or enhance a certain skill set for a specialized role to build a great career in finance. It is always best to plan and prepare for a more specialized career role which can potentially lead to higher career growth. However, the choice should be based on a balancing of relevant factors to be able to successfully align one’s skill set, areas of professional interest and career goals.