One of the biggest decisions you will ever make is choosing a career, and the finance industry has a lot of options, good pay, and room for growth. But is a financial job the appropriate fit for you? With the aid of this in-depth guide, you will be able to ascertain whether a career in finance is a good fit for your aspirations and personality as well as the skills and qualifications needed.

Meaning of the Finance

The job search website Indeed describes finance as a field that entails managing money and the acquisition and expenditure of funds by an individual, organization, or government body. Financial actions including budgeting, borrowing, lending, investing, and saving may fall under this category.

Types of Finance Careers

  • Bonds and stocks are two ways that investment bankers assist businesses in raising finance. On mergers and acquisitions, they also offer advice.
  • Experts in corporate finance oversee a company’s financial operations, which include cash flow management, forecasting, and budgetary creation.
  • Investing and managing money on behalf of clients to increase their wealth is the role of asset managers.
  • Risk Management: To safeguard a business’s assets, risk managers recognize, evaluate, and reduce financial risks.
  • To assist strategic decision-making inside a business, financial planning and analysis (FP&A) specialists examine financial data.
  • Professionals in private equity and venture capital make investments in privately held businesses, offering funds and strategic advice to support their expansion.
  • Commercial Banking: Lenders that specialize in business finance offer loans, credit, and treasury services to companies.
  • Insurance: Insurance experts help consumers control risk and guard against monetary losses.

You’re correct if this definition seems sweeping to you. Let us examine it in further detail.

1) Finance is not accounting or economics.

Accounting: This is the career option that is most confusing and closely related to finance. Accounting is the process of documenting financial transactions, whether they are done by controllers, regulators, auditors, oversight agencies, or tax experts. They organize balance sheets and cash flow statements to inform shareholders and decision-makers of both good and bad financial news. They are the organization’s financial scorekeepers. In this field, the CPA (Certified Public Accountant) qualification is the most widely accepted.

Economics: This is the other industry that is commonly confused with finance. It is the field of study that looks at how wealth is produced, used, and transferred. True economists can be found in the public sector, higher education, or think tanks that research and advise economic policy, but graduates with an economics degree can also find employment elsewhere thanks to their analytical and logical thinking abilities.

2) Finance involves two major career paths.

Finance-related professionals are not limited to Wall Street employment. The traditional picture of stockbrokers frantically sprinting across the floor of the NYSE (New York Stock Exchange) building has long since vanished. Numerous roles have been supplanted by technology. Today, finance majors frequently find themselves in the following junior and senior positions:

  • Financial analyst: Evaluates accounting and financial choices made by corporations, banks, insurance providers, and pension funds.
  • Financial planners create financial plans for their private clients, offering advice on debt, investments, insurance, estate planning, and budgeting.
  • An investment analyst evaluates and makes recommendations regarding investments, frequently on behalf of a fund or investment business.
  • A manager in charge of overseeing an organization’s accounting and financial reporting is called a comptroller.
  • Chief financial officer: A senior executive role in charge of an organization’s whole financial operations.
  • The chief executive officer is often the most senior position in a corporation and is in charge of all managerial choices.

The majority of financial occupations are found in either the retail or institutional domains. One of the following options must be selected:

Retail Finance: Dealing with the general population is a common aspect of retail finance. These experts work with small firms and private investors as clients.

The most prestigious title finance experts hold in this field is the certified financial planner (CFP) accreditation. A minimum bachelor’s degree from an accredited college or university is required to become a CFP. You also need to finish a 12- to 18-month CFP board-registered education program, accumulate 6,000 hours of professional financial planning experience, and pass the 170-question CFP exam, which is administered over two three-hour sessions in one day. For those taking the test for the first time, the pass percentage is roughly 67%. Professionals with certain relevant credentials already have access to an expedited path.

Institutional Finance: Working with major organizations like banks, hedge funds, and other commercial companies is referred to as institutional finance in general. In this field, the CFA, or chartered financial analyst, is the most prestigious qualification. Passing a three-part exam covering the principles of investing, asset valuation, portfolio management, and wealth planning is necessary for this.

Skills and Qualifications

Essential Skills

  • Analytical Skills: It’s critical to be able to examine financial patterns and data. Proficiency with Excel and other analytical tools is part of this.
  • Professionals in finance need to pay close attention to detail because even the smallest mistakes can have far-reaching effects.
  • Communication Skills: The capacity to elucidate intricate financial ideas to clients or coworkers who might not be familiar with the field.
  • Problem-Solving Skills: The capacity to create and carry out solutions for monetary difficulties.
  • Mathematical Proficiency: It’s imperative to have a solid grasp of statistics and maths.
  • The capacity to effectively handle several projects and deadlines is known as time management.
  • Technical Proficiency: Working knowledge of financial modeling software, Bloomberg, SQL, and other tools.

Educational Requirements

  • Bachelor’s Degree: Generally speaking, you need a degree in business, accounting, finance, or economics.
  • Professional designations: Earning a designation like Chartered Financial Analyst (CFA), Certified Financial Planner (CFP), or Financial Risk Manager (FRM) can improve your credentials and prospects for employment.
  • Advanced degrees: You can gain a competitive advantage and access to higher-level jobs with a Master of Business Administration (MBA) or a Master of Finance or Economics degree.

Which is better for you: retail finance or institutional finance?

Using a personality test is a useful method to determine which of these routes is best for you. Retail finance is likely to be a more successful career for a “people person” who enjoys dealing with the public, customer service, business development, or sales. A career in institutional finance would likely be preferred by a financial professional who would rather deal with other financial experts rather than the general public, analyze portfolios and investment possibilities, and work behind a computer.

A person with an entrepreneurial spirit could also value the opportunities for career advancement that come with working as a financial counselor or in retail finance. Institutional finance would be preferred by someone who would feel more at ease in a salaried role and eventually aspire to become an executive.

Here are a few more things you should ask yourself before choosing a direction.

1) Where do you want to work?

Working remotely is possible in retail finance thanks to its flexibility. Everywhere, from big cities to suburbs and rural locations, there are financial counselors available. Keep in mind that retail finance refers to working with the general population, thus there is always a consumer base wherever people live. There has been greater flexibility in the work locations available to finance professionals since the coronavirus pandemic and the rise of remote working. For example, I often work four days a week from my home office, thirty minutes from my office, and one day in my office, even though my clientele is nationwide.

A lot of the time, institutional finance suggests that you work for a big organization. For Fortune 500 corporations, these positions are typically found in large cities. Beginning employees in institutional finance should anticipate that they will almost always need to be in the office, even with the rise of remote working.

2) Do you like working by yourself or on a team?

Working with new clients daily, frequently by yourself, is what retail finance positions like independent financial advisors might entail. Even small teams or groups of partners in wealth management businesses typically operate in entrepreneurial settings where advisers are expected to acquire and hold onto clients on their own.

Working in institutional finance typically entails being a team member of a department that is a subset of a bigger department, which implies that hierarchies are more prevalent. Junior associates might answer to senior colleagues who work with a certain group of regular customers and interact with executives more frequently. Only a job move or promotion inside the organization may result in a change of scenery.

3) How long do you want to stay in school?

Bachelor’s, master’s, and even doctorate degrees are all possible for professionals in the banking industry. Retail bankers are more likely to have a bachelor’s degree before going after the insurance and investment licenses or designations that are required for their line of work and target market.

To advance in institutional finance, one may need a master’s degree, and a PhD for positions in academia or think tanks.

4) Do you want a steady income with a lower ceiling or a volatile income with no ceiling?

A financial job can be extremely profitable. A finance major typically makes $101,038 per year. If you want to work in financial sales or as an advisor, you can go far over this figure, but if you work in corporate America or the government, you’re usually pretty near.

During my college interview for a financial adviser internship, I was informed that, “If you do it right, you can be overpaid and underworked for the next 30 years,” but that the first three years of my career would be extremely demanding and underpaid. What many small business owners and entrepreneurs may encounter is not all that dissimilar from this explanation. On the other hand, employment in institutional finance, such as banks or major corporations, may provide a steady and comfortable wage, but it also creates a feeling of job security and limited professional advancement opportunities.

As a last mental exercise, I frequently advise recent graduates and those considering a career shift to consider “the three I’s”: impact, independence, and income. All three are essential for a successful profession, even if each person may prioritize and define them differently.

An executive praising them for creating a budget for a new product line, or a client writing a personal note to express gratitude for helping their family pay for college or retirement, can both have an impact on a financial professional. Working from home, penning a financial article, or visiting corporate clients across the globe are all potential paths to independence. In conclusion, a career in finance has the potential to be extremely lucrative depending on the position.

Think about your priorities when you evaluate this field and these two options. And never forget: A finance job involves more than simply arithmetic.

Conclusion:

Financial and intellectual rewards are possible from a job in finance, but there are drawbacks as well. Strong numerical skills, critical thinking, and a dedication to lifelong learning are necessary. You may decide if a career in finance is suited for you by carefully evaluating your interests, abilities, and professional objectives as well as by getting real-world experience and advice from experts in the field.

Final Thoughts

  • Keep Up with the News: The finance sector is ever-changing and dynamic. It’s critical to keep up with changes and trends in the sector.
  • Adaptability: For long-term success, the capacity to adjust to shifts in the market and regulatory landscape is essential.
  • Ethics: Upholding the highest moral standards is essential. Integrity and trustworthiness are essential for a successful finance job.
  • Lifelong Learning: The finance sector places a high importance on ongoing education and career advancement. Obtaining further training and degrees can lead to new opportunities.