Why Work in Finance? What to Consider Before Starting. There is a high demand for those with analytical skills and meticulous attention to detail in the financial sector. While many jobs in this industry still include making investments and economic predictions for companies and clients, there are many more opportunities outside of trading on the stock exchange.
With the growing convergence of the financial and technological spheres, experts in both fields can help people and businesses get the most out of their investments. This resource answers commonly asked questions (FAQs), provides income data for finance positions, and examines the field of finance to see if it is a desirable career path.
The Benefits of Working in Finance
Earning a degree in finance can provide doors to stable, well-paying careers with room to grow and reliable demand predictions. Some people find that finance careers offer them freedom, such as the option to work remotely or in a hybrid setting. Between 2022 and 2032, there will be an average of 911,400 job openings per year in the business and finance sector, according to the U.S. Bureau of Labor Statistics (BLS). Financial examiners and other similar positions are predicted to have job growth that is more than six times faster than the national average.
Those working in finance also tend to make more than the average salary. The median yearly income for all occupations in the United States was $95,390 in 2022, according to BLS statistics, while personal financial counsellors made almost $95,390. A typical yearly compensation of $96,220 was earned by financial analysts, who are among the most common occupations in the finance industry. According to the BLS, business and financial occupations generally pay relatively well. The typical yearly income for these experts was $76,850, approximately $30,000 higher than the national median earnings.
Professionals in finance can keep up with the ever-changing industry thanks to innovative advancements at the fintech junction. The necessity for individuals with the necessary expertise to evaluate investment opportunities will persist in fueling the demand for professions in finance. Professionals in the financial sector can take on greater responsibility and earn higher salaries by advancing to more senior positions within the industry. Careers in finance include positions such as senior economic analyst, chief financial officer, or portfolio manager, depending on the individual’s level of education, work experience, or certification in the field.
Careers in Finance
Experts in financial matters can find employment in various institutions, from banks and credit unions to private companies and even public agencies. Earning potential is high for most positions in the field.
The average incomes provided here do not necessarily indicate the whole picture. Location, experience, responsibilities, and the organization’s size are some variables that might affect finance compensation. Furthermore, a large portion of the income for many experts in this area is contingent upon the success of their employers or clients. In the financial industry, a high-performing individual might expect a yearly salary of over $150,000 in a managerial position and even more in an executive capacity.
Corporate Financial Analyst
Financial experts fill multiple functions in many companies. The roles of budget analyst, treasury analyst, and business development analyst are among the most prevalent.
Budget analysts prepare and evaluate annual budgets and reports on financial performance, also called financial planning and analysis (FP&A) analysts. Executives and senior leadership rely on this analysis to back their decisions. Economic performance and analysis (FP&A) experts may assess problems with financial performance and provide solutions after identifying important drivers affecting profitability.
Analyzing cash flows and financial risk, determining both immediate and future cash demands, and developing plans to make the most efficient use of cash are all responsibilities of treasury analysts. In addition to overseeing a company’s financial relationships, treasury analysts can monitor and report on stock issues. New company prospects, including possible mergers or acquisitions, might be financially analyzed with the help of business development experts.
Many responsibilities within corporate finance support a corporation’s financial success. A career as chief financial officer is within reach for those who have excelled in various corporate finance positions.
Investment Banking Analyst
For both individuals and companies, these analysts assess financial data. Their job is to find ways to increase profits by studying economic and business trends, analyzing financial data, and suggesting investments. Investment bank analysts play two leading roles: buy-side and sell-side. Companies can benefit from the expertise of buy-side analysts when they invest in mutual funds, pensions, and hedge funds. Based on the client’s objectives and intentions for the future, they evaluate their investment choices or portfolios.
After extensive study on companies and investments within particular industries, sell-side analysts prepare financial projections for prospective investors. Financial experts frequently combine investment predictions, developed by communication with industry players, into a consensus estimate. A financial analyst’s responsibilities include managing a fund or portfolio, analyzing securities, and assessing financial risk.
Underwriters and Loan Officers
Underwriters and loan officers with backgrounds in finance are in high demand by many financial institutions, including banks, credit unions, and insurance firms. Loan officers assess clients’ economic stability and guide loan repayment plans. They typically work for financial institutions like credit unions and commercial banks.
The term “underwriter” describes someone who reviews applications for loans, investments, insurance, and mortgages from individuals and businesses. Depending on the sector, underwriters may be responsible for assessing the level of risk associated with a loan application or insurance policy and deciding on acceptance or rejection.
Financial Analyst (Commercial Banking / Insurance)
People with degrees in finance are in high demand for a wide range of banking and insurance positions at commercial banks. Commercial bank customers have access to various financial products and services, including savings accounts and loans. To maximize profits and satisfy customers, bankers closely monitor the central bank’s interest rate and monetary policies and adapt their strategies and products accordingly.
Credit analysts, mortgage underwriters, compliance analysts, and risk management analysts are typical finance roles in commercial banking. Credit analysts evaluate people or organizations applying for loans’ creditworthiness and financial stability. Mortgage underwriters examine home mortgage applications to verify the applicant’s financial soundness and ensure they fulfil all application criteria. Risk management experts look at the bank’s solvency or liquidity. As a whole, it is important to ensure it stays within its risk appetite. To guarantee that all banking operations adhere to regulatory standards, compliance analysts aid with monitoring transactions and evaluating compliance measures.
Personal Financial Planner or Advisor
Individuals and families can meet with a personal financial planner who can help them with their economic situation and aspirations. These experts can help you with everything about money, including tax preparation, estate planning, investing, and mortgages.
These experts are sought after by families during significant life transitions, including retirement, marriage, and college. For immediate and distant objectives, financial planners assist clients in weighing the potential benefits and drawbacks of various investment options. Customers get recommendations on how to increase profits. Stocks, bonds, and annuities are among the investment options available to financial planner clients.
Tax preparation, insurance selection, and personal budgeting are other services that financial planners offer. These experts keep tabs on their accounts and adjust as needed to determine if clients are on pace to achieve their financial objectives.
Financial Examiner
Financial examiners monitor banks and other financial organizations to prevent consumers and borrowers from falling victim to predatory lending practices and unforeseen losses. These individuals usually work in consumer compliance or risk assessment, two of the most sought-after fields in finance.
Consumer compliance is the process through which financial examiners guarantee borrowers that their lenders are subject to stringent regulations. This prevents financial organizations from providing loans to borrowers with excessively high interest rates that they cannot repay. To prevent banks from engaging in discriminatory practices based on handicap, race, sex, or ethnicity, these experts also monitor lending practices. To ensure financial system stability, risk assessment examiners look at the revenue and expenditures of financial institutions. They also prepare and deliver reports regarding the general fiscal health of financial institutions.
Financial Auditor
Accuracy, policy compliance, and other reporting requirements are validated through the evaluation of an organization’s financial information and accounting systems by financial auditors. The effectiveness of the company’s internal control procedures regarding critical accounting and financial operations is another area that financial auditors guarantee to upper management and the audit committee. Internal and external auditors are two typical jobs in financial auditing.
Companies, NGOs, and even the state are all potential employers for internal auditors. Critical financial operations, including payroll, accounts payable, and procurement cycles. They are frequently audited with the help of internal auditors who have experience in finance. These experts evaluate the business’s procedures to find problems with the internal controls that might prevent or detect fraud, mistakes, or other issues. They report audit results to the board and management.
Public accounting firms employ external auditors to check the accuracy of financial statements. Audit committees, regulators, and investors may receive reports detailing their findings and conclusions. Accounting courses like those offered by the United States General Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS) can help finance professionals working as external auditors build a stronger foundation in accounting theory and practice.
