Career Options in the Financial Industry

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The U.S. financial markets are unrivaled in terms of size and liquidity. Finance and insurance accounted for 7.2% of total U.S. Gross Domestic Product and employed roughly 6 million Americans in 2014.1 And that’s just in the U.S. – as more and more firms have overseas subsidiaries, the globalization of business presents amazing opportunities. There are a variety of financial career options available to aspiring professionals with the right skills and credentials, such as:

Financial Advisor

Financial advisors, (also known as financial planners or stock brokers) are licensed to manage the investments and offer investment advice to their clients. Clients range from widowed retirees and twenty-something’s just starting to invest. Each one of these clients has different investment goals and financial advisors must develop strategies that monitor risk, tax implications. Depending on the amount of licenses and/or educational background, financial planners execute transactions for their clients, sell other investment products such as insurance products and manage (take custody) of their assets. Sometimes they simply offer advisory services. An increasing trend for financial advisors, usually after some experience, is going independent as a Registered Independent Advisor (RIA). There is often more money and less hassle.

Most financial advisors compensation come from a wrap fee tied to total assets under management but there are also ancillary revenue streams such as commissions on different investment products, portfolio lending and other fees. Advisors must adhere to the clients risk tolerances and avoid conflicts of interest the best they can.

Median annual compensation for financial advisors is about $90,000 with some making less and some making many multiples of that.2 Given the positive demographics and attractive compensation, there is strong forecasted demand for brokers which are expected to grow 30% over the next few years.3

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Insurance Broker

With the low interest rate environment of recent years and a large generation of Americans approaching retirement, the demand for various insurance products has been strong. The products are designed to protect families against catastrophic events including death, fire and floods but also to endure a stream of income in retirement.

Insurance brokers (also referred to as insurance agents) are licensed to sell insurance products to a variety of customers, including individuals as well as businesses. Sometimes, their products overlap with financial advisors and they can sell certain types of each. People need insurance products for almost every stage of their lives; auto, health and homeowners insurance are required so the strong demand isn’t expected to slow.

Average annual income for insurance brokers is $70,000 4 but increases to $87,000 for independent insurance agents.5 The main difference is ‘brokers’ sell products from one particular insurer while the more independent ‘agent’ sells products from several different insurers.

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Banker

Bankers (sometimes called retail bankers, private bankers or commercial bankers) provide a variety of services to individuals and small businesses ranging from basic banking services such as deposits and checking accounts to mortgages and merchant services. Private bankers rely more on walk-in traffic to the branch.

Investment Bankers essentially raise money for companies or provide advice on specific transactions. Traditional and commercial banks service individuals and small businesses while investment banks advise on transactions for larger corporations. The job involves plenty of networking to be successful.

Bankers in a branch office make a lot less than you might expect, despite the prestigious title of banker. Personal or retail bankers (that you might encounter in your bank’s local branch), have median pay of just $35,613.6 Banking is a margin business so they do not overpay for these services. One bright spot are the hours, typically 9-4.  Not surprisingly, personal bankers typically don’t remain in these positions long-term; they usually transition to either financial advisor or branch manager.

On the other hand, investment bankers enjoy an average salary of $100,000, but their employment is more cyclical and lower-level employees often endure 60-90 hour work weeks.7

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Accountant

Ever-changing tax laws and a code that is over 70,000 pages long should provide accountants plenty of work in the future.8 Given the slew of regulations facing companies today, and the strong penalties for transgressions, accounting is one area in finance seeing strong demand.

Accountants prepare, file and examine financial statements and taxes for clients. Individuals (often wealthy) require the services of accountants when dealing with more complicated accounting. There are significant academic requirements to become an accountant but you can work in the field of accounting with a bachelor’s degree. Continuing forward with a Master’s degree is a popular option as many degree programs are designed to help students prepare for the CPA (Certified Public Accountant) exam as part of the curriculum.

But the rigorous training for accountants pays off. The median income for an accountant is $65,080 but accountants with Master’s degrees and/or CPAs earn substantially more.9 Another benefit is added job security since accountants have a very low unemployment rate of 3.6%.10

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Forensic Accountant

Forensic accounting is a specialized type of accounting with the goal of detecting, stopping and deterring fraud. This is an exciting career path where special agents or investigators track cyber criminals, organized crime, money launderers, white collar criminals and embezzlers. Sometimes this is done from afar analyzing financial record and sometimes this is done intuitively through interview and interrogation techniques. Auditors try and find evidence of accounting fraud before there’s the potential to wipe out all stakeholders, as in the case of Enron or WorldCom.

Many financial service companies are willing to pay for these risk management professionals since 45% of them are victims of economic crime.11 The median pay for a forensic accountant is $74,624.12 Many fraud investigators go on to earn the Certified Fraud Examiner (CFE) designation. Some Master’s programs curriculum prepares students for the exam which bumps pay up to $90,634.13

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Financial Analyst

The term financial analyst can apply to several different job descriptions. Some work in the corporate finance department and examining capital budgets and operating efficiency. Others analyze securities for a brokerage or a buy-side fund. Equity analysts rate stocks and credit analysts rate the debt of corporations or governments. They are well paid, with the median compensation of $76,950 according to the BLS.14 Analysts working for Wall Street, a hedge fund or private equity firm can make much more. For example, the average pay for professionals in the hedge fund industry is $409,826.15

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Economist

Economists use economic data and variables to forecast trends that affect various entities. These parties could be taxpayers, shareholders, the community or even a rogue nation. Economists often work either in the public sector for government or organizations like the Federal Reserve Bank or International Monetary Fund. Banks also employ economists to try and forecast interest rate moves while consumer products companies rely on economists to forecast trends that will translate into sales.

Like accounting, economics requires significant academic credentials, typically a Master’s degree at least. Economists enjoy high median annual pay at $91,860.16

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Trader

Traders buy and sell items for profit. ‘Buy low and sell high’ is the old adage. These professionals trade everything from stocks and bonds to gold and cocoa. They often have a set amount of money they can trade for their book and sometimes use leverage to make bigger bets on anticipated price movements.

If you’re looking for job security or a stress-free work environment, think twice about becoming a trader. Traders can have one bad year and be fired. On the other hand, profitable traders get reputations around ‘The Street’ quickly and are often courted by other shops that try and lure them away with incentives such as signing bonuses. The national average compensation for traders is $91,730 according to Glassdoor but depending on how your firm does for the year, can be much more.17

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Financial Operations

Operations professionals are the behind the scenes employees that make a financial firm run smoothly. They handle the administrative work for accounts, locate stocks for short-selling, ensure payments between parties, settle trades, extend and retract margin loans and monitor activity to meet regulatory compliance. If it sounds mundane it’s because it can be.

An experienced operations professional is extremely important to a firm, yet they experience mediocre pay with the average of $66,883.18 While there is better than average job security, upward mobility is typically limited.

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