Table of Contents Hide
- What is “Finance,” and What is a “Good Career”?
- Is Finance a Good Career Path? Benefits
- Is Finance a Good Career Path? Drawbacks
- Is Finance a Good Career Path? Top Finance Job Opportunities
- Finance Examiner
- What Degree Do I Require for the Job I Want?
- Is Finance a Good Career Path? Salaries
- Is Finance a Long-Term Stable Career Path?
- Where Do Finance Professionals Work?
- 8 Essential Skills for a Finance Career
- So, What Does All of This Mean for You? Is Finance a Good Career Path?
- Is Finance a Good Career Path? Related Articles
- Is Finance a Good Career Path? References
Individuals with analytical minds and strong attention to detail make excellent candidates for in-demand finance careers. Beyond trading on the stock exchange, many positions in this field include financial forecasting and investments for businesses and clients. But as the finance and technology worlds merge more, professionals in these fields can maximize investment returns for individuals and organizations. This guide investigates whether finance is a viable career path, including salary information for finance jobs, projected employment growth rates, and frequently asked questions.
What is “Finance,” and What is a “Good Career”?
“Finance” can refer to a variety of jobs, including corporate finance at large corporations, credit analysis, commercial or corporate banking, private wealth management, investment banking, private equity, equity research, hedge funds, venture capital, and even roles in the middle office such as commercial real estate and risk management.
A “good career” is more difficult to define, but let’s say it’s one in which the benefits significantly outweigh the costs or cons, and the benefit vs. cost profile remains favorable for the next 10-20 years.
- The term “benefits” can refer to high pay, good exit opportunities, networking potential, skill set development, or the rewarding nature of the work itself.
- “Costs” refer to the difficulty and time/effort required to find and advance in a job.
Most people have traditionally considered finance careers to be high-risk, high-reward.
It’s extremely difficult to break in, but once you do, the pay and exit options make the initial effort worthwhile.
Yes, it is difficult to advance, but the rapid increase in compensation as you advance more than compensates for that difficulty.
Top performers can earn $1 million or more per year, and even if you “get stuck,” your company does poorly, or you end up in a bad group/role, you can still earn in the mid-six-figure range.
Yes, these figures are (much) lower outside of the United States, but no matter where you live, you could earn multiples of your country’s median household income.
Is Finance a Good Career Path? Benefits
Finance degree jobs can offer relatively high pay, stability, advancement opportunities, and consistent demand projections. Finance careers may also provide employees with flexibility by allowing them to work remotely or in hybrid environments.
According to the U.S. Bureau of Labor Statistics (BLS), employment in business and finance will grow by 7% from 2021 to 2031, slightly faster than the average projected growth for all U.S. occupations. Certain financial roles, such as financial examiner, are expected to grow at a rate more than double the national average.
Finance professionals also earn higher-than-average pay. According to BLS data, personal financial advisors earned a median annual salary of nearly $95,000 in 2021, which was more than double the median annual salary for all occupations nationwide. Financial analysts, one of the most common finance jobs, earned a median annual salary of $95,570.
In fact, the BLS reported that overall pay for business and financial occupations was relatively high. These professionals earned a median annual salary of $76,570, nearly $31,000 more than the national average for all jobs.
Innovative developments at the intersection of finance and technology (fintech) enable finance professionals to stay current in an ever-changing field. The demand for knowledgeable workers to evaluate investment opportunities will continue to drive demand for finance careers.
Finance professionals can also advance in their careers to take on more responsibilities and earn more money. Professionals with more education, experience, or certification in specific areas of finance can work as portfolio managers, chief financial executives, and senior financial analysts.
Is Finance a Good Career Path? Drawbacks
Of course, no career is perfect, and working in finance has some drawbacks. To begin with, financial jobs can be extremely stressful. Working as a financial analyst or manager entails making critical decisions that can significantly impact your company’s bottom line. That kind of pressure can be difficult to deal with on a daily basis.
Another disadvantage is that finance can be time-consuming. When you work long hours crunching numbers and preparing reports, you may have little time for your personal life. If you choose that career path, it is critical to maintain a healthy work-life balance.
It is important to note that the world of finance is constantly changing. You must always stay current on changes in tax codes and regulations so that you can advise your clients accordingly. You must also be prepared for unexpected economic downturns; they occur occasionally and can have serious consequences for businesses and individuals.
Is Finance a Good Career Path? Top Finance Job Opportunities
Now let’s analyze some of the top opportunities in the finance industry.
Corporate Financial Analyst
Annual Salary: Approximately $69,000
Finance professionals are employed in a variety of roles by many corporations. FP&A (Financial Planning & Analysis) analysts, treasury analysts, and business development analysts are three of the more common positions.
Analysts in finance and accounting prepare and evaluate annual budgets and other financial performance reports. The analysis performed aids in the decision-making process of the company’s executives and senior leadership. FP&A analysts frequently identify key drivers influencing profitability and may make recommendations to improve financial performance.
Treasury analysts assist with cash flow and financial risk analyses. This position will assess the company’s short- and long-term cash requirements and devise cash management strategies to optimize cash use. Treasury analysts may also be in charge of managing a corporation’s various banking relationships and assisting with the tracking and reporting of corporate stock issuance.
Financial analysis of new business opportunities, such as potential mergers or acquisitions, is supported by business development analysts.
Many corporate finance roles collaborate, all with the goal of assisting the corporation’s financial success. Achievement in a variety of Corporate Finance roles may eventually lead to a position as a corporation’s Chief Financial Officer (CFO).
Investment Banking Analyst
Annual Salary: Approximately $78,000
These analysts evaluate financial data for individuals and businesses. They conduct economic and business research, analyze financial statements, and make investment recommendations to maximize profits.
Analysts in investment banking typically work as either buy-side or sell-side analysts. Buy-side analysts assist companies in acquiring investments through mutual funds, pension funds, and hedge funds in order to earn a return. They evaluate each client’s investment portfolio based on the client’s long-term plans and goals.
Sell-side analysts conduct research on stocks and investments in specific industries in order to generate financial forecasts for potential investors. They collaborate with industry stakeholders to develop investment projections, which financial professionals then aggregate into a consensus estimate.
Fund manager, portfolio manager, securities analyst, and financial risk specialist are some of the other finance degree jobs available.
Financial Analyst (Commercial Banking / Insurance)
Annual Salary: Approximately $69,000
Many commercial banks hire people with finance backgrounds for a variety of banking and insurance positions. Customers of commercial banks can obtain financial instruments such as savings deposits and loans. Bankers closely monitor the central bank’s interest rate and monetary policies, and they adjust their strategies and product offerings to best meet customer needs and ensure the bank’s financial success.
Credit analysts, mortgage underwriters, risk management analysts, and compliance analysts are other common finance positions in commercial banking. Credit analysts evaluate an individual’s or entity’s creditworthiness and financial stability when they apply for a loan. Mortgage underwriters evaluate home mortgage applications to ensure that the customer’s financial stability and application requirements are met.
Risk management analysts assess the bank’s overall solvency or liquidity, ensuring that operations are carried out within a defined risk appetite. Compliance analysts assist with transactional monitoring and compliance control assessments to ensure that banking activities are carried out in accordance with regulatory requirements.
Personal Financial Planner or Advisor
Annual Median Salary: $94,170
Personal financial planners meet with individuals and families to provide financial advice and evaluate financial goals. These professionals provide advice on taxes, estate planning, investments, mortgages, and other financial issues.
Families seek out these professionals during significant life events such as retirement, marriage, and pursuing higher education. Financial planners assist individuals in assessing the risk associated with investments in order to meet short-term and long-term objectives. Clients are advised on how to maximize their returns. Financial planners can invest for their clients in stocks, bonds, and annuities.
Financial planners also help clients with tax preparation, insurance purchases, and personal budgeting. These professionals monitor people’s accounts to see if they are on track to meet their financial goals and make changes as needed.
Annual Median Salary: $81,410
Financial examiners monitor banks and financial institutions to ensure that customers and borrowers are not subjected to unexpected losses or predatory lending practices. These professionals typically work in either consumer compliance or risk assessment as one of the most in-demand careers in finance.
Financial examiners in consumer compliance assure customers that their lenders are held to high standards. This prevents institutions from making loans with unreasonably high interest rates that borrowers are unable to repay. These professionals also monitor lending practices to prevent banks from discriminating on the basis of ethnicity, race, gender, or disability.
Risk assessors examine banks and institutions’ income and expenses to ensure the stability of the entire financial system. They also create and present reports on the overall fiscal health of financial institutions.
The average annual salary is $77,250.
Financial auditors evaluate organizations’ financial information and accounting processes to ensure data accuracy, policy compliance, and other reporting requirements.They assure the audit committee about the organization’s internal control activities within key financial and accounting processes. Internal auditors and external auditors are two common job roles for financial auditors.
Companies, non-profits, and the government can all hire internal auditors. Internal auditors with a finance background are frequently sought after to assist with audits of critical financial processes such as payroll, accounts payable, and procurement cycles. These professionals assess company processes to identify any weaknesses in internal controls that would prevent or detect fraud, errors, or other issues. Audit findings are presented to management and the board of directors, and they should be tracked to ensure that appropriate corrective actions are taken.
Public accounting firms hire external auditors to conduct financial statement audits. They present their findings or opinions to the audit committee, as well as to regulators and investors, as confirmation that the financial statements are reliable. Finance professionals interested in a career in external auditing should supplement their education with additional accounting courses to better understand relevant accounting principles such as US GAAP and IFRS.
What Degree Do I Require for the Job I Want?
A bachelor’s degree in business, accounting, finance, or a related field is typically required to pursue an entry-level career in finance. Master’s degrees in these fields enable professionals to advance their careers in finance, insurance, investment, and government.
Are there any available jobs in my city?
Individuals seeking or currently working in finance degree jobs can look for opportunities on websites such as Indeed, LinkedIn, and Glassdoor. Finance jobs are typically more plentiful in major metropolitan areas where there are more financial institutions, insurance companies, banks, and trading organizations.
Can I work from home?
Finance professionals can find work in fully remote and hybrid positions. Risk monitor analyst, revenue accountant, accounts payable specialist, and accounting policy specialist are some common remote finance careers.
Is an additional certification required for the job I want?
Some finance careers require certification or licensure, though requirements vary by state. For example, certified public accountants (CPAs) must have significant professional experience and education before taking the CPA Exam and earning certification.
Other certifications demonstrate commitment and expertise in specific finance sectors. These credentials may help professionals increase their earning potential, but employers do not usually require them.
Is Finance a Good Career Path? Salaries
Salaries in finance can vary greatly depending on the role you take on. The average finance salary in the United States is slightly more than $92,000. However, this data is gathered from a wide range of positions, some of which pay very well and others much less.
The average salaries for other roles in finance are: Chief Financial Officer is one of the highest-paid financial positions, with an average salary of more than $421,000.
Financial advisors in the United States can expect to earn an average of $94,000 per year. Entry-level finance positions may pay less, but they are still more lucrative than other non-finance career paths.
However, some of the highest-paying career paths include investment banking, which can offer entry-level salaries of $100,000+ in the United States and can rise significantly within a few years.
Is Finance a Long-Term Stable Career Path?
Finance may be regarded as one of the most stable career options, but this can change due to global economic challenges, and certain paths within finance are more stable than others. Those in certain areas of banking, such as trading, are frequently concerned about their job security as a result of global events.
Meanwhile, accountancy is often regarded as a more “boring” finance job, but it is also a safe bet, as a qualified accountant can pursue a variety of career paths.
Where Do Finance Professionals Work?
Finance professionals are needed in a wide range of organizations, from the highest positions to lower-level roles.
Analysts, portfolio managers, and other investment specialists are among the finance professionals employed by commercial banks and hedge funds.
Accountants, chief financial officers, risk managers, and those involved in a variety of corporate finance positions are frequently required by private and public companies. The insurance industry is another specialized area with a high demand for candidates that is more stable than the banking industry.
Meanwhile, management consultants work in a variety of industries to assist their clients in meeting business objectives. This is a high-paced position with a steep learning curve. While consultants typically work for consulting firms rather than directly for the businesses they assist, their skills are in high demand across a wide range of industries.
There is also opportunity for finance professionals to work for themselves. Accountants, financial advisors, and those involved in areas such as private wealth management frequently establish their own practices to work with clients and private individuals.
8 Essential Skills for a Finance Career
If you’re considering a career in finance, keep in mind that you’ll need various skills and talents to succeed. Strong math skills, attention to detail, and money management are essential. You will also need problem-solving and communication abilities. Here are eight of the most important skills for succeeding in the financial industry.
Strong math skills are required for a successful career in finance. You must be able to comprehend and manipulate complex financial data, such as statistics, financial reports, and budgets. This includes understanding mathematical concepts such as probability, calculus, and algebra. If you’re not confident in your math abilities, consider taking some refresher courses before pursuing a career in finance.
Another important skill for finance professionals is analytical thinking. To make sound decisions, you must be able to analyze data and identify trends and always be prepared to think critically and solve problems. Those who aren’t born with analytical skills can improve them by taking courses, working with mentors, and practicing on their own time.
Attention to Detail
In finance, attention to detail is critical because a minor error can have a significant financial impact. For example, entering the incorrect number into a spreadsheet could result in an incorrect financial statement.
This could cause personal financial investors or creditors to be misled about the company’s financial health, causing them to lose money. Working with numbers requires precision and accuracy, which is non-negotiable for this career path.
Understanding the inner workings of a company as well as how financial decisions can impact the overall success or failure of a business requires strong business acumen. Those with strong business acumen can make sound financial decisions that will help a company grow and succeed in the long run.
Among the many ways to improve your business acumen are:
- Attending business classes
- Working with a finance industry mentor
- gaining experience through internships or finance jobs
Working in finance is a lucrative career, but you must be familiar with the financial market and its operation. It’s also critical to stay up to date on current events and financial trends so you don’t fall behind.
Finance is a complex field with a lot on the line for those who work in it. When you don’t understand the fundamentals, it’s all too easy to make costly mistakes that have a negative impact on your career.
The process of creating a mathematical model of a financial situation is known as financial modelling. This could be anything from a company’s projected performance over time to the likely outcome of a proposed investment. Investors, bankers, and other finance professionals use financial models to make informed decisions about where to invest their money.
If you want to work in finance, you must be able to create these models. Although software programs can help, a solid understanding of basic accounting and financial concepts is required. As a result, you will be able to create accurate models that will assist you and your colleagues in making important decisions.
Profit and Loss Statement
In the world of finance, it’s difficult to overestimate the value of knowing how to perform a profit and loss analysis. A profit and loss (P&L) statement shows whether a company is profitable or losing money, as well as how much money it is making or losing.
This information is critical for making informed decisions about whether or not to invest in a company. Analyzing profit and loss statements can also assist you in identifying areas where a company can save money if it needs to make cuts.
Because finance is a constantly changing field, you must be able to effectively communicate to keep up with the changes and stay ahead of the competition. Good communication skills will assist you in understanding complex concepts, explaining financial analysis to clients, and negotiating deals. They are also necessary for networking and developing relationships with coworkers and clients.
So, What Does All of This Mean for You? Is Finance a Good Career Path?
The quick and easy answer is:
Yes, finance is still a good career path, but it is unlikely to be as good in comparison to other careers as it has been in recent decades.
It’s fine if you’re at a top university or business school, have the qualifications, and start early.
The industry may not provide what you expect, but you can always transfer your skills to a different role.
Is Finance a Good Career Path? Related Articles
- BUSINESS SYSTEMS ANALYST: Salary, Job Description, Skills, Degree
- FINANCE COMPANY: Definition, Types & Top 10 Companies
- Careers in Marketing: 10 Best Careers to Go For in 2023
- BUSINESS FINANCE SERVICES: Benefits, Sources and Examples
- Highest Paying Careers in Finance and Accounting