Page 113 - Encyclopedia of Business and Finance

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Careers in Finance

Financial planners go a step further in advising and finance, general business administration, economics,
educating their clients. They often provide advice on invest- accounting, or marketing. In order to advance, many take
ments, investing for retirement, tax planning, and employee part in management trainee programs where they briefly
benefits. Their strategy tends to be more of a comprehen- work and learn about different departments. To advance
sive approach to advising clients on financial matters when further and gain access to higher salaries and more presti-
compared to brokers. These planners can also buy and sell gious positions, many people obtain a master’s degree in
stock, mutual funds, bonds, and annuities. business administration.
Investment bankers and financial analysts make rec- For many brokers and commodities dealers, income
ommendations about potential profits from investments is based on a salary and on commissions from the sale or
in specific companies by reviewing the companies’ finan- purchase of stocks, bonds, or futures contracts. When the
cial records and evaluating market trends. They also play economy is strong these commissions and bonuses are
a very important role in determining the market value for much higher than they are when the economy is in a
stocks that are traded publicly or stocks being purchased slump. Another factor in determining earnings in this area
when a company is merging with or acquiring another of finance is the amount of assets the manager is respon-
company. Financial analysts often specialize in a specific sible for managing.
industry sector, such as technology stocks. Yearly earnings for entry-level brokerage clerks are at
Another career in the securities and commodities area the start of the scale. Further up the scale are financial
of the finance industry is that of portfolio manager. These analysts and sales agents. At the next level are the financial
finance professionals are responsible for investing large managers. The highest-paid professionals in the securities
amounts of money. The portfolios they manage are often and commodities industry are general managers and top
mutual funds, pension funds, trust funds, and funds for executives. Many firms also offer their employees profit
individuals who are investing very large amounts of sharing and stock options. In addition, most salaried
money. Most importantly, portfolio managers must have a employees receive health benefits, paid vacation, and sick
clear understanding of a mutual fund’s or a client’s invest- leave.
ment goals in order to ensure that the investment deci- Job growth in this industry is being fueled by several
sions they make meet the financial goals and guidelines set factors. First, more than ever, people are investing in secu-
by the mutual fund or client. rities as a way to save money and plan for retirement,
As a whole, the workers in this area of the finance resulting in a large influx of money into the stock market.
industry are well educated and highly trained. Even entry- Second, although online trading is reducing the need for
level brokerage clerk positions often require a college direct contact with brokers, there is still a need for invest-
degree. Also, to sell securities professionals are required to ment advice. Finally, the increased demands of investing
pass an examination testing their knowledge of invest- in a complex global market have created a need for skilled
ments. The National Association of Securities Dealers investment managers. According to the Occupational Out-
(NASD) conducts this testing and licenses professionals to look Handbook, these factors have contributed to an
sell a variety of investment products. Most brokers and employment growth projection of 40 percent for this seg-
sales assistants obtain the Series 7 license from the NASD ment of finance careers, which is much greater than the
by passing the General Securities Registered Representa- 15 percent projected for all other industries combined.
tive Exam. In addition to passing the exam, these profes- SEE ALSO Finance
sionals are required to take classes on regulatory issues and
new investment products in order to keep their licenses.
Currently, there is no special licensing requirement to BIBLIOGRAPHY
Career Guide to Industries, 2004–05 Edition (2004). U.S.
become a financial planner. However, many financial Department of Labor, Bureau of Labor Statistics. Washing-
planners earn a certified financial planning (CFP) or char- ton, DC: The Bureau.
tered financial consultant (ChFC) designation. The CFP Careers in Focus: Financial Services (2006). New York: Ferguson
is issued through the CFP Board of Standards and the Publishing Company
ChFC is offered by the American College. A series of Occupational Outlook Handbook, 2004–05 Edition (2004). U.S.
exams on investments, taxes, insurance, retirement, and Department of Labor, Bureau of Labor Statistics. Washing-
estate planning must be passed in order to receive one of ton, DC: The Bureau.
these designates. In addition, the CFP must follow the Pandy, Anil, and Okusanya, Omotayo T. (2001). The Harvard
rules and regulations set forth by the CFP Board of Stan- Business School Guide to Careers In Finance 2001 Edition.
Boston: Harvard Business School Press.
dards.
Most of the workers in the entry-level analyst and
managerial positions have a college degree and studied Mark D. Wilson

90 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION