Jobs in the finance industry can be extremely lucrative. That means that they are in high demand, with entry qualifications as lofty as the salaries. For most of them, an undergraduate degree is the minimum requirement and many professionals have post-graduate degrees. These include MBAs first and foremost, but other master’s degrees and PhDs are not uncommon. Usually, advanced skills in statistics and mathematics are prized.
That said, the finance industry is broad and the opportunities are varied. You may join the finance department of a corporation, work in the banking and financial services sector, or enter the world of investment banking or the financial markets.
These careers offer above-average pay to start and go from there into the stratosphere. Here’s an overview of high-paying finance jobs.
- Finance industry jobs are lucrative, with entry qualifications as lofty as the entry-level salaries.
- Most finance industry jobs require a substantial amount of education, especially in the math, economics, and statistical disciplines.
- Six high-paying financial professions: portfolio manager, corporate finance manager, investment banker, trader, economic analyst, and financial analyst.
Portfolio Management Jobs
Portfolio management is one of the most prestigious roles in the entire finance industry. Portfolio managers, often known colloquially as money managers, directly oversee institutional and retail client investments in their daily work, providing them a tremendous amount of power, as well as a deep responsibility. They recommend personalized investment strategies and specific investment decisions to clients, and they usually have discretionary power in executing those strategies to fulfill the client’s goals.
It’s common for portfolio managers to specialize in particular asset classes, such as equities or fixed income. Some managers are more focused still. A manager may be a specialist in certain types of stocks, or blockchain-related startups, or high-yield bonds. Focused funds employing these specialized managers may seek individuals with research analytic backgrounds. Others include broader mandates, such as a multi-asset class strategy, and these firms often look for managers with a similarly wide base of investment knowledge and background.
There are a variety of employers in the sector, each focusing on a specific segment. Investment companies and financial service firms offer funds for retail investors. Investment banks provide strategic advice to corporations, large institutions, and even governments. Commercial banks offer a range of investments to their customers. Money management firms, portfolio management companies, and hedge funds cater to high-net-worth individuals.
After earning a four-year college degree, as well as a graduate degree, many potential money managers also attain the Chartered Financial Analyst (CFA) designation. Typically, a portfolio manager position is a “destination” role that does not lead anywhere else. Thus, rather than continue to climb a career ladder, portfolio managers may manage increasing amounts of money, or they may leave to start their own firm or hedge fund.
Corporate Finance Jobs
Another career path in this field goes through the finance department of a corporation. Specialists in this field can work in a variety of industries.
Types of Corporate Finance Jobs
Finance Manager: Every corporation has finance managers, and they are among the top-paying jobs in the financial industry. They are responsible for all financial aspects of the business including risk management, planning, bookkeeping, and financial reporting.
Accounts Manager: The accounts manager is responsible for the general accounting function and oversees the completion of ledger accounts and financial statements. Some organizations may require individuals to have a Certified Public Account (CPA) designation and at least seven years of experience in the accounting field.
Risk Management: Risk managers keep on top of a wide range of pitfalls that befall businesses, including credit risk, market risk, operational risks, and liquidity risk. Companies are increasingly investing huge sums of money on sophisticated technology and people to help them measure, manage, and mitigate these risks. The field has gained tremendous importance in banks and financial institutions in the aftermath of the Great Recession, as numerous scandals and failures have led to tighter government and industry regulations and higher accountability standards.
One way to get started on a career as a risk manager is to get certified by PRMIA or GARP, the risk management certification bodies.
Investment Banking Jobs
Investment banks typically work with corporations, governments, and other large financial institutions to help them raise capital or to advise them with regards to strategy. They invest in new or growing ventures, facilitate mergers and acquisitions, and take companies public. They also frequently buy and sell a range of investment products, such as stocks, bonds, and other securities.
The biggest of the big names are Goldman Sachs and Morgan Stanley, but they are not the only ones hiring investment bankers. Investment banking departments exist within big commercial banks like Citigroup and at smaller regional and boutique banks. Investment bankers work at alternative asset management companies, including venture capital firms and private equity institutions. Many large companies have an in-house division that operates like an investment bank, providing evaluations of strategic opportunities and corporate mergers.
For better or worse, investment banking has long held a reputation for being a blueblood profession. While historically, many investment bankers have enjoyed prestigious academic backgrounds at top-level universities and colleges, the profession has grown more democratic—at least in social terms. Professionally, it still has an elitist tinge: MBAs are often de rigueur, though it’s less common for investment bankers to seek out professional certifications like the Series 7 or CFA as compared with some other types of finance jobs.
Types of Investment Banking Jobs
Mergers and Acquisitions (M&A): Bankers focusing on mergers and acquisitions specialize in providing strategic advice to companies that are looking to merge with their competitors or to buy smaller companies. M&A bankers utilize financial modeling in an effort to evaluate these large-scale potential deals. They must also be able to successfully interact with clients, as these jobs typically require interactions with high-profile executives, and M&A specialists must be able to convince these executives of their ideas.
Underwriting: Raising capital is part of a bank’s underwriting department. Underwriting specialists typically focus on debt or equity and often have an industry-based focus as well. These bankers commonly serve in client-facing roles, working with outside contacts to determine capital needs while at the same time working in-house with traders and security salespeople to find the best options. Underwriting is not limited entirely to investment banks and has spread to larger universal banks to a great degree in recent years.
Private Equity: Many investment banks have private equity arms, although private equity jobs are typically found at smaller, specialist firms. Bankers in this area raise money for non-public enterprises and companies, keeping a portion of any profits they are able to generate through deals. It’s common for private equity professionals to have prior experience at investment banks, as well as outstanding academic credentials.
Venture Capital: Venture capital firms tend to specialize in providing new capital to emerging companies, often in rapidly-developing industries, including tech, biotech, and green technology. While many of the target companies eventually fail, venture capitalists often prosper by getting their financial stake in and then out at the early stages of development, producing massive returns on investment. Employees of venture capital firms are typically both adept at number crunching and deal-making and clued into new technologies and ideas. They usually get a sense of thrill from the prospect of discovering “the next new thing.”
These jobs embody the classic Wall Street image of an individual buying and selling stocks, bonds, commodities, currencies, and more. But these days the scene may be set far from Wall Street.
Trading jobs can be found at commercial and investment banks, asset management firms, hedge funds, and more. Wherever they work, traders are striving to earn a profit for their employer or their clients via a bid/ask spread. Traders for asset management firms seek the best price of a security when conducting trades on behalf of a client; traders for hedge funds aim to take proprietary positions in an attempt to benefit from expected market movements.
It used to be possible to work your way up as a trader even without a college degree. While the career path still tends to be somewhat less defined than for, say, investment banking, many traders nowadays have a background in a finance-related field from a strong university, and often many have advanced degrees in statistics, mathematics, or related fields of study. It’s also common for traders to take the Series 7 and Series 63 exams early on in their careers.
Traders who perform well will typically be allocated increasing amounts of capital. It’s not uncommon for top traders to break out on their own to form hedge funds.
Types of Trading Jobs
Sell-Side Traders: Sell-side traders typical work for banks. They buy and sell products for the benefit of the bank’s clients, or for the benefit of the bank itself.
Buy-Side Traders: Buy-side companies like asset management firms also employ traders. They typically conduct buying and selling under the direction of a portfolio manager.
Hedge Fund Traders: Hedge fund traders are not working to satisfy client orders, but rather to maximize profits for the fund itself. Like buy-side trading jobs, traders at hedge funds may take orders from a portfolio manager, or they may even be able to decide on their own buys and sells.
Economic Analysis Jobs
Economic analysts observe broad areas of the economy and the markets in order to look for major trends. These jobs tend to appeal to individuals who enjoy analyzing data, tracking trends, and making opinions based on those trends regarding the future of financial markets. Analytical jobs frequently involve writing, public speaking, and ample work with Excel or another spreadsheet application.
These jobs, including those of economist, strategist, or “quant,” are found in many different institutions. These jobs exist at investment banks, money management firms, and other traditional finance-world institutions. They also can be found in the public sector, in government, and even in academia. Most financial analysts hold an MBA degree, and many have a Ph.D. Because of the writing component in many related jobs, experience writing and even publishing in the field is desirable.
While there is a high initial barrier to entry, once in, financial analysts enjoy a degree of flexibility that many other finance jobs do not. Analytical jobs can often move between different types of employers. An established economist may move from a job at an investment bank to one at a university to one with the government while conducting essentially the same type of work in each case.
Types of Economic Analysis Jobs
Economist: Economists are ubiquitous at a variety of finance-related institutions. Investment banks, asset management companies, and central banks all employ economists, as do government agencies and academic institutions. Generally speaking, an economist tracks and analyzes data in an effort to explain current market or economic circumstances and predict trends going forward.
Economic Strategist: There is a fine line between a strategist and an economist. Economists tend to focus on the broad economy while strategists hone in on the financial markets. Strategist jobs are more likely to be found at banks and money management companies than in academic and government institutions. Many strategists begin their careers as research analysts, focusing on a particular product or industry.
Quant: While some economic analytic positions require public speaking or writing, quants typically work behind the scenes. Professionals in this branch of analysis create mathematical models designed to predict market activity. They can be found at companies including banks, hedge funds, and money management firms. Most quant workers have backgrounds in mathematics or statistics, often including a Ph.D.
Financial Analyst Jobs
While they sound similar, these are distinct from the analytical jobs discussed above. Analysts at financial-industry firms are typically responsible for researching potential investments and offering opinions and recommendations to help guide the traders and portfolio managers. Financial analysts also work at non-bank corporations, too, where they typically analyze the financial position of the company and help to formulate budgetary plans.
Types of Financial Analyst Jobs
Investment Analyst: Investment analysts typically specialize in one or more areas, including particular regions of the world, industrial or economic sectors, or types of investment vehicles. Analysts working for sell-side companies will usually put out buy and sell recommendations for clients. Analysts working for a buy-side company will often recommend securities to buy or sell for their portfolio managers.
Financial Analyst: Financial analysts tend to work at more traditional (non-finance) corporations or government agencies. Nearly every large company, regardless of sector or industry, keeps financial analysts on staff in order to analyze cash flows and expenditures, to maintain budgets, and more. These analysts may also help to determine the best capital structure for the corporation, or maybe to assist with capital raising. Financial analysts have the potential to rise through the ranks at their corporation, eventually becoming treasurer or chief financial officer.
The Bottom Line
Despite their differences, common characteristics apply to many financial professions. Financial careers tend to be stressful, have high barriers to entry, enjoy lucrative salaries, and be located in major financial centers. They tend to provide challenging work environments, interaction with highly motivated and intelligent colleagues, and stiff competition among applicants. Most of them require a substantial amount of education as well as stellar academic performance. While many people are drawn to the financial field because of the potential for substantial income, those who are the most successful tend to also have a distinct passion for their work.