Text 22 careers in finance

Careers in finance vary as widely as the scope of finance itself. Some of these career paths require extensive, highly specialized knowledge and advanced degrees. Others begin with entry level positions open to enthusiastic, hard-working indi­viduals regardless of their undergraduate majors.

The scope of finance has increased so much over the past decade that the field is generally subdivided into three parts. Financial markets and institutions, financial management, and investments are commonly considered to be separate disci­plines. The study of financial markets and institutions focuses on those public and private institutions engaged in granting loans, accepting deposits, facilitating securities transfers, raising corporate funds, and regulating both the economy (domestic and global) and its financial institutions.

Financial management is concerned with how firms acquire and allocate funds. It examines how firms obtain short-term and long-term funds and how these funds are spent to acquire selected assets. Decisions regarding dividend policies, merger and acquisition activities, and leasing, all fall within the realm of the cap­ital budget. Financial management also emphasizes the cash budget and manage­ment of its components.

Investment analysis focuses on how individuals or portfolio managers select appropriate financial and real assets. It examines the markets within which fund raising and security trading take place. It explores the methodologies used by investors, providing insights into criteria for analyzing companies and industries, as well as generating norms of behavior. The study of the markets for stocks and bonds, stock and index options, warrants, and commodities and financial futures are all part of the investments area.

Careers in Institutions and Markets

Entry level positions in financial institutions and markets can include everything from bank teller to credit trainee. A person with a strong finance background would probably begin as an administrative assistant to a loan officer, or as a junior financial analyst in either the credit department or the research department of a depository institution. Positions such as customer service representative or mort­gage servicing specialist in an insurance company or a mortgage banking compa­ny, respectively, are generally staffed by people with limited finance backgrounds. More experienced individuals would be eligible for loan officer, branch manager, or senior analyst positions.

Careers in Financial Management

Entry level positions for those with associate degrees and limited experience in finance include data processing clerks, investor relations specialists, and accounts payable staff positions. Finance majors find entry level positions as junior accoun­tants in cost or financial accounting departments, budget analysts, or financial planners. Promotion opportunities generally lead to managerial positions such as cash manager, credit manager, or financial accounting manager. Senior financial man­agement positions include CFO, corporate comptroller, and treasurer.

Careers in Investments

Generally it is the investment area that attracts people to finance. They see an appealing opportunity to control multimillion dollar investment portfolios, or to be part of an investment banking institution engaged in mergers and acquisi­tions. Most brokerage houses, however, provide entry level positions as registered representatives (for those who qualify by passing specific NASD (National Association of Securities Dealers) examinations), or as investment or industry analysts. Clerical and assistant positions are always available with the major brokerage houses for those with limited experience, but excellent self-motivational skills. Senior employment opportunities include port­folio manager, senior investment analyst, and investment counselor.

1. The scope of finance is generally subdivided into three parts. What are they?

2. What does the study of financial markets and institutions focus on?

3. What is financial management concerned with?

4. What does investment analysis examine?

5. What are the parts of the investment area?

6 What can entry level positions in financial institutions include?

7. Where would a person with a strong finance background begin?

8. What can you say about entry level positions and promotion opportunities in Financial Management?

9. What are the appealing opportunities in the investment area?