Is Finance A Good Career Path In 2022? | Hiring Guide |
A career in finance offers a high salary, appetizing bonuses, and growth opportunities. Does that make the finance industry a good option for graduates and professionals?
Many people seem to think so. However, you have to answer that question on your own. In this article, we will give you the facts to help you decide if pursuing a career in finance is a good career path.
Table of Contents
Why Choose A Career In Finance?
You should consider a career in the finance industry because it:
- Pays well
- Offers tremendous learning opportunities
- Provides rapid career growth
Working as a financial professional makes you an integral part of a company. This is because financial services help businesses in their primary goal of minimizing loss and maximizing profit.
Financial jobs are expected to increase in the short term. According to the U.S. Bureau of Labor Statistics estimates, finance jobs, in general, will see a growth rate of over 12% by 2023. Specific roles like Personal Financial Advisor jobs will increase by a whopping 30%.
This is not restricted to Wall Street alone. Several countries in Europe and Asia are also experiencing a boom in financial careers.
It is even better for those with solid backgrounds in finance. If you have a bachelor’s degree in a finance-related field, so many job opportunities are waiting for you. Professional credentials and skill sets will further push you to the apex of the finance job chain.
Entry-Level Finance Salaries
Entry-level financial professionals earn an average of $112,139 a year as of November 2021, according to Glassdoor.
Figures from the National Association of Colleges and Employers (NACE) are a bit conservative. Andrea Koncz, research manager for NACE’s Winter 2021 Salary Survey, put the median salary at $57,250 annually. Those at the highest levels raked in over $64,500.
Regardless of which stats you consider, these figures are really high compared to the average salary averages for most jobs in America.
The U.S. Bureau of Labor Statistics (BLS) estimates that the median individual income is $1,001 per week ($52,052 annually). This is a lot less than the average salary reported by NACE.
The BLS also predicts that employment opportunities in business and financial operations occupations will grow 8% from 2020 to 2030.
Education Requirements
So the pay is good, and the future looks promising. How do you start?
Well, let’s begin by saying you don’t need an MBA from Harvard Business School to kickstart your career options. In fact, many employers will prefer an applicant with years of financial or business work experience over a fresh graduate with an MBA.
- Undergraduate Degree: The basic requirement for a starting position in the finance profession is a finance degree. Most financial institutions claim to hire from all specializations. But it pays to major in a specialization that requires you to understand and work with numbers. Ideally, you should go for any of the following fields:
- Economics
- Accounting
- Applied Mathematics
- Business Management
- Computer Science
- Statistics
If your primary major is not in any of these fields, you can focus your minor on a finance-related area.
- Internship: As we said earlier, financial institutions want applicants with experience in finance. The only way you will get enough experience in most cases is through an internship.
Companies like Goldman Sachs and Citi Bank recruit undergraduate students for summer internships yearly. They also organize workshops, symposia, and networking opportunities. Getting into an internship program can be challenging; we advise students to apply to as many as possible. Check your school board and online sites for other internship opportunities.
The goal is to get experience, career advice, practical knowledge, and contacts in the financial field. The best part is many companies will offer you employment after graduation if you achieve excellent results during the internship program. This is an easy way to kickstart your career in finance.
- Professional credentials: After your undergraduate studies and internship, you should continue your financial education. They can expose you to new trends, boost your financial I.Q. and show your commitment to being the best in the financial sector.
Ideally, you should get your education from recognized financial bodies. Credentials from these bodies will help you further your knowledge in your chosen specialty and help your job prospects. There are so many financial specialist credentials to choose from. Examples are:
- Chartered Financial Analyst (CFA®)
- Certified Public Accountant (CPA)
- Certified Financial Planner (CFP)
Best Entry-Level Positions In Finance
Most people think investment banking offers the best job positions. While this might be true in terms of pay and competitiveness, other entry-level jobs offer fantastic pay and exciting challenges as well.
To help you get started, here are the best entry-level positions in finance:
— Personal Financial Advisor
A Personal Financial Advisor works closely with clients to help with their personal finance and provide recommendations based on their monetary needs. An advisor offers personalized financial strategies to help clients to:
- Invest
- Budget
- Save
Personal Financial Advisors assist clients with short and long term financial goals and offer services such as:
- Tax Planning
- Financial Planning
- Investment Management
- Risk Management
- Estate Planning
- Retirement Planning
Some personal financial advisors also double as tax consultants and insurance agents. Some even offer financial products like mutual funds, serve as liaison offers between clients and asset managers, and may directly manage investments on behalf of the client.
According to estimates from the BLS, the average personal financial advisor earns $89,330. The BLS also predicts a slower-than-average growth of 5% through 2030. The reasons for the slow growth are:
- Increase in self-employed business owners
- Decrease in private-sector employer pension plans
- Retirement of the baby boomer generation
The requirements for a personal financial advisor position are:
- Bachelor’s Degree (preferable with a major or minor in math, economics, and finance)
- Good oral and written communication skills
- Critical thinking and analytical skills
- Special licenses and credentials for those who want to manage stocks, sell insurance policies, or offer specific investment advice
— Financial Analyst
A financial analyst analyzes financial information for consulting firms, insurance companies, investment companies, and other corporate entities. The role of a financial analyst depends on the organization and industry.
A financial analyst working for a corporation will:
- Analyze the company’s financial statements and investments
- Be on the lookout for financial issues
- Run cost-reward analysis for new projects
- Perform ad-hoc analysis and create financial reports
A financial analyst working for an investment organization will:
- Examine the financials of outside companies the organization wants to invest in, buy or sell
- Develop forecast models
- Conduct business studies into industry trends and economic conditions
According to the BLS, the average financial analyst earned $83,660 in 2020. Finance analyst jobs are concentrated in financial hubs such as London, New York, Chicago, and Tokyo.
The requirements for a financial analyst position are:
- A Bachelor’s Degree in accounting, economics, or finance
- Solid Information Technology (I.T.) skills
- Internship at a major financial firm to boost your career prospects
— Investment Banking Analyst
An investment banking analyst primarily works at an investment bank and works within corporations, venture capital firms, government bodies, or individuals.
An Investment banking analyst job at the entry-level is to:
- Perform industry research and valuation
- Produce deal-related materials such as financial reports
- Carry out financial analysis of corporate performance
- Gather materials for due diligence
- Interpret financial data and make recommendations
There are numerous entry-level investment banking roles in:
- Investment banks
- Venture capital firms
- Hedge funds
According to Payscale, the average investment banking analyst made $70,168 in December 2021. The requirements for an investment banking position are:
- A Bachelor’s Degree in economics, finance, or management
- A Master’s Degree in the above-listed areas also helps
- Solid Information Technology (I.T.) skills
- Internship at a major investment management firm to boost your career prospects
— Junior Tax Associate
A junior tax associate or accountant helps individuals and corporations to comply with changing federal, state, and local tax regulations and laws.
The futures of a junior tax associate include:
- Calculating and estimating payments
- Conducting tax-related research
- Reviewing and auditing internal fiscal systems
- Preparing tax-related documents such as tax returns, and
- Working with other professionals such as auditors.
A junior tax associate can transition from a tax-related job to other job roles such as:
- Accounting Manager
- Budget Director
- Controller/Comptroller
- Treasurer
- Chief Financial Officer (CFO)
According to the BLS, the average salary of a junior as a graduate was $55,640 in 2020. The requirements for a financial analyst position are:
- A Bachelor’s Degree in accounting or a related discipline
- Solid Information Technology (I.T.) skills
- Internship at a major financial firm to boost your career prospects
- CPA license for those who want to advance their careers
How To Find The Right Role In Finance
Success in a finance career requires you to identify the most rewarding entry-level positions based on:
- Your future career prospects
- Salary expectations
- Your unique abilities and interests
These will help you pick the best entry-level jobs. Then you can begin your search via your network of friends and colleagues and online job sites. Popular examples of online job sites are:
- Monster
- Indeed
Here is a brief intro to some of the best roles in the finance sector.
— Hedge Fund Analyst
The job of a hedge fund analyst is to manage portfolios for high network individuals who pool their capital to make investments in hedge funds. They advise on sound investment recommendations and sometimes have the discretionary powers to implement those recommendations.
Hedge Fund analysts must constantly analyze the market for any risk or profitable investment. This makes the job role extremely demanding.
This is why they are also one of the top earners in the finance sector. According to Glassdoor, a top hedge fund analyst earns around $200,000 a year.
It is common for hedge fund analysts to specialize in a type of class asset or industry.
The education requirements for a hedge fund analyst job position are:
- Four-year degree in business, economics, or finance
- Financial Industry Regulatory Authority (FINRA) license(s)
— Private Equity Associate
A private equity associate helps investment firms to find potential investors, create deals, help with acquired investments, and perform due diligence. They are also charged with reviewing and restructuring existing deals.
The size and scope of the private equity firm an associate works with determines the exact job roles. According to Glassdoor, a private equity associate earns $100,000 a year on average.
The education requirements for a private equity associate job position are:
- Four-year degree in statistics, math, economics, or finance
- A Master’s or Ph.D. in a quantitative field or an advanced degree in financial engineering or computational finance is an added advantage.
— Actuary
An actuary’s main role is to analyze the financial costs of risk and uncertainty. The risk can be sickness, death, disability, injury, or property loss. They also offer risk management services.
These functions make them very useful in insurance companies. They can also work for:
- Pension plans
- Banks
- Investment firms
- Accounting firms
- Consulting firms
- Government
- Hospitals
To work as an actuary, you need a strong background in math and a four-year degree. The national average salary for an actuary ranges around $125,000, according to Glassdoor. The education requirements for an actuary job position are:
- Four-year degree in actuarial sciences, statistics, math, or any related field such as economics, business, or finance
- A suite of professional exams from the Society of Actuaries (SOA) or the Casualty Actuarial Society (CAS). It can take up to seven years for an actuary to become an associate and another two to three years to earn fellowship status
— Securities Trader
A securities trader buys and sells securities for individuals or firms. Some of them have their own trading accounts, while others rely on accounts provided to them by their employers. They also track the performance of securities based on their price stability and fluctuations.
Traders work in markets such as commodities, stocks, and crypto. They may also specialize in a single asset class like stocks or real estate. Those who perform well will typically receive more trading capital or even break out to create their own hedge funds.
Securities traders typically work at:
- Investment banks
- Commercial banks
- Asset management firms
- Hedge funds
There are three types of securities trading jobs. These are:
- Sell-Side Traders: Sell-side traders primarily work for banks to buy and sell products for their clients or the bank itself.
- Buy-Side Traders: Buy-side traders work for companies like asset management firms to buy and sell under the direction of a portfolio manager.
- Hedge Fund Traders: Hedge fund traders trade to maximize profits for the fund itself. They can ignore a client’s order if they believe it is detrimental to their profit goals. They may work under a portfolio manager or independently make their buys and sells.
The average salary of a securities trader is over $88,000, according to Glassdoor. The education requirements for a securities trader job position are:
- Four-year degree in a finance-related field
- FINRA license(s)
— Financial Analyst
A financial analyst is responsible for measuring the risks in investing in bonds, stocks, and other securities then advising traders and portfolio managers on whether to go along with the investment or not. Their role also includes predicting if a company will be able to repay its debts with the inclusion of bonds.
There are two types of financial analyst jobs:
- Investment analysts who specialize in specific areas like industrial sectors or investment types. They work for sell-side companies and provide sell recommendations to clients or buy-side companies and investment strategies for portfolio managers.
- Financial analysts who work within non-bank corporations to analyze financial positions and develop budget plans.
A financial analyst must have strong analytical and communication skills and the ability to handle high stress. According to Glassdoor, the average financial analyst makes $74,000 a year.
The education requirements for a financial analyst job position are:
- Four-year degree in finance or any related field such as economics or business
- Other optional certifications are:
- CPA
- MBA
- FINRA license
— Investment Banker
An investment banker assists organizations in the private and public sectors to issue debts and securities. They make recommendations for transactions involving mergers and acquisitions. Their goal is to help businesses raise capital through:
- Stocks
- Bonds
- Public offerings
- Mergers and acquisitions
- Venture capitalism
Investment bankers have different roles based on their organization and their specific responsibilities. Those working in a traditional investment bank have to interact with merger and acquisition professionals and insurers of securities. They may also trade stocks, bonds, and other securities in the secondary market.
Three types of investment banking jobs are:
- Mergers and acquisitions: Bankers in this job position recommend companies looking to merge with large companies or buy smaller companies.
- Underwriting: Bankers in a company’s underwriting department mainly serve client-facing roles and work with traders and security salespeople to find the best options.
- Private Equity: Bankers in this category mainly raise capital for non-public enterprises and companies in return for a portion of any profits they generate.
- Venture Capital: Venture capital (V.C.) bankers are specialists in providing funding to startup firms. They are adept at analyzing emerging industries and calculating the best time to enter and exit an investment opportunity.
According to Glassdoor, an investment banker makes over $80,000 a year on average, while the average for investment banking analysts is $90,000. The education requirements for a financial analyst job position are:
- Four-year degree in finance, economics, or any quantitative or business-focused field
- MBA or a Master’s in finance (preferably from a top finance school)
The Bottom Line
Jobs in the corporate finance sector offer higher pay than the median salary, even at entry-level. But getting your foot in requires serious groundwork and commitment. The best job roles are competitive even at the internship level.
However, with an undergraduate degree in accounting, finance, or economics, you can be sure of a good job position in the finance sector. You also need to expand your network and stay updated on major finance events.
It is easy to transition from one finance job to another, so don’t worry if your first job isn’t your dream job. The goal is to place your feet firmly in the sector and begin to explore your options from there.
Frequently Asked Questions
What are the best schools for finance?
The best schools for finance in the United States, according to College Factual, are:
- University of Pennsylvania
- University of Notre Dame
- Yale University
- Washington University in St Louis
- Northwestern University
- Georgetown University
- Johns Hopkins University
- Claremont McKenna College
- Boston College
- Wake Forest University
- Lehigh University
- Harvard University
- Villanova University
- The University of Texas at Austin
- The University of Illinois at Urbana-Champaign
- Santa Clara University
- Bentley University
- Elon University
- University of Wisconsin – Madison
- Vanderbilt University
- University of Maryland – College Park
- Boston University
- George Washington University
- Virginia Tech
- Syracuse University
What is the starting salary of a finance major?
The starting salary of a finance major is between $62,000 to around $87,000 as a yearly salary based on figures from the Bureau of Labor Statistics. This figure primarily applies to finance majors who work as financial analysts, financial planners, or investor associates in entry-level positions.
According to the Bureau of Labor Statistics website, the annual median salary for financial advisors, financial analysts, budget analysts, and Investor Relations Associate are $87,850, $81,590, $76,540, and $62,270, respectively.
You can use these median figures to help you see how much you can expect from a job with your finance degree. The actual figure can be higher or lower depending on your location and the company you are looking to work with.
That said, the starting salary of a finance major can increase due to:
- Experience
- Professional credentials
- Time spent within the organization
Getting a graduate degree can also increase your earning power and financial success.
What are some disadvantages of finance?
Some of the disadvantages of working in finance are:
- Continuing Financial Education: In the financial sector, continuous education isn’t just something that boosts your career. It is also compulsory for those who want to stay relevant and competent.
The sector is constantly changing with new rules, regulations, financial methods, and tools. Many see this as a positive thing, but the mental and financial cost of keeping up can be exhausting. You are required to attend an annual course and take examinations that ensure you stay updated with new information.
- Stress: A career in finance offers high working pressures, tight deadlines, high-level analytical skills, and intense attention to detail. Many finance professionals experience burnout within their first few years in the finance sector. Those who adapt to the pressures have to make sacrifices due to the huge demand of their careers.
- Quotas and deadlines: Most individuals working in the financial sector have quotas to meet daily, weekly, or monthly. Many of these quotes come with very short deadlines. This is partially why many recruits leave after working a few months in the banking industry or other financial institutions. Those who meet their quotas often work long hours and ensure many sleepless nights. It is easy to see why burnout is frequent among entry-level positions.
- Low job security at the entry-level: There is little job security in the finance sector for those at the entry-level. Financial institutions often go on hiring sprees during an economic boom and downsize their staff during economic down cycles.
Is finance a profitable career?
Yes! If you are looking for a career that can make you rich, consider a career in the finance sector. Financial advisors, financial analysts, and financial managers bring in a lot of money each year.
These job designations offer median salaries that tower the wages for other occupations and include lucrative bonuses and commissions. They can also set the foundation stones for executive leadership roles.
However, it pays to know the following:
- Finance jobs are just as stressful as they can be financially rewarding. Those who seek a finance career must be ready to handle pressure, meet deadlines, and make financial decisions based on available information. People who often second guess their decision-making abilities may find finance jobs too demanding and mentally taxing.
- Finance jobs require long hours, especially at the entry-level. It is not rare for junior associates to work nearly 100 hours per week. The result is multiple sleepless nights and high stress.
- Competitiveness: Finance roles are very competitive, so you must constantly step up to the game. This requires you to take yearly professional examinations and seek further knowledge in your area of specialization. Financial regulations are constantly changing, and you need to stay up to date on them if you want to remain relevant.
