What types of jobs are in Finance?

I am working on a Bachelor’s degree with dual majors of Finance and Economics. What types of jobs are there in Finance? My preference is for investment related jobs. Is there a difference between a financial analyst and an investment analyst? Is there a difference between a financial planner and a consultant?

Well, I worked as a corporate financial analyst for a number of years. I never had any interest in investment analysis or personal financial planning because those jobs involve a lot of salesmanship which had no appeal for me.

As a corporate analyst my job was to build spreadsheet models for business ventures involving multi-year cash flow impact–expansions, acquisitions, divestitures, and so forth. I worked in-house, so I was limited to activities involving the telecom company for which I worked; if you were to do the same work as a consultant, you’d get more variety but have a lot of travel and work much longer hours.

Except for the relatively rare times when my company was planning something with a little bit of edge to it, it wasn’t the most exciting work, but it certainly kept food on the table.

At the beginning of Rocky I think Mr Balboa is working in the financial industry,

Did you do a lot of writing and presentations? Do you think there are any corporate financial analyst jobs in Utah?

Yes. As I gained in seniority and responsibility, that became a more important part of my job.

I would certainly think so. My understanding is that SLC and Provo are boom areas with a fairly business-friendly environment and a lot of growth. At one point when I was working in Finance my boss actually transferred to Utah to work for one of our divisions which was headquartered there. He said that the area was growing so rapidly that housing prices were a problem.

I don’t have any first-hand knowledge, however, as I no longer work in the field.

I do alot of what Freddy did. However, I also work with investments because I help manage the company’s pension plan. Plus, I do some analysis on our 401K. Additionally, getting involved in capital budgeting and capital structure will naturally get you some investment experience. Investing in a capital project or acquisition is conceptually similar to investing in a stock or bond. And issuing debt is the reverse side of buying a bond.

But I should tell you that most corporations will want you to have an MBA before you get involved in the decision-making process. So I think that an MBA from a great-to-good school should be in your short-medium term plans.

Okay I’ll take that into consideration. Are there any Finance jobs that only require a bachelor’s degree?

Yes. I don’t have an MBA myself, although I have a graduate degree in Computer Science and lateraled into finance via people who knew my financial programming work. For an entry-level person, a BS-only job might involve the annual planning and budget cycle–coordinating division inputs, producing variance reports, and so forth. One option is to go for an MBA at night while working at such a (hopefully 9-to-5) job.

To be a bit clearer, there are no real requirements for any position. These are all defined by the company and management. But for non-financial corporations, Finance is a support function. So most management would prefer someone in a decision-making Finance role to have a good understanding of the overall business and strategic goals of the company. An MBA tells management (rightly or wrongly) that this person has the educational background to understand the entire business, and not just the Finance part. Thus, landing a higher-level job is made easier by having an MBA from a top tier school.

Any large corporation is going to have a Finance department, concerned with keeping track of Profit and Loss (P&L), expenses, revenue, etc. Droves of financial analysts there. They’re generally involved with things like CBA’s (Cost Benefit Analyses), reengineering, and suchlike. That is, how do we as a company end up with more money in our pockets at the end of the day?

I’m going to contradict Freddy the Pig here about investment analysts being sales-y positions. I work for a large financial services corporation, and our investment analysts are not the kind of people you want talking to customers in most cases. They’re the number-crunchers who help figure out what to buy and sell in any given investment portfolio. The portfolio managers (who have the ultimate decision-making responsibility) are often dragged out in front of clients to talk to them about investment strategies, but not usually the analysts.

A financial planner is definitely a sales-oriented job, though. It’s a matter of working with individual people (as opposed to corporate clients) to help them plan out how they’re going to invest to meet their goals, and hopefully sell them some investment vehicles for which you get a commission. The big financial services firms employ them or work with them as independent contractors.

Consultants, though – that’s too broad a category to define concisely. Generally speaking, it’s someone who comes from outside your company to lend expertise you don’t have or provide professional services that you don’t have the staff for. Vague, I know, but it’s a much-used and much-mangled title.

Another kind of finance job is Pricing. That’s what I do, financial analysis of individual products and maintenance of the pricing system so that we know our sales reps are getting competitive and profitable prices for their deals. There is also transaction pricing, where you dig into the details of individual deals (usually the larger ones) and make sure all the numbers are clean and the salesman isn’t going to put the company in the poorhouse by selling it.

I am going to tell you more about me and my interests and then maybe you can give me some more help. I am really shy and do not like to talk on the phone or do presentations. I probably would not like a sales job. I do not want to be a manager. Of the classes that I have taken, the things I like the most are calculating cash flows to determine whether a project should be taken and calculating financial ratios from the balance sheet. I want a numbers crunching/calculator/computer type of job. I do not want to work 60 hours per week. My second major is Economics so perhaps there are some related jobs in that field. I was talking to a career counselor and he suggested I consider looking into these industries: utilities, transportation, health and the federal government.

Perhaps I chose the wrong major, but I like dealing with numbers and money and accounting and statistics didn’t appeal to me.

One more thing I forgot to add: I expect to start with an entry level job.

There are jobs like you describe but they vary by company. I used to work at the headquarters of a supermarket chain and I helped hire two financial types to do finanacial analysis on the inventory in the distribtion centers. They ran database queries and made reports to so where money was tied up in a bad way and what we should do.

Big companies come up with all kinds of financial analyst jobs specific to their industries. They mainly work with spreadsheets and build reports for the decision makers. Good computer skills especially with databases are a must.

If that’s the case, you might want to consider the career that I switched to after I got laid off from my last finance job: actuarial science. It involves projecting losses and setting prices for insurance companies. (There are also actuaries who project cash flows for pension plans, but I work on the insurance side.) You advance by passing a series of very difficult exams, so it’s possible to make a lot of money without having a lot of managerial responsibility. The exams are a mix of math, accounting, finance, investment, and statistics. Relative to finance, the advantages are (a) nobody cares if you have a graduate degree as long as you can pass exams; and (b) more emphasis on technical competence and less on schmoozing and ass-kissing. The disadvantage is that if you can’t pass the exams you won’t go anywhere.

It looks like Freddy and I are living mirror-image lives. My undergrad was in Statistics and Actuarial Science. I passed the first 2 exams, but decided that I didn’t want to spend the next 2 decades of my life studying for exams. So I jumped ship and got my MBA in Finance. I must say, that it takes a truly special person to be an actuary. HYou really have to love math. I was good at it, but didn’t love it. Of course, my actuarial background comes in handy when I’m wearing my pension management hat.

Also, a word of advice for Raging Catfish: be sure that a job is a Finance job before accepting. More often than not, accounting jobs are labeled as “Finance” when they’re really not. Don’t get stuck doing accounting.

Can you get study guides for the exams? How much do the tests cost?

Do you have any job title suggestions? Or suggestions on finding Finance jobs?

The first two tests cost $150 each. After that they get more expensive but by that time it’s a non-issue because your employer will be paying for it. Study guides are available online (you won’t find them in bookstores because demand is too small), but I didn’t find them to be necessary for the early exams–I used the textbooks recommended on the syllabus. If you’re interested, check out this web site which answers a lot of questions and has links to more sites.

Job titles can be misleading. Knowledge of accounting is necessary for most Finance jobs. However, performing accounting work should not be necessary. Analysis using accounting metrics, and understanding their weaknesses, is essential. In general, Finance is forward-looking while accounting is backwards-looking. For accountants, the P&L is the #1 priority. For finance people, all of the financial statements are equally important. The point of an organization is to create value and not maximize EPS. Familiarize yourself with the concept of Economic Value Added (EVA) AKA Shareholder Value Added (SVA) or Economic Profit. Understand why this metric is so important. Bring it up in interviews and demonstrate your knowledge of it. Maximizing this metric going forward will lead to higher and higher stock prices.