10 Best Finance Careers
Finance careers are among the hot favorites in most MBA campuses. Even after the financial crisis we’ve seen in the past few years, the career prospects in the finance sector continue to shine. On an average, about 40% students from an MBA school join the finance sector in different roles. The most common reason sited for their preference for finance is the high salaries, although there are many other good reasons to be in this industry. Let’s take a look at some of the best financial career options that a job seeker has in this industry.
The following finance careers are discussed without any order of preference.
Investment Banking: Also popularly referred to as merchant bankers, investment bankers broadly work in two areas. One is corporate finance, which involves mergers and acquisition activities. Within corporate finance, the investment bankers work on M&A deals; they role involves valuations, identifying and matching target companies, price negotiations, legal and regulatory compliance among other activities. The second area is of capital markets in which they help large companies raise money from the public primarily through equity and debt offerings.
Fund Management: Fund management is the most important activity in a fund, such as a mutual fund. As a fund manager you are required to manage the funds collected from the public and invest it in equity, debt, money markets, etc. The fund manager is expected to grow the fund and achieve the fund’s objective by allocating funds in the right financial instrument as per the fund’s objectives.
Wealth Management: Today, most financial institutions provide wealth management services to high net worth individuals, and business owners who are looking for experts to assist them in managing their wealth. As a wealth manager, you provide investment advisory services and work directly with individuals to help them make the best use of their money. You are expected to have knowledge about a vast array of subjects such as financial markets, insurance, estate planning, retirement planning, taxation, etc. The most common route in this role is to become a Certified Financial Planner (CFP).
Private Equity and Hedge Funds: These are two areas that have come in limelight in the recent years. Hedge funds use advanced investment strategies to invest their money with the intent of generating high returns. Some of these strategies include leveraged buyouts, derivative positions, etc. Private equity firms focus mainly on investing directly in companies with high growth potential. They typically stay investing for 5-7 years before exiting.
Equity Research: Equity research is one of the most common career option offered to MBA pass outs. This involves researching on various stocks, creating research reports and providing buy/sell side recommendations. Equity research jobs are available in both sell-side (e.g., brokerage firms) and buy-side firms (e.g., mutual funds, hedge funds)
Project Finance: Project finance involves raising money for large projects such as infrastructure and other industrial projects. This involves understanding the project, conducting feasibility studies, and finding equity and lending partners for the project.
Risk Management: A firm or a financial institute is exposed to a variety of risks in their normal course of business. The role of the risk management department is to identify, measure and manage these risks as per the risk management objectives of the firm. The risk managers use various qualitative and quantitative techniques to do their job. For example, after a risk has been identified and measured, the firm may decide to hedge it using derivatives or other techniques. Banks also have to measure risk and keep appropriate capital required as per the Basel II (and Basel III) capital adequacy guidelines.
Corporate Banking: Corporate banking, as the name suggests, covers a variety of banking services designed for businesses and institutions. This involves services such as bank accounts, working capital loans, asset financing, cash management, and more.
Retail Banking: Retail banking, also called consumer banking, refers to banking for individuals. This side of banking deals with meeting the needs of individuals, for example savings and deposits, credit cards, and various types of loans such as personal loans, car loans, and home loans. Within retail banking, you may be on the operations side performing roles such as teller, customer services, loan officer, etc. Alternatively you may be a part of the sales team that looks after selling the retail banking products.
Corporate Finance: As a corporate finance professional you work with a company and help it identify and meet its financing needs. You are involved in making most of the major financing decisions of the company related to capital investments as well as working capital needs.