The financial sector is growing at a rate of 6% per annum. Indeed, this is the fastest-growing job sector in the world. According to experts, the demand for accountants and financial professionals will continue to rise in the future.
But the nature of the financial sector is also evolving. Due to the disruption of new technology, the world is rethinking finance. The creation of technologies such as cryptocurrency and crowdfunding has been a game-changer. Moreover, the industry uses the latest technology, such as Big Data and AI, to make better decisions and work efficiently.
Furthermore, the term finance itself covers many different processes. It refers to how we make money, how we save it, and how we manage it. These separate processes require varying professionals that fall into three broad categories. But the skillset is the same for all of them.
To make better choices for a future in finance, one must know the financial sector’s basics. But before we talk about the basics, let’s consider why so many graduates choose a career in this sector.
Why should you choose a career in finance?
According to the United States Bureau of Labor Statistics, accountants earn a median of $81,000 per year. Thus this is a very high paying sector. Not only that, this job market is only going to grow in the future. Indeed, according to experts, financial jobs will have a 12% growth rate by 2024. That means finance-based jobs are the fastest growing sectors in the world.
And this growth rate is not only limited to Northern America. Finance jobs are growing at a similar rate in other countries. Indeed, some areas such as Europe and Asia project even higher growth rates compared to other territories.
The financial sector is not limited to accountancy or investment. There are many more jobs you can choose from them as per your interests. Let’s analyze some of the most common job titles.
Accountants are the most commonly known professions in this sector. However, most people do not realize that there is not only one type of accountant. Most accountants are either in charge of the management of finances. So accountants can specialize in either managerial accounting or financial accounting. But what are the differences between when there is debate about financial accounting vs managerial accounting? And which is the best fit for you?
- Prerequisites: Managerial accounting is about monitoring a company’s accounts and providing data to managers for decision making. On the other hand, financial accountants focus merely on the financial aspect of the company. Furthermore, both jobs have different average salaries.
Top managerial accountants have master’s degrees in accounting, finance, or a related field. In contrast, financial accountants have a degree in finance with either a CPA or a CFA.
- Salary: The Bureau of Labor Statistics (BLS) estimates the average salary of financial accountants as $70,500 per annum. Comparatively, the median annual income of managerial accountants was $127,990. Both figures are from research from 2018, so the current figures might vary slightly. Considering the figures, it is self-evident that managerial accountants have a higher salary projection than financial accountants.
As the name suggests, financial analysts analyze the financial information of corporations. They monitor economic issues and report on new projects. Sometimes financial analysts might also have to investigate other companies’ financial well-being to report on investment opportunities. So a financial analyst must be well versed in the fundamentals of different industries. The growth rate for this job is 12%.
- Prerequisites: A financial analyst must hold a bachelor’s degree in a finance-related field. Best applicants might have certifications from a financial industry regulatory authority such as the Securities and Exchange Commission.
- Salary: Financial analysts earn $81,760 per year, according to the BLS figures, while the global median pay for financial analysts is $65,800.
Credit analysts look after the credit rating of their clients. They may work with individuals or companies, but usually, credit analysts work for banks. Furthermore, they make decisions on the creditworthiness of people by considering the average income of their clients.
- Prerequisite: Successful candidates hold undergraduate degrees in financing or accounts with a minor degree in statistics. Best candidates for the job must be well experienced, and they must be a licensed Chartered Financial Analyst. Most Credit Analysts work as Financial Risk Managers,
- Salary: The average salary for a credit analyst is approximately $69,000 per annum or $33.62 per hour. Frankfurt-based credit analysts are highly paid compared to their American counterparts as they earn $2,000 more.
They make investments on behalf of their client. Most portfolio managers have experience as financial analysts with insights into how to handle investment decisions. Often portfolio managers create a business strategy for their client in the preliminary stage. They might have an objective in mind for the business, such as growth or increasing value. After that, the manager will measure the risks and goals. Then they will make a strategic decision for their client. Portfolio managers are often in charge of large funds such as foundations or endowments.
- Prerequisites: They must have prior experience as a financial analyst. Furthermore, they must hold a master’s degree in finance or accounting. Best candidates for the position usually hold licenses from regulatory arthritis. They work as Chartered Market Technicians or Chartered Financial Planners.
- Salary: The salary for Portfolio managers is directly related to their experience in the field. Senior executives earn $123,000, while entry-level managers can expect a salary of $83,000 per hour.
Now for the most lucrative field of them all: the investment banker. The investment banker is in charge of raising money for their client. They may work for companies, organizations, or even governments. They are often in-charge of complicated financial matters and guide clients through expansion and acquisitions.
- Prerequisite: Investment bankers must have a bachelor’s degree in a finance-related field. Other requirements include licensing from the SEC.
- Salary: Investment bankers earn a whopping $104,970 per annum, according to the BLS. However, the job outlook is low at a mere 4%. Moreover, there is a lot of competition in this sector as the number of jobs is down.
Conclusion: What’s next?
Now that you know about the best and worst jobs in this sector, it is time to decide which career trajectory is right for you. After you have made your decision, you must start your finance career by following a few steps. Begin by getting the right degree. For most, holding a degree in finance is the fundamental prerequisite. Job experience and certifications come later. While this may seem overwhelming, it is prudent to remember not to lose sight of the end goal.