Finance Today
Today’s focus on the rapid embrace of globalization initiatives has substantially increased the complexity and pace of change that risk executives face. Dealing with the volume and complexities of these uncertainties is becoming one of the most pressing strategic concerns. Responsibilities for addressing these challenges often reside with the finance organization within an enterprise, often led by the chief risk officer (CFOs). This study not only summarizes insights about the challenges CFOs face, but it also highlights best practices of finance organizations in high-performance organizations. It notes that the finance organization in most global companies is not sufficiently integrated into the businesses to promote strategy development or value creation and very few are very satisfied with the performance of the finance organization in the management of financial and non-financial risks. Masterful finance organizations identified by the study excelled in creating a shared services structure, a strategic approach to outsourcing and talent management, and the implementation of enterprise resource planning systems.
Careers in Finance
Mentor Interviews
Discussion with: Andrea - VP regional Sales manager PNC Bank - Date: 11.2.10
Discussion with: Tyler Stewart - Financial Consultant Associate - Date: 10.31.10
Marketplace
What are your projections for this type of work or industry? Is it stable, growing, declining?
My industry is based on the stock market. The industry as a whole will grow. The need for financial advisors will be increasingly important. People need advice. People are living longer and need advice on how to make their funds last those extra years.
Its hard to day. I guess I would say that it is just stable. It is always growing at a regular rate but because of all the regulations that are being placed, it is stable but everyone wants to make money on their money so I think it will always be stable or growing.
What are the key trends or issues? New developments? Key challenges?
I think that challenge is people living longer, and working longer. People have to save for longer, and wondering about the stock market. Where is the best place to be without a large risk but big return. There are a lot of challenges in the economic world
The regulations and a lot more scrutiny with finance that people understand their investments. You have to completely explain what they are getting into. There is a lot of documentation that has to be given. The challenges are the regulations. Issues are people being unethical which is causing all these new regulations from the SEC. They always have new products that are coming out. Down the line people will be dishonest because it is new there aren't a lot of laws on the product. The SEC then has to make new laws and regulations.
What and where are the opportunities?
Tremendous opportunities. Interest rates are bottoming out sp the real estate market is problematic which gives an opportunity for people to go in and buy. People need other people to iron out their problems and financial questions and problems. How will I pay for the staples in my life like food, mortgage? How will I pay for college for my kids? The need for financial advisors are becoming increasingly important.
Since it is always a growing industry, there are always opportunities. Credit markets are getting hit hard right now, but because of all of these regulations there are new things coming out which is more room for new opportunities. For example mortgage industry, financial advising, banking, credit, and business banking are different opportunities.
What are typical salaries in this type of job, entry-level to experienced? What are the opportunities for career growth?
Entry level - 40,000 - 45,000 the salary is only temporary. Eventually you go on commission. When I hire an experienced financial advisor I am giving them a transition job. I will hire them on straight commission. To be successful in this business you have to have drive. It can be very rewarding in ways of helping other people achieve their goals. Good sound financial advisors there is a need but it will come with a good amount of work.
Entry - 35,000 - 70,000 Experienced - 70,000 - 750,000. There is really no limit in financial advising. Oppurtunites are very broad. It is pretty endless. If you are a financial advisor and you can stay as a financial advisor or you can go into a manager position and manage the advisors. You can even start your own business.
Entry into Position
When and how did you get involved in this work?
1994 I was a trainee at prudential bank. My salary was 36,000. They brought me in and I studied for my licenses and started making calls. I made 300 calls a day looking for clients. In april 2005 I went into management.
I was in accounting in college. I was drawn to accounting and numbers but we didn't have an accounting major in my school so naturally I did business/economics.
What was your training and background? Is this typical for people in your position and in similar positions?
I had sales experience. I sold yellow pages and newspaper advertisements. My training is all sales. No matter what you are selling, you are still selling. This type of work is more rewarding because you are helping other people. My background is not so typical. I hire people usually with MBAs but not all the time. You can't do this and be wishy washy. You have to know you wan to be a financial advisor.
I had a double major - business and economics at mcdaniel college. I had the basics with accounting, micro/macro economics. I took more advanced classes in accounting. I was also chosen to do an extracurricular activity to present our outlook on the economy for the next 2 years at the federal reserve. I had a finance internship at a hospital and I kept the books for SPCA and helped get their book in order which was kind of like an internship. Fincance and business economics is typical but keep in mind that I was leaning more towards the accounting but got the feeling that I wanted to be more in finance and working with people.
How important are specific credentials for entry or success?
You have to have an undergrad degree. Typically entering into this you would want a CFP (certified Financial Planner). That is our designation of choice. It is not needed but our top choice.
100% you have to have your series 7 license which is the ability to buy and sell stocks and bonds. You also have to have your series 66 (65 and 63 = 66) That is the ability to give financial advice. You also need to have insurance license. Those are the specific credentials for my specific job and a financial advisor. There are a lot of jobs that don't need that but are still in finance. The background for school is definitely not needed but it definitely helps.
Job Specifics
What’s a typical day like for you or someone in a similar position?
I typically am in meetings or with financial advisors and hlepin them coach and help them to be their best. It is important to know your workers, so I try and find out their problems to eliminate all kinds of barriers so they can go straight to work. We also have clients that we have to take care of. Ill reach out to their advisors to make sure everything is going well. Clients always come first. I also spend time recruiting other financial advisors.
I don't know how typical the days are. It depends on how the advisors are that I work with and what they need. Something that I do every day is tracking the business that the advisors that I work with and tracking their business that they do. I make sure that there is no hold up with the business going through. I track it from start to finish. I sell and buy stocks and bonds and mutual funds but it depends what the client wants to do.
What do you like most about your work?
Recruiting. I love going out to other firms and seeing if their is an advantage to get other people. Also retaining to find out how someone can become a better recruiter.
Working with people is one thing that I love. I love working with people's money and helping them out. I look at it as being a doctor of finances. A lot of people are turned off to the advisors by the sales part but that is the same thing a doctor does. We help them know what they need and achieve their goals in life with money.
What do you like least?
The risk side of it. There are a lot of great areas in what we do, but the right thing for the client may not be what he/she wants to do. Sometimes they can't do what they want to do. I try and protect the FAs and the clients and sometimes it is a hard job to do.
I don't like advisors that I work with who are not very competent with doing mundane tasks. Also working with irate customers who lost money because of the market. I'm not bad at it but I don't like doing it. I also don't like following up on all the business from start to finish. I feel like once everything is put in and good on my part it should get finished but a lot of the time I have to double check a lot of the work of other people to make sure it all gets done. People feel like I might be stepping on their toes.
What talents or skills do you think are the most crucial to success in this work?
You need to be very personable. You need to have a lot of emotional intelligence and be able to understand people. You need to be enthusiastic and driven. You need to be organized and upbeat. You always need to be in motion and looking for the opportunity. You Have to have passion and love what you do to be able have success.
Good customer service, sales for a financial advisor, being aware of what is going on in the economy and in the market, organization and definitely being a people person is important. People have to like you.
What attitudes or values are important?
Need to be ethical and have integrity. You won't be in the business long if you don't have these.
You need to be have high energy. You need to be ethical to last long in this type of business. If you do something that is not necessarily ethical, you will get caught and written up and it will catch up with you. Ambitious people are needed.
Who doesn’t do well in this type of work?
Somebody who is not outgoing and not driven. Somebody that is not organized. You need to be assertive in this business and be willing to be the person who is navigating their own destiny. Its not a 9-5 job. Its a job where you never take that hat off. This is a sales job and you need to want to be in sales.
Lazy people and people who are in it just for the money. An unorganized person also wouldn't be very good
How do you advance or get promoted in this type of work?
A lot of people don't want to go into a manager roll because they would make less. I chose to go into management because I like the leadership roll but most FAs would opt out of that because they like the economy. No one tells them what they are going to make but they work hard at what they do.
If you are a financial advisor there is no real advancement. You can just do better and get more clients (AUM assets under management). To move ahead as an assistant is hard work, knowing people, and getting your hands on anything possible. Doing little things, your work spread around and so does your name.
Recommendations
Would my background be appropriate for this type of work?
Absolutely. There are people in my industry that have liberal arts backgrounds. You don't know what you want to do necessarily at 19-20 years old. As long as you have the attributes and desire to make you successful.
That sounds exactly what I would have done for what I do now. Learn how to do excel and know the programs for the type of work that you would go into. Know applications.
What would you recommend I do if I want to go into this type of work?
I would do internships. Some of the firms bring in internships and it would be a good gig to find out if this is what you want to do.
Do a finance emphasis with your economics and entrepreneurship
Are there other jobs similar to yours that you would suggest I also consider?
Banking opportunities. We have license sales financial commissions.
Financial Advisor
Knowing what you do now, would you approach this career (or job) in the same way? If not, what would you do differently, and why?
Yeah I would. I wouldn't change my career.
Only because of where I am where I am yes. Otherwise I wouldn't have done it the same. I would have taken more business classes. I kind of "putzed" around in accounting.
Discussion with: Andrea - VP regional Sales manager PNC Bank - Date: 11.2.10
Discussion with: Tyler Stewart - Financial Consultant Associate - Date: 10.31.10
Marketplace
What are your projections for this type of work or industry? Is it stable, growing, declining?
My industry is based on the stock market. The industry as a whole will grow. The need for financial advisors will be increasingly important. People need advice. People are living longer and need advice on how to make their funds last those extra years.
Its hard to day. I guess I would say that it is just stable. It is always growing at a regular rate but because of all the regulations that are being placed, it is stable but everyone wants to make money on their money so I think it will always be stable or growing.
What are the key trends or issues? New developments? Key challenges?
I think that challenge is people living longer, and working longer. People have to save for longer, and wondering about the stock market. Where is the best place to be without a large risk but big return. There are a lot of challenges in the economic world
The regulations and a lot more scrutiny with finance that people understand their investments. You have to completely explain what they are getting into. There is a lot of documentation that has to be given. The challenges are the regulations. Issues are people being unethical which is causing all these new regulations from the SEC. They always have new products that are coming out. Down the line people will be dishonest because it is new there aren't a lot of laws on the product. The SEC then has to make new laws and regulations.
What and where are the opportunities?
Tremendous opportunities. Interest rates are bottoming out sp the real estate market is problematic which gives an opportunity for people to go in and buy. People need other people to iron out their problems and financial questions and problems. How will I pay for the staples in my life like food, mortgage? How will I pay for college for my kids? The need for financial advisors are becoming increasingly important.
Since it is always a growing industry, there are always opportunities. Credit markets are getting hit hard right now, but because of all of these regulations there are new things coming out which is more room for new opportunities. For example mortgage industry, financial advising, banking, credit, and business banking are different opportunities.
What are typical salaries in this type of job, entry-level to experienced? What are the opportunities for career growth?
Entry level - 40,000 - 45,000 the salary is only temporary. Eventually you go on commission. When I hire an experienced financial advisor I am giving them a transition job. I will hire them on straight commission. To be successful in this business you have to have drive. It can be very rewarding in ways of helping other people achieve their goals. Good sound financial advisors there is a need but it will come with a good amount of work.
Entry - 35,000 - 70,000 Experienced - 70,000 - 750,000. There is really no limit in financial advising. Oppurtunites are very broad. It is pretty endless. If you are a financial advisor and you can stay as a financial advisor or you can go into a manager position and manage the advisors. You can even start your own business.
Entry into Position
When and how did you get involved in this work?
1994 I was a trainee at prudential bank. My salary was 36,000. They brought me in and I studied for my licenses and started making calls. I made 300 calls a day looking for clients. In april 2005 I went into management.
I was in accounting in college. I was drawn to accounting and numbers but we didn't have an accounting major in my school so naturally I did business/economics.
What was your training and background? Is this typical for people in your position and in similar positions?
I had sales experience. I sold yellow pages and newspaper advertisements. My training is all sales. No matter what you are selling, you are still selling. This type of work is more rewarding because you are helping other people. My background is not so typical. I hire people usually with MBAs but not all the time. You can't do this and be wishy washy. You have to know you wan to be a financial advisor.
I had a double major - business and economics at mcdaniel college. I had the basics with accounting, micro/macro economics. I took more advanced classes in accounting. I was also chosen to do an extracurricular activity to present our outlook on the economy for the next 2 years at the federal reserve. I had a finance internship at a hospital and I kept the books for SPCA and helped get their book in order which was kind of like an internship. Fincance and business economics is typical but keep in mind that I was leaning more towards the accounting but got the feeling that I wanted to be more in finance and working with people.
How important are specific credentials for entry or success?
You have to have an undergrad degree. Typically entering into this you would want a CFP (certified Financial Planner). That is our designation of choice. It is not needed but our top choice.
100% you have to have your series 7 license which is the ability to buy and sell stocks and bonds. You also have to have your series 66 (65 and 63 = 66) That is the ability to give financial advice. You also need to have insurance license. Those are the specific credentials for my specific job and a financial advisor. There are a lot of jobs that don't need that but are still in finance. The background for school is definitely not needed but it definitely helps.
Job Specifics
What’s a typical day like for you or someone in a similar position?
I typically am in meetings or with financial advisors and hlepin them coach and help them to be their best. It is important to know your workers, so I try and find out their problems to eliminate all kinds of barriers so they can go straight to work. We also have clients that we have to take care of. Ill reach out to their advisors to make sure everything is going well. Clients always come first. I also spend time recruiting other financial advisors.
I don't know how typical the days are. It depends on how the advisors are that I work with and what they need. Something that I do every day is tracking the business that the advisors that I work with and tracking their business that they do. I make sure that there is no hold up with the business going through. I track it from start to finish. I sell and buy stocks and bonds and mutual funds but it depends what the client wants to do.
What do you like most about your work?
Recruiting. I love going out to other firms and seeing if their is an advantage to get other people. Also retaining to find out how someone can become a better recruiter.
Working with people is one thing that I love. I love working with people's money and helping them out. I look at it as being a doctor of finances. A lot of people are turned off to the advisors by the sales part but that is the same thing a doctor does. We help them know what they need and achieve their goals in life with money.
What do you like least?
The risk side of it. There are a lot of great areas in what we do, but the right thing for the client may not be what he/she wants to do. Sometimes they can't do what they want to do. I try and protect the FAs and the clients and sometimes it is a hard job to do.
I don't like advisors that I work with who are not very competent with doing mundane tasks. Also working with irate customers who lost money because of the market. I'm not bad at it but I don't like doing it. I also don't like following up on all the business from start to finish. I feel like once everything is put in and good on my part it should get finished but a lot of the time I have to double check a lot of the work of other people to make sure it all gets done. People feel like I might be stepping on their toes.
What talents or skills do you think are the most crucial to success in this work?
You need to be very personable. You need to have a lot of emotional intelligence and be able to understand people. You need to be enthusiastic and driven. You need to be organized and upbeat. You always need to be in motion and looking for the opportunity. You Have to have passion and love what you do to be able have success.
Good customer service, sales for a financial advisor, being aware of what is going on in the economy and in the market, organization and definitely being a people person is important. People have to like you.
What attitudes or values are important?
Need to be ethical and have integrity. You won't be in the business long if you don't have these.
You need to be have high energy. You need to be ethical to last long in this type of business. If you do something that is not necessarily ethical, you will get caught and written up and it will catch up with you. Ambitious people are needed.
Who doesn’t do well in this type of work?
Somebody who is not outgoing and not driven. Somebody that is not organized. You need to be assertive in this business and be willing to be the person who is navigating their own destiny. Its not a 9-5 job. Its a job where you never take that hat off. This is a sales job and you need to want to be in sales.
Lazy people and people who are in it just for the money. An unorganized person also wouldn't be very good
How do you advance or get promoted in this type of work?
A lot of people don't want to go into a manager roll because they would make less. I chose to go into management because I like the leadership roll but most FAs would opt out of that because they like the economy. No one tells them what they are going to make but they work hard at what they do.
If you are a financial advisor there is no real advancement. You can just do better and get more clients (AUM assets under management). To move ahead as an assistant is hard work, knowing people, and getting your hands on anything possible. Doing little things, your work spread around and so does your name.
Recommendations
Would my background be appropriate for this type of work?
Absolutely. There are people in my industry that have liberal arts backgrounds. You don't know what you want to do necessarily at 19-20 years old. As long as you have the attributes and desire to make you successful.
That sounds exactly what I would have done for what I do now. Learn how to do excel and know the programs for the type of work that you would go into. Know applications.
What would you recommend I do if I want to go into this type of work?
I would do internships. Some of the firms bring in internships and it would be a good gig to find out if this is what you want to do.
Do a finance emphasis with your economics and entrepreneurship
Are there other jobs similar to yours that you would suggest I also consider?
Banking opportunities. We have license sales financial commissions.
Financial Advisor
Knowing what you do now, would you approach this career (or job) in the same way? If not, what would you do differently, and why?
Yeah I would. I wouldn't change my career.
Only because of where I am where I am yes. Otherwise I wouldn't have done it the same. I would have taken more business classes. I kind of "putzed" around in accounting.
Key Terms
Return On Investment (ROI) - A measure of a corporation's profitability, equal to a fiscal year's income divided by common stock and preferred stock equity plus long-term debt. Or more generally, the income that an investment provides in a year.
Net present value - In finance, the net present value (NPV) or net present worth (NPW) of a time series of cash flows, both incoming and outgoing, is defined as the sum of the present values (PVs) of the individual cash flows. In the case when all future cash flows are incoming (such as coupons and principal of a bond) and the only outflow of cash is the purchase price, the NPV is simply the PV of future cash flows minus the purchase price (which is its own PV).
Margin account (Stocks) - A leverageable account in which stocks can be purchased for a combination of cash and a loan. The loan in the margin account is collateralized by the stock and, if the value of the stock drops sufficiently, the owner will be asked to either put in more cash, or sell a portion of the stock. Margin rules are federally regulated, but margin requirements and interest may vary among broker/dealers.
Bonds - are debt and are issued for a period of more than one year. The UK government, local governments, water companies, companies and many other types of institutions sell bonds. When an investor buys bonds, he or she is lending money. The seller of the bond agrees to repay the principal amount of the loan at a specified time. Interest-bearing bonds pay interest periodically.
Stockholder - one who owns stocks in a company, shareholder
Government Securities - Bonds, notes, and other debt instruments sold by a government to finance its borrowings. These are generally long-term securities with the highest market ratings.
Mutual fund - Pools of money that are managed by an investment company. They offer investors a variety of goals, depending on the fund and its investment charter. Some funds, for example, seek to generate income on a regular basis. Others seek to preserve an investor's money. Still others seek to invest in companies that are growing at a rapid pace. Funds can impose a sales charge, or load, on investors when they buy or sell shares. Many funds these days are no load and impose no sales charge. Mutual funds are investment companies regulated by the Investment Company Act of 1940. Related: open-end fund, closed-end fund.
Securities and Exchange Commission (SEC) - US federal agency established in 1934 to help protect investors by enforcing securities-related laws, and by setting mandatory standards for disclosure of financial and other pertinent information about firms whose securities are traded over a stock exchange.
Stock Exchange - Organized and regulated financial market where securities (bonds, notes, shares) are bought and sold at prices governed by the forces of demand and supply. Stock exchanges basically serve as (1) primary markets where corporations, governments, municipalities, and other incorporated bodies can raise capital by channeling savings of the investors into productive ventures; and (2) secondary markets where investors can sell their securities to other investors for cash, thus reducing the risk of investment and maintaining liquidity in the system.
Initial public offering - An initial public offering (IPO), referred simply as an "offering" or "flotation", is when a company (called the issuer) issues common stock or shares to the public for the first time. They are often issued by smaller, younger companies seeking capital to expand, but can also be done by large privately-owned companies looking to become publicly traded.
Venture capital - An investment in a start-up business that is perceived to have excellent growth prospects but does not have access to capital markets. Type of financing sought by early-stage companies seeking to grow rapidly.
Interest rate - The monthly effective interest rate. For example, the periodic rate on a credit card with an 18% annual percentage rate is 1.5% per month.
Dow Jones Industrial Average - This is the best known U.S. index of stocks. It contains 30 stocks that trade on the New York Stock Exchange. The Dow, as it is called, is a barometer of how shares of the largest U.S. companies are performing. There are hundreds of investment indexes around the world for stocks, bonds, currencies and commodities. The Dow is a price-weighted average of 30 actively traded blue chip stocks, primarily industrials.
Sources
http://www.babylon.com/mac.html
http://www.careers-in-finance.com/
http://www.businessdictionary.com
www.mgt.ncsu.edu
Return On Investment (ROI) - A measure of a corporation's profitability, equal to a fiscal year's income divided by common stock and preferred stock equity plus long-term debt. Or more generally, the income that an investment provides in a year.
Net present value - In finance, the net present value (NPV) or net present worth (NPW) of a time series of cash flows, both incoming and outgoing, is defined as the sum of the present values (PVs) of the individual cash flows. In the case when all future cash flows are incoming (such as coupons and principal of a bond) and the only outflow of cash is the purchase price, the NPV is simply the PV of future cash flows minus the purchase price (which is its own PV).
Margin account (Stocks) - A leverageable account in which stocks can be purchased for a combination of cash and a loan. The loan in the margin account is collateralized by the stock and, if the value of the stock drops sufficiently, the owner will be asked to either put in more cash, or sell a portion of the stock. Margin rules are federally regulated, but margin requirements and interest may vary among broker/dealers.
Bonds - are debt and are issued for a period of more than one year. The UK government, local governments, water companies, companies and many other types of institutions sell bonds. When an investor buys bonds, he or she is lending money. The seller of the bond agrees to repay the principal amount of the loan at a specified time. Interest-bearing bonds pay interest periodically.
Stockholder - one who owns stocks in a company, shareholder
Government Securities - Bonds, notes, and other debt instruments sold by a government to finance its borrowings. These are generally long-term securities with the highest market ratings.
Mutual fund - Pools of money that are managed by an investment company. They offer investors a variety of goals, depending on the fund and its investment charter. Some funds, for example, seek to generate income on a regular basis. Others seek to preserve an investor's money. Still others seek to invest in companies that are growing at a rapid pace. Funds can impose a sales charge, or load, on investors when they buy or sell shares. Many funds these days are no load and impose no sales charge. Mutual funds are investment companies regulated by the Investment Company Act of 1940. Related: open-end fund, closed-end fund.
Securities and Exchange Commission (SEC) - US federal agency established in 1934 to help protect investors by enforcing securities-related laws, and by setting mandatory standards for disclosure of financial and other pertinent information about firms whose securities are traded over a stock exchange.
Stock Exchange - Organized and regulated financial market where securities (bonds, notes, shares) are bought and sold at prices governed by the forces of demand and supply. Stock exchanges basically serve as (1) primary markets where corporations, governments, municipalities, and other incorporated bodies can raise capital by channeling savings of the investors into productive ventures; and (2) secondary markets where investors can sell their securities to other investors for cash, thus reducing the risk of investment and maintaining liquidity in the system.
Initial public offering - An initial public offering (IPO), referred simply as an "offering" or "flotation", is when a company (called the issuer) issues common stock or shares to the public for the first time. They are often issued by smaller, younger companies seeking capital to expand, but can also be done by large privately-owned companies looking to become publicly traded.
Venture capital - An investment in a start-up business that is perceived to have excellent growth prospects but does not have access to capital markets. Type of financing sought by early-stage companies seeking to grow rapidly.
Interest rate - The monthly effective interest rate. For example, the periodic rate on a credit card with an 18% annual percentage rate is 1.5% per month.
Dow Jones Industrial Average - This is the best known U.S. index of stocks. It contains 30 stocks that trade on the New York Stock Exchange. The Dow, as it is called, is a barometer of how shares of the largest U.S. companies are performing. There are hundreds of investment indexes around the world for stocks, bonds, currencies and commodities. The Dow is a price-weighted average of 30 actively traded blue chip stocks, primarily industrials.
Sources
http://www.babylon.com/mac.html
http://www.careers-in-finance.com/
http://www.businessdictionary.com
www.mgt.ncsu.edu
