Industry Employment Outlook – Financial Services


Opportunities in Financial Services  |  Companies Are Investing in Veterans’ Futures

Published in the January/February 2013 issue of print Search & Employ®

Don’t feel alone if you’re getting dizzy trying to follow the news about the U.S. economy. One day things seem to be going in the right direction, and the next day the sky is falling. It’s been hard to tell from day to day whether 2013 will be good, bad, or indifferent.

But there is reason for optimism, according to economists surveyed in the fourth quarter of 2012 by the National Association for Business Economics (NABE). The economists foresee moderate growth in 2013, with little likelihood of another recession or an outbreak of inflation. They expect gross domestic product (GDP) to grow by 2.4%, adjusted for inflation.  Unemployment, they say, will decline slightly, and they expect business spending and housing starts to continue to rise.

Interesting to note: Economists surveyed by the NABE a year ago said almost exactly the same thing about 2012. This similarity suggests that the economic situation will not change much from 2012 to 2013.

Financial industry insiders are still cautiously optimistic about the hiring outlook for companies in that industry. Those firms are likely to be on the lookout for fixed-income traders, along with players in the high-yield and distressed debt markets. Risk managers also will continue to be popular with recruiters in 2013, as firms remain sensitive to potential losses caused by market volatility or credit exposure. Other experts predict robust hiring on trading desks, particularly in the fixed income, foreign exchange, and commodities markets.

In addition, huge Wall Street companies are hiring highly qualified college graduates very quickly, before even good-sized financial firms can get to those candidates. That was not seen during the recession.

Some of the hottest careers right now include financial analysis managers, senior compliance analysts, and senior auditors. Accounting clerks and billing and collection staff are also still in demand.

WHAT YOU NEED

Workers in financial occupations usually have at least a four-year college degree. A bachelor’s degree in business administration or a liberal arts degree with business administration courses is suitable, as is a bachelor’s degree in any field followed by a master’s degree in business administration (MBA). A major or courses in finance, accounting, economics, marketing, or a related field serve as excellent preparation. Experience in sales also is very helpful.

Additional training may improve a worker’s chances of advancing to higher level executive, administrative, managerial, and professional positions. Financial firms often provide opportunities and encourage employees to take classes offered by banking and financial-management affiliated organizations or other educational institutions. Many classes deal with just one aspect of finance and banking, such as accounting management, budget management, corporate cash management, financial analysis, international banking, and data processing systems procedures and management.

The financial industry depends heavily on technology, so an understanding of financial computer systems and software can greatly improve one’s advancement opportunities.

LOOKING AHEAD

According to projections in the Occupational Outlook Handbook, published by the U.S. Bureau of Labor Statistics (BLS), a part of the United States Department of Labor, wage and salary employment in the finance and insurance industry will grow by 9 percent between 2010 and 2020, resulting in 505,100 new jobs. Many of these jobs will represent a recovery of jobs lost during the recession.

The BLS expects employment in securities, commodity contracts, and other financial investments and related activities to expand by 25 percent by 2020. Factors contributing to the growth will include the wide range of financial assets available for trade, the number of baby boomers (people born between about 1943 and 1960) reaching retirement age and therefore seeking advice on retirement options, and the globalization of securities markets.

Employment in credit intermediation and related activities, an industry that includes banks, will grow by about 3 percent. Employment in insurance carriers and related activities will rise by 9 percent, adding 194,800 new jobs by 2020. Contributing factors will include the needs of an increasing population and the introduction of new insurance products.

FINANCIAL ANALYSTS

As the level of investment increases, the BLS expects employment of financial analysts to increase by 23 percent from 2010 to 2020 – much faster than the average for all occupations. Financial analystsguide businesses and individuals in making investment decisions. They assess the performance of stocks, bonds, commodity contracts, and other types of investments.

Financial analysts work for banks, insurance companies, mutual and pension funds, securities firms, the business media, and other businesses, making investment decisions or recommendations. The analysts study company financial statements and analyze commodity prices, sales, costs, expenses, and tax rates to determine a company’s value. They often meet with company officials to gain a better insight into the firms’ prospects and management.

Causes of the predicted growth will include increases in the complexity of investments, the global diversification of investments, and the amount of assets under management. As the number and type of mutual and hedge funds and the amount of assets invested in these funds increase, companies will need more financial analysts to research and recommend investments.

To become a financial analyst, a strong academic background is essential, including courses such as finance, accounting, and economics. A Chartered Financial Analyst (CFA) certification or a master’s degree in business or finance significantly improves an applicant’s prospects.

FINANCIAL MANAGERS

Almost every firm and government agency employs at least one financial manager. The duties include overseeing the preparation of financial reports, direct investment activities, and the implementation of cash management strategies. The duties with the managers’ specific titles, which include controller, treasurer or finance officer, credit manager, cash manager, risk and insurance manager, and manager of international banking.

Financial institutions such as commercial banks, savings and loan associations, credit unions, and mortgage and finance companies employ additional financial managers. Those personnel oversee functions that include lending, trusts, mortgages, and investments; and programs that include sales, operations, and electronic financial services. These managers may solicit business, authorize loans, and direct the investment of funds.

Financial managers play an important role in mergers, consolidations, and global expansion. Those areas require extensive, specialized knowledge to reduce risks and maximize profit. Companies are increasingly hiring financial managers on a temporary basis to advise senior managers on such matters. In fact, some small firms contract out all of their accounting and financial functions.

A bachelor’s degree in finance, accounting, economics, or business administration is the minimum academic preparation for financial managers. Many employers now graduates with a master’s degree, preferably in business administration, finance, or economics.

The BLS expects employment of financial managers to grow by 9 percent from 2010 to 2020. Regulatory changes and the expansion and globalization of companies will increase the need for financial expertise and drive job growth. As the economy expands, both the growth of established companies and the creation of new businesses will spur demand for financial managers.

As with other managerial occupations, jobseekers are likely to face competition; the number of job openings is expected to be less than the number of applicants. Candidates with expertise in accounting and finance—particularly those with a master’s degree or certification—should enjoy the best job prospects. An understanding of international finance, derivatives, and complex financial instruments is important. Excellent communication skills are essential because financial managers must explain and justify complex financial transactions.

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GLOSSARY

Auditors review financial records to make sure that the records are accurate.

Commodities traders deal in contracts for bulk quantities of substances such as metals, crude oil and other energy sources, raw materials, agricultural products, and livestock and meat.

Compliance analysts work to ensure that their companies’ business practices comply with federal, state, and local regulations.

Data model. One definition is: A set of rules for defining and organizing data needed and created by business processes. A business commonly designs a data model before creating a database involving the data.

Derivative is a financial instrument whose value depends on, or is derived from, one or more underlying assets. Examples of underlying assets include stocks, bonds, loans, currencies, and commodities.

Distressed-debt traders deal with bonds that are selling at a much lower price than the principal; investors say that such bonds are selling at much lower than “par value.”

Financial analysts guide businesses and individuals in making business decisions.

Fixed-income traders deal with investments such as bonds that provide a return as fixed payments of interest, followed by the return of the principal (the amount of the original investment) when the bond matures.

Foreign exchange (forex) traders deal in currencies of different countries, trading one currency for another—for example, trading United States dollars for Japanese yen.

Gross domestic product (GDP) is the output of goods and services produced by labor and property located in a particular place – for example, in the United States.

Hedge funds are private funds that are open to investors that meet certain regulations – depending on the type of fund, the investors can be  “accredited investors,” “qualified clients,” or “qualified purchasers.”

High-yield traders deal with bonds that pay much higher interest than higher-quality bonds (called investment-grade bonds), but which have a relatively high risk of default.

Mutual fund is an investment vehicle that pools money from many investors to buy securities.

Risk managers evaluate and control business risks.

Securities include stocks, bonds, and derivatives of stocks and bonds.

Trust is a legal entity that holds assets for the benefit of a specific person, group of people, or organization.

 

About the Author

This article was written by Jay Myers