Guide to College Majors in Finance
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What is Finance?
While an accounting degree is meant to cover a diverse range of business functions in nearly any industry, a degree in finance is narrower in focus. Financial accounting is separate from general accounting, as it serves the decision makers outside of the organization, such as banks, government agencies, stockholders and suppliers.
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A successful career in finance calls for a unique set of skills; it's ideally suited for you if you are outgoing and inquisitive by nature. You'll make use of your mathematical aptitude and ability to take your organization's or client's goals, resources and options into consideration while making your suggestions for their continued financial growth. This is one area where employment opportunities can be influenced by your GPA and previous professional success.
Career Education in Finance
Undergraduate and graduate degree and certificate programs
Your finance curriculum will provide you with fundamental financial management tools to succeed in analyzing and executing the financial aspects of managerial decisions. The minimum level of education required for finance careers is the bachelor's degree. Popular online college courses in finance focus on technology, ethics, e-business, critical thinking, problem solving, research methods and statistical analysis. Careers in financial management generally require a master's degree or MBA (Master of Business Administration) --some firms hiring financial analysts require one. A bachelor's degree is required for CFA certification, as outlined below.
Obtaining a master's degree in finance is commonly done while working full time, as a way to advance your professional credentials and in conjunction with certification as a Certified Public Accountant (CPA), Certified Management Accountant (CMA), or Chartered Financial Analyst (CFA). Online college classes are an increasingly popular way for financial professionals to accomplish this goal.
MBA programs with a finance specialization consistently update the curriculum to retain current market relevancy. Ph.D. programs focus on greater understanding of leadership and organizational change, knowledge and learning management, high level decision-making, and finance in modern enterprise. Doctorate programs generally have a short residency requirement.
What can you do with a College Major in Finance?
Career options for aspiring finance professionals
Job prospects in finance are expected to grow faster than average for the next 10 years. The opportunities with a finance degree span many areas including corporate and international financial management, personal financial planning and investment services. Brokerage firms, commercial and investment banks, insurance companies, and other financial intermediary companies employ finance graduates.
With a finance degree, you will be equipped with tools for understanding the function and applications of financial markets and the acquisition and allocation of funds for public and private sectors in domestic and international organizations. You'll learn to access and utilize financial information.
Finance Careers
Financial analysts play an integral role in today's competitive economy. Since the 1970s, job opportunities in finance and banking have flourished, due to the increasing complexity of investment options. A financial analyst will research a client's or organization's financial status, including their history, risk tolerance, and current expenditures and investments. They make recommendations based on financial goals and business environments.
Specializations within the financial analyst trade include budget analyst, credit analyst, investment analyst, merger and acquisition analyst, money market analyst, ratings analyst, risk analyst, tax analyst, treasury analyst and personal financial advisors. There are currently over 230,000 financial analysts and personal financial advisors working in the U.S., making between $29,500 to 55,000 to $107,000 per year, depending on their industry and professional status.
If you work in financial consulting, your main role will be to provide advice on securities pricing, strategies for creating shareholder value, business valuation, economic forecasts and analysis, and input into treasury management.
As a finance manager, you will direct financial reporting, investment activities, and cash management strategies at any number of professional or government organizations. Median salaries in 2002 were about $73,000 with the top 10% earning over $142,000. Financial management calls on your creative thinking and your ability to see the broad business picture and then direct your team accordingly.
There is a tremendous range of opportunities in financial consulting. While the banking sector continues to consolidate, more people are employed in commercial banking than any other part of the financial services industry.
A career in financial consulting means you'll work for a company to find the money to run the business, grow it, make acquisitions, plan for its financial future and manage any cash on hand. You might work for a large multinational company or a smaller firm with high growth prospects. The key to performing well is to work with long-term goals. Many people think that corporate finance jobs are the most desirable in the field. As a financial officer, you'll concentrate on areas such as liquidity, flexibility, compliance with laws and regulatory support.
In investment banking, finance professionals work within companies and governments to issue securities, help investors trade securities, manage financial assets, and provide financial advice. Smaller firms may be oriented toward bond-trading, M&A advisory, technical analysis or program trading.
Money managers hold stocks and bonds for institutional clients and are on the buy side of Wall Street. Money managers must be proficient in the latest sophisticated quantitative methodology. Many people cross over into money management after years of experience in selling positions in investment banks. A solid background in portfolio theory, fixed income investments, and CFA certification is required.
Financial planners concentrate on helping individuals with their financial futures. This work requires excellent interpersonal skills. A good financial planner understands investments, taxes, estate planning issues, and knows how to listen. You can practice within a company or as a sole proprietor, if you have strong entrepreneurial skills.
The demand within the trillion-dollar insurance industry for finance degree graduates is also strong as our population gets older and wealthier. Jobs in insurance involve helping individuals and businesses manage risk to protect themselves from catastrophic losses and to anticipate potential risk areas. You help clients understand their insurance needs, explain their options to them and assist with the selection of appropriate policies. Career options in insurance include underwriter, sales representative, asset manager, and customer service rep. The median salary for insurance agents and brokers in 2000 was $42,000.
As an underwriter, you would require further training and credentials such as an AU (Associate in Commercial Underwriting), an API (Associate in Personal Insurance), CPCU (Chartered Property and Casualty Underwriter), CLU (Chartered Life Underwriter), or RHU (Registered Health Underwriter) - depending on your area of specialization. Or you can train further to become an actuary.
Real estate careers such as title insurance, construction, mortgage banking, property management, real estate appraisal, brokerage and leasing, and real estate development are also open to finance graduates. Over a third of the world's wealth involves real estate. You need a regional license to be a real estate broker, and many employers prefer to hire college graduates with a financial education background.
Certification and Licensure
Certification is recommended in finance. A CFA (Chartered Financial Analyst) designation is sponsored by the CFA Institute. To qualify for the exam, you need a bachelor's degree and three years of professional experience in a relevant field. To earn your certification, you'll take three rigorous exams over the course of three years (usually while working in your first job).
Personal financial advisors are encouraged and sometimes required to seek their Certified Financial Planner (CFP) certification. The requirements include academic credits, passing a comprehensive set of exams, and following a strict code of ethics. A certification as a Chartered Financial Consultant (ChFC) is also useful in this field.
For sales in stocks, bonds, mutual funds, insurance and real estate, additional professional licenses are required.
Financial managers can obtain their Certified Cash Manager credentials through the Association for Financial Professionals, by passing online exams combined with at least two years of professional experience. In the financial institution industry, managers start from the Credit Business Associate designation, to Credit Business Fellow and then to Certified Credit Executive.
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