Pros and Cons of a Financial Management Career
A career in financial management can lead to employment in a variety of industries. Evaluate the pros and cons of a financial management career to determine if it is the right opportunity for you.
|Pros of a Financial Management Career|
|High salary ($115,320 annual median salary in May 2014)*|
|Opportunities to work in many different industries*|
|Variety of specialization areas (can become a controller, treasurer, credit manager, risk manager, etc.)*|
|A bachelor's degree is the minimum education requirement*|
|Cons of a Financial Management Career|
|May require working long hours*|
|5 years of previous experience in a related position may be required (as an accountant, loan officer, financial analyst, etc.)*|
|Competitive job market (may need master's degree or certification to beat competition)*|
|Slow job growth overall (9% employment increase predicted to occur between 2012 and 2022)*|
Source: *U.S. Bureau of Labor Statistics.
Job Description and Duties
Financial managers work for businesses and help their companies meet long-term financial goals. In this position, specific job duties you may perform include preparing budgets, creating financial reports and developing investment strategies. You may search for ways to reduce costs by reviewing company financial reports and search for acquisition opportunities by analyzing market trends. You could work in a variety of industries, including manufacturing, government, healthcare and insurance.
Job Prospects and Salary Information
The U.S. Bureau of Labor Statistics (BLS) predicted that job growth for financial managers would be 9% between 2012 and 2022. Competition for available positions was expected to be keen. Financial managers with a master's degree, certification or a thorough knowledge of accounting and finance were expected to experience the greatest job opportunities. The median annual salary for financial managers was $115,320 in May 2014, according to the BLS.
Career Paths and Specializations
There are a number of positions you can choose from as a financial manager, including controller, treasurer and risk manager. Your duties and responsibilities will vary with your specialization. Controllers oversee the preparation of financial reports, which provide a summary of the organization's financial position. Reports can include balance sheets, future earnings forecasts and expense reports. Financial managers who oversee an organization's investments, maintain budgets and engage in activities to raise capital hold the title of treasurer. Managers who identify and minimize financial risk for an organization are risk managers.
What Are the Requirements?
The minimum requirement to become a financial manager is usually to earn a bachelor's degree in finance, economics, accounting or business administration. You typically must also have around 5 years of related work experience as an accountant, financial analyst, loan officer or other related position. Some employers offer financial management training programs to accomplished financial workers. In some cases, experience may be the most important requirement, while having a degree may be only preferred.
Job Postings from Real Employers
Financial manager positions are available in a number of industries. Experience is the most common requirement to gain employment. Below are some of the job listings available in March 2012:
- A Texas energy provider is searching for a regional finance manager to analyze profit and loss for the company and provide recommendations for improvement. A bachelor's degree in accounting or business management is preferred, while 3-5 years of experience in finance management and proficiency in Microsoft Excel are musts.
- An accounting company in Texas is seeking a risk manager to provide analysis for trading transactions and determine risks. The position also requires producing risk reports and developing risk management strategies. The applicant must have a degree in a quantitative major, such as finance, accounting, physics or math. In addition, the employer requires at least 3 years of experience as a risk manager in a trading environment.
- A Nebraska bank is looking for a branch manager to oversee activities of the bank, including business sales and development, budgeting and loan policy compliance. Building customer relationships is also an essential function of the position. A bachelor's degree in accounting, finance or business administration is preferred. Job candidates must have 3-5 years of sales experience, knowledge of banking services and management skills.
How to Stand Out in the Field
Because there is a lot of competition for financial manager positions, taking steps to make yourself stand out is important. According to the BLS, earning a master's degree or certification may help you fare better in the competitive job market. You could consider earning a master's degree in business administration, finance or economics. You could also consider earning the Chartered Financial Analyst (CFA) credential from the CFA Institute. To earn this credential, you must have at least a bachelor's degree and 4 years of work experience. You'll then need to pass 3 exams. While employers may not require the credential, it demonstrates knowledge of investments that can provide a leg up when searching for employment. If you want to be a treasurer, the Association for Financial Professionals offers the Certified Treasury Professional designation. This credential requires acquiring 2 years of related experience and passing an exam.
Alternative Career Paths
If you are interested in finance and accounting but the lengthy experience requirement is a deterrent, a career as an accountant or auditor might be a better fit. Accountants and auditors prepare financial records, calculate taxes owed and ensure that taxes are paid on time. They may also suggest ways to increase profits and reduce costs. A bachelor's degree in accounting or a related field is usually required to get started. You'll also need to earn the Certified Public Accountant (CPA) designation if your job requires filing reports with the Securities and Exchange Commission. Employment of accountants and auditors was predicted to increase by 16% between 2010 and 2020, according to the BLS. Accountants and auditors made a median annual wage of $63,000 in May 2011.
If you're seeking a finance job with a more favorable employment outlook, consider becoming a financial analyst. Employment of financial analysts was expected to increase by 23% between 2010 and 2020, which is faster than average according to the BLS. Financial analysts evaluate investments, such as stocks and bonds, to make recommendations to individuals and businesses. A bachelor's degree in finance, economics, business administration or a related area is the minimum education requirement, but a master's degree is often required by employers. Licensure may also be required. The BLS reported that financial managers earned a median annual salary of $76,000 in May 2011.