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Three Different Types of Career Paths in Finance

The field of finance offers wide-ranging career possibilities and strong potential for upward mobility. It continually challenges analytical, problem solving, communication, and creative skills. Factors like global business trends, advancing technologies, regulatory changes, and economic cycles dynamically influence its practices and practitioners. There’s no standing still or “status quo” in this field of movers and shakers.

The focus of this article is to separate finance into three more specific categories to help you understand the many career possibilities. If you choose to pursue finance, you’ll want to select an area of specialization ahead of time so that you prepare yourself with the best possible courses and foundational experiences.

Three Different Types of Careers in Finance

The field of finance can be categorized into three classifications: personal finance, corporate finance, and public finance.

Personal Finance

1) Personal finance is aimed at helping individuals and families make choices about their financial needs at various life stages. It involves guiding people in investment decisions, banking decisions, insurance decisions, retirement planning, tax and estate planning, employee benefit choices, education funding, and financing personal purchases like real estate, vehicles, and other high-ticket items.

If you choose this area of finance, you might be employed as a personal financial planner, an investment representative, a benefit specialist, an eldercare specialist, an estate planner, an insurance or real estate agent, a bank loan officer, or a branch manager. You will develop strong bonds with people as you earn their trust and help guide their financial futures. You might need to take one or more licensing exams to legally work in the field and show minimum competency and knowledge of the laws that apply.

In the investment industry, personal finance is often called wealth management. This business focuses on retail investors, or individuals that seek advice for investing and other financial decisions. In brokerage firms, wealth management sometimes focuses on high-net-worth clients, but services are often available for the less wealthy as well.

Requirements for a Job in Personal Finance

If you are attracted to a career in personal finance, you will typically need a bachelor’s degree to get hired. While employers usually don’t require a specific educational background, the following degrees are recommended:

  • Finance
  • Economics
  • Accounting
  • Business administration
  • Mathematics
  • Law

Courses on investments, taxation, financial planning, estate planning, and risk management provide excellent background. Some colleges and universities feature financial planning degrees and “junior advisor” programs that prepare candidates exceptionally well for establishing a planning practice.

As mentioned, various types of licenses, registrations, and ongoing continuing education requirements will usually apply in this career path.

Corporate Finance

2) Corporate finance is focused on managing the finances of a business, small or large, and providing funding for its activities. Key functions of persons involved in corporate finance include:

  • Studying and forecasting economic trends
  • Raising capital through investment banking activities
  • Advising institutions like mutual funds, hedge funds, life insurance companies, and pension funds with regard to the purchase of investment services and products
  • Financial risk management
  • Preparing and evaluating company financial reports
  • Implementing financial strategies to maximize shareholder value
  • Managing company funds and investment portfolios
  • Merger and acquisition activities

Popular careers in the corporate finance field include financial analyst, investment banker, public accountant, risk manager, corporate controller, and investor relations officer. Corporate finance jobs are sometimes touted as the most desirable in the entire field of finance because of compensation, travel benefits, and the significance of the business problems that are part of the day to day.

Requirements for a Job in Corporate Finance

A bachelor’s degree is a requirement for corporate finance positions, and for more senior and highly compensated positions, an MBA is preferred. Undergraduate degrees in any of the following fields are usually appropriate:

  • Accounting
  • Finance
  • Economics
  • Statistics
  • Sociology
  • Public administration
  • Health science
  • Political science

Candidates should be able to analyze a corporation’s growth potential, profitability, industry niche, and future projections and be able to read and understand annual reports, balance sheets, income statements, and cash flows. Background in public policy, international trade, and language and cultural fluency, along with business skills, is a winning combination for many corporate finance positions. College internships with banks and financial firms are a significant advantage.

Some jobs in this sector will require certifications, licenses, and registrations in addition to education and experience.     

Public Finance

3) Public finance is concerned with the financial health and dealings of states and other public entities like cities, counties, school districts, or government agencies. This field is also known as municipal finance.

Professionals working in public finance careers have duties that include:

  • Designing and reviewing government financial systems to improve efficiency
  • Monitoring collection of taxes and distribution of government funds
  • Managing budgets and investments of state and local governments
  • Accounting for government spending
  • Structuring and marketing the issuance of tax-exempt securities to finance public projects like hospitals, airports, schools, mass transit, water treatment, and power plants
  • Ensuring ongoing health of public transportation, schools, healthcare, infrastructure, and other necessities

Requirements for a Job in Public Finance

When it comes to academic preparation, a bachelor’s degree in finance, accounting, economics, or business administration is the minimum for jobs in public finance. A master’s degree in business administration, economics, finance, international business, or risk management is often preferred.

Internships are one of the most efficient ways to gain an advantage in obtaining a public finance job. The field is highly competitive, and often “who you know” matters in getting hired in this field. These jobs will also require ongoing certifications in addition to specialized licensing and registrations.

Is a Career in Finance Right for You?

If you are motivated by the challenges of a fast-paced career that relies on innovative problem solving, strong communication, leadership, mathematics, and statistics, you should investigate a career in finance. Besides the career diversity, finance offers:

  • Growing job prospects. The Bureau of Labor Statistics projects that jobs in finance are growing faster than the average for employment in the United States. The growth in careers between 2018 and 2028 is estimated to average 7% in the field overall with growth of as much as 14% in financial management; 23% in financial analysis; and 32% in financial advising. The field also proves to be somewhat recession-resistant, as job opportunities continue to present themselves even in times of economic downturn.
  • Higher than average financial rewards. The median annual wage for business and financial occupations was $68,350 in May 2018, which was higher than the median annual wage of $38,640 for all occupations. Of course, salary varies by job title and experience, but in general, finance jobs offer attractive salary opportunities with significant growth potential.

Check back often for more information about financial careers from Knopman Marks. Give yourself a distinct advantage by learning more about the SIE Exam and how it can jumpstart your career in finance.

Marcia Larson is Vice President, Faculty, at Knopman Marks Financial Training, New York, NY. She has extensive experience in financial licensing and regulatory training, having authored, developed and presented courseware for numerous securities and insurance exam preparation and continuing education and compliance programs. Before joining Knopman Marks, Marcia was Director of Annuity Products and Business Development at CUNA Mutual Group, where she developed and marketed industry-leading annuity products and retirement solutions and implemented distribution relationships. She was previously VP, Securities Products for Kaplan Financial, managing securities training products and subsequently, international training and businesses development. Marcia has trained thousands of financial industry exam candidates throughout their careers, and also college students as an adjunct professor. Marcia was a summa cum laude graduate of Wartburg College with degrees in Business Administration and Piano Performance. Marcia also holds the designations of Chartered Financial Consultant® (ChFC®), Chartered Life Underwriter (CLU®), Certified Employee Benefit Specialist (CEBS), and Fellow Life Management Institute™ (FLMI®). She currently teaches the SIE, Series 6, 7, 24, 50, 52, 63, 65, and 66 exams.