Overview
Financial careers deal with the management of money involving individuals (personal finance), governments (public finance), and businesses (corporate finance). Banks, financial institutions, and finance departments within organizations deal with various finance related topics such as raising money for growth (through debt and equity), managing money (investment, budgeting), as well as a series of other activities such as financial operations, risk, tax, audit, compliance, research, etc.
There are a wide variety of roles that undergraduate students can pursue in the finance industry including:
- Investment Banking - provide financial advisory, Mergers & Acquisitions (M&A), and capital raising activities.
- Sales - sales force that calls on institutional and high-net-worth investors to suggest trading ideas and take orders.
- Trading - traders buy and sell stocks, bonds, currencies, futures, and derivatives for the investment bank.
- Research - make recommendations whether investors should buy, hold, or sell a given security and assist traders.
- Capital Markets - involves the design and origination of securities.
- Corporate Finance - involves all of the departments that help with the financial procedures of a corporation. This can include Capital Budgeting, Accounting, M&A, Financial Risk Management, Investments, Investor Relations, and Cash Management.
- Investment Management - professional management of various securities (shares, bonds and other securities) and assets (e.g., real estate) in order to meet specified investment goals for the benefit of the investors. Investors may be institutions (insurance companies, pension funds, corporations etc.) or private investors.
- Alternative Investments
- Hedge Funds - an aggressively managed portfolio of investments. Hedge fund managers are traders more than investors. They're looking to take a big position in an asset (stock, commodity or foreign currency).
- Private Equity Firms - these investors take investment money from large institutions, like public pension funds, and borrow cash to buy both private and public companies. Business experts turn around companies and then they sell.
- Venture Capital - money provided by investors to startup firms and small businesses. This is an important source of funding for startups that lack access to capital markets (no product, no sales, no business history).
- Leadership Development Programs - many large organizations have rotational programs focused on finance, industry economics and leadership. These two-year programs will typically have four different six-month rotations, allowing graduates to develop a multitude of technical skills and an understanding of a complex, global company.
Visit the Talk to a Career Adviser section to learn more detailed information on career options in finance.
Qualifications
Prospective finance professionals should have a strong familiarity with the financial markets and understand basic finance principles (time value of money, valuation, accounting) as well as the quantitative skills to perform financial analysis and build financial models. Depending on the role, analysts should expect to work extensively in Microsoft Excel and Microsoft PowerPoint.
Financial firms look for candidates to show academic achievement (GPA, SAT, difficult coursework), a history of leadership and impacts for organizations (work experience, student club leadership, sports teams, etc), and an interest and passion for the financial industry.
Things to Consider
The finance industry is incredibly competitive, especially obtaining an offer from investment banks, hedge funds, private equity firms, and venture capital firms. If you are interested in an internship or full time job in finance, you should start preparing as early as possible by researching the firms and developing contacts at the various companies. Most employers have on campus recruiting presentations, which is an important component of recruiting. Additionally, many prospective finance professionals have informational interviews at banks and other financial institutions to develop internal contacts and learn more about the firm. The Informational Interview (pdf) section provides more about informational interviews visit.
Internet Resources
General Finance Resources
Professional Organizations
Books on Finance/Banking/Investing
- Dictionary of Finance and Investment Terms (Barron's Financial Guides, Downes and Goodman)
- Principles of Corporate Finance (Brealey and Meyers)
- The Intelligent Investor (Graham)
- Irrational Exuberance (Shiller)
- The Theory of Investment Value (Williams)
- The Foundations of Finance (Fama)
- One Up On Wall Street (Lynch)
- Technical Analysis of the Futures Market (Murphy)
- The Alchemy of Finance (Soros)
