1. Get the right degree
You may think you don’t have to possess a degree to get a job in finance, but you’d be wrong. A bachelor’s degree is now the bare minimum requirement for almost any financial job. So, choose your degree and university carefully as some companies or banks limit their hiring to specific universities. Ensure the college or university you choose has a solid business school and a strong reputation in the finance industry. If you want to move to a new location, ensure that your university has a large footprint that is recognized in the area, you wish to find a job. While science and engineering degrees are popular options, especially outside the U.S., know that you will need to supplement your undergrad degree with further finance-related education. Earning a Master of Business Administration (MBA) is the most common and direct route. An MBA is also fast becoming a basic requirement to land a job on Wall Street.
2. Pursue a speciality
As you can see, finance is a wide-ranging industry and earning a degree targeted toward this area of business presents you with many options. Graduates can find jobs in accounting departments, finance departments, education, sales, banking, financial advising -the list of career options is endless. Most entities need someone with an analytical mind who can read financial data, interpret it and communicate findings and recommendations. During your education, you will have a few years to decide, but ensure you research the types of jobs you find most interesting. You should eventually specialize in one facet of finance as specialization is the best strategy for a long and successful career. This is where earning one or more specialized credentials—such as the Charted Financial Analyst® (CFA), Charter Market Technician® (CMT) or Financial Risk Manager (FRM) designations—can truly help you to stand out and advance in your career.
3. Get a job
After you’ve completed your post-secondary education, it’s now time to get a job. Remember, it’s not just what you know; it’s also who you know—so put much effort into building and leveraging personal connections by going to conferences, job fairs, educational seminars and other networking events. To continue to differentiate yourself, try to gain early career experience through internships. You may think it’s too early to start, but earning a professional credential can be a dramatic help in landing your first few jobs out of college. It may seem like your learning is done when school is, but it’s only beginning—those who succeed never stop learning.
Certification and Licensure
Employers are now looking for job candidates who have additional credentials that demonstrate they have the prerequisite skills and knowledge necessary for a specialized finance job. Every university is different in its teaching methods and materials, so professional credentials are a great way to level the playing field and ensure candidates have the basic knowledge to do the job on day one.
Chartered Financial Analyst® (CFA)
Considered the “gold standard” in the investment industry, professionals who pursue the CFA Program charter are generally from the corporate and investment worlds—financial advisers, investment banking analysts, portfolio managers, private bankers, research analysts, and traders. The CFA Institute issues the CFA Program charter. For those finance professionals who may decide to pursue a career specializing as a risk manager, financial advisor, or chief executive, the CFA Program charter may be a good option.
The CFA Program exam is offered only on certain dates. Level I is offered twice a year, a single day in June and a single day in December. Level II and Level III are offered only once a year, on the same date in June. The CFA Program exam is a pencil-and-paper exam.
The three levels of the CFA Program exam do not test subject matter separately. Instead, each level of the exam builds on the prior exam and covers many of the same subjects but at broader and deeper levels. Some of the areas covered are ethics, economics, financial statement analysis, equity valuation, fixed income, portfolio management, etc.
You can expect to spend about $3,000 on exam fees for all three levels, which does not include your review materials. The CFA Institute recommends you commit to at least 300 hours of studying for each exam level, or 15-20 hours a week for four to six months. It would help if you had a bachelor’s degree or four years of professional experience to sit for the exam. You also need four years of experience to become a CFA charter holder.
Certified Financial Planner (CFP)
The CFP designation is another highly regarded professional designation. That’s because Certified Financial Planners have completed extensive training and are held to rigorous ethical standards. They typically excel as financial advisors or consultants and/or working in insurance, brokerage houses, or the banking industry. Having a financial background is a great fit, as knowledge and analytical skills are a must for any advisor.
To obtain the CFP designation, a bachelor’s degree is required, and three years of professional experience in the financial-planning process or two years of apprenticeship experience that meets additional requirements. Besides, completion of the CFP Board’s coursework component is required. After successful completion of the education component, the candidate can sit for the CFP exam.
The CFP exam is offered three times a year, each over a five-day period. The CFP exam is offered in two three-hour sessions at Prometric testing centres. The exam fee is around $600, which does not include the costs of your coursework or review materials.
Financial Risk Management (FRM)
As businesses become increasingly competitive and concerned about managing risk, earning the FRM designation is an excellent way to distinguish yourself and your ability to add value to an organization. Offered by the Global Association of Risk Professionals (GARP), the FRM designation is viewed as the globally recognized standard for risk professionals and signals to employers that you are serious about risk management and have had your knowledge validated against international professional standards.
To earn this designation, you must pass two separate FRM exams and complete a minimum of two years of full-time work experience in the field of financial risk. Only finance-related vocations are considered acceptable work experience.
The two FRM exams (Part I and Part II) are computer-based and only offered one day in May and one day in November. You must pass Part II of the exam within four years of passing Part I. The total exam fee is roughly $700, but that does not include the cost of coursework or review materials or annual membership dues.
Chartered Market Technician (CMT)
The Chartered Market Technician® (CMT) credential is the preeminent, global designation for technical analysis practitioners. Administered by the Accreditation Committee of the Market Technicians Association (MTA), Inc., the designation is awarded to those who demonstrate mastery of a core body of knowledge of investment risk in portfolio management settings.
The CMT exam consists of three separate levels, and each of the exams is computer-based and administered at Prometric test centres around the world. The Level, I and II exams, are multiple-choice and machine graded, and then the results go through a psychometric review. This process requires candidates to wait approximately four weeks before receiving their final scores.
The total cost for all three levels of the exam approaches $1,500, which doesn’t include the $675 cost of program coursework, annual MTA membership fees or any additional review materials.
Certification and Licensure Chartered Alternative Investment Analyst (CAIA)
Chartered Alternative Investment Analyst (CAIA) is a professional designation offered by the CAIA Association to investment professionals who specialize in “alternative investments” such as hedge funds, private equity, real assets, commodities, and structured products. The CAIA curriculum is designed to provide finance professionals with a broad base of knowledge in alternative investments.
The CAIA program is divided into two levels, and the CAIA Association recommends at least 200 hours of study to pass the exam for each level. Level I focuses on alternative investment markets’ fundamentals, while Level II concentrates on advanced topics in alternative investments. Both levels take a global perspective and incorporate issues of ethics and professional conduct. Candidates can take both levels of the CAIA exam via computer anywhere in the world and anytime.
The total cost for both exam approaches is $2,500, which doesn’t include the $400 cost of program enrollment, annual CAIA membership fees, or the cost of any review materials.
Certified Investment Management Analyst (CIMA)
CIMA professionals integrate a complex body of investment knowledge, ethically contributing to prudent investment decisions by providing objective advice and guidance to individual investors and institutional investors. The CIMA certification program is the only credential designed specifically for financial professionals who want to attain competency as an advanced investment consultant.
The CIMA certification program takes most candidates nine months to a year to complete. Candidates must first pass a background check and pass a two-hour qualifying exam before enrolling in an in-person or online program with a business registered with the IMCA. After completing the course, candidates must then pass a comprehensive four-hour qualifying exam.
According to the IMCA, the total cost for certification ranges between $5,000 and $8,000, depending on the options chosen.
There are no specialised credentials required for a career in investment banking (though many expect you to earn the CFA charter to advance eventually). Still, you will need to have advanced knowledge of financial modelling and valuations.
While some of these concepts are covered in undergraduate or MBA curriculums, it can often be helpful to extend your knowledge and comfort with valuation models by pursuing outside education opportunities.
Internships offer a route into the industry, but competition is fierce and the interview process tough. In addition to acquiring the right technical skills, be sure to think through how you might answer typical behavioural interview questions. There’s no excuse for not doing your homework on the hiring company and their recent deals and transactions.