Careers in Finance
Trading, investment banking or equity research? Choosing which career to pursue in finance can be confusing as you are inundated with choice.
This article will look at 5 different career options in the field of finance, to help you decide what might work best for you. We will explore the following:
- Financial Planning & Analysis
- Trading
- Investment Banking
- Equity Research
- Financial Audit
For each, we provide an overview of the role, a breakdown of the work-life balance, pay, and the skills required, as well as some suggested companies for each career path.
Video Breakdown: Top 5 Finance Jobs Explained
Visual learners should consider checking out our video on the top 5 finance jobs featuring salary expectations, responsibilities, work hours, required skills, and more!
#1 Financial Planning & Analysis
Financial Planning & Analysis (also known as FP&A) involves forecasting and budgeting the finances of a company.
The FP&A team will answer questions like:
- “What do we expect revenues to look like in 5 years’ time?”
- “How much money should we allocate to the marketing team next year?”
- “What will happen if the economy does poorly because of political turmoil?”
Generally, the FP&A team will be reacting to the grand strategic plans created by senior executives. This could be reaching $10 million in revenue or being profitable by next year. The FP&A team will work to create a financial plan to reach this strategic goal.
Skills:
Financial modelling is central to the role, so you need to be good with spreadsheets, finance and accounting, and strategy.
Hours:
Around 50 to 60 hours a week is normal for this job. Hours may increase when significant deadlines come up (quarterly and annual financial reports).
Pay:
This will differ with the company, depending on if you work at a top company like Apple, or a regional one, such as a restaurant chain. Generally, in a big US business, a salary ranging from $60-90,000 is not uncommon.
Companies:
The role entails predicting and reacting to future scenarios, this means that all large companies will have some kind of FP&A team. Examples include Apple, P&G, ExxonMobile.
#2 Trading
Trading is the buying and selling of securities on the market. These securities can range from regular stock and bonds to more complex securities like options, futures and swaps.
You can be a trader making the trade on behalf of somebody else, such as a client, for yourself, or for your own company.
The job is notoriously stressful, mainly because you are set to win and lose money all the time, creating a lot of pressure. In addition, you will be constantly measured on your performance in the markets, and this judgement can be quite stressful for some people.
Skills:
Here is a breakdown of some of the essential skills linked to the job
- Strong with numbers. This is pretty straight-forward as you'll often calculate investment metrics, profit and loss, etc.
- Fast decision maker. Many markets are dependent on timing where you can win or lose lots of money is a matter of seconds.
- Level-headed. Given the volatile nature of investments, it will be best to remain rational and unemotional to handle to stress of the job.
Generally, you’ll need a license to become a trader, and in the USA, this is typically the Series 7 exam. It is common for your employer to pay for the exam in the first months of the job.
Hours:
Around 60 hours a week, with the most intense being the hours when the market is open. In the US, the market hours are from 9.30am to 6pm, so during that time frame a trader has to be very focused and will probably not move much. Before and after that time, a trader will prepare for the upcoming day.
Pay:
The salary varies hugely, as it will depend on your performance in the markets. Between $70-100,000 is realistic. However, if you stand out and perform well, you could make well above $100,000, even if you’re relatively young.
Companies:
For entry level trader roles look at investment banks, oil and gas companies, like BP, and asset managers, such as Blackrock and Vanguard.
If you’re interested, check out this article which details the day in the life of a trader.
#3 Investment Banking
Investment Banking is probably one of the most well-known and popular finance careers. The job has two sides: financing and advisory.
Financing involves raising money for a company. Primarily, this is through stocks, such as Airbnb’s IPO where they sold their shares to the public, or through bonds, like Apple’s 14 billion bond offering to raise cash.
Advisory investment bankers will advise companies on things like mergers and acquisitions, where they can assist in the process of evaluating if this is a good option, calculating the right price and finding the funds to acquire etc. An example of this, is Amazon buying MGM studios for $8.5 billion in March 2022.
Skills:
- Strong financial accounting and corporate finance understanding
- Microsoft Excel and PowerPoint
- Client-facing sales skills
Hours:
It is no secret that investment banking entails long hours due to the deal-oriented nature of the job. Indeed, averaging 80-hour work weeks is not unheard of.
Pay:
For an entry level role as an analyst, the base salary will be around $85,000 and bonuses could be more than $50,000 depending on your performance. (This is based on big financial centers such as New York, San Francisco, and Chicago).
Companies:
There is an extensive list of companies offering investment banking analyst roles, check out Goldman Sachs, JP Morgan, Bank of America, and Credit Suisse, to name a few.
To read about the day in the life of an investment banking analyst, take a look at this article.
#4 Equity Research
An equity researcher is in charge of producing reports and recommendations on investment opportunities for clients.
What can be confusing is that at an investment bank, since they are so large nowadays with numerous different divisions, there can have both equity research teams as well as trading teams.
At its core equity research is about providing a recommendation on whether to buy, hold or sell a particular investment. For instance, this might be for a stock, a bond, or a fund.
For an example of what a report might look like click here. This one is from Morgan Stanley’s research teams, as they analyze Apple, and give an estimate of a price target. As you can see the reports equity researchers produce are rather extensive and detailed.
Skills:
Equity research is quite a technical role, so you will need to be quite knowledgable in some quantitative topics.
- Statistics, economics, and finance to make forward figure projections
- Database management skills to manage raw data and transform into investment insights
- Strong writing and communication skills
The Chartered Financial Analyst (CFA) is also a common qualification for this role.
Hours:
Unlike investment banking the job isn’t very deal oriented. Since everyone knows when a company’s financial statement comes out, there shouldn't be any big surprises. During peak season it can be around 80 hours a week, but usually its around 60 to 70 hours per week.
Pay:
The base pay is around $85,000, and although the bonus is lower than investment banking, it will normally add up to a salary of around $100,000+ in a US financial hub.
Companies:
Many large investment banks have equity research departments. This includes Bank of America, JP Morgan, Morgan Stanley, Evercore, and other banking and investment firms.
Check out this article for the day in the life of an equity research associate.
#5 Financial Audit
This job concerns verifying the accuracy of the financial statements of the company you’re auditing. A financial auditor can either be an internal auditor or an external auditor and will investigate if there’s any errors or potential fraud in financial statements.
Internal auditing means working within the company. Any large company will have internal auditors (Ex. Coca-Cola or Nike).
As for external auditors, this is primarily the big 4 (Deloitte, PwC, EY and KPMG), who will audit many different companies throughout a year. In this role, you might spend 2 weeks auditing one company, then move onto the next one, and so on. Typically, this will be at the client’s office, so you will have to travel a fair bit, although it tends to be in the same city or at least region.
Skills:
Usually, while at the job, financial auditors will work towards the Certified Public Accountant (CPA) designation. The general skillset required is a mix of good accounting and finance knowledge, Excel, and communication, since you will constantly be dealing with clients.
Hours:
Generally, the hours are around 60 hours per week. This might go up during the peak season, when annual reports are due, which is typically in winter.
Pay:
For big business hubs in the USA, the pay is around $60-70,000
Companies:
For entry level financial auditing roles, the big 4 are very common, and after a couple of years, people tend to make the switch to internal audit.
Additional Resources
If you want to further develop your skills to be a strong finance job candidate, take a look at our , our , and more using the get started button below.
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Introduction
Building a cash flow statement from scratch using a company income statement and balance sheet is one of the most fundamental finance exercises commonly used to test interns and full-time professionals at elite level finance firms.
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