FSC - Careers in Investing Lesson

Careers in Investing

Careers in investing generally fall into three categories: corporate finance, personal financial planner, and brokerage. Let's take a look at careers in each field.

Corporate Finance

The generic title for this field is an investment banker. Individuals in this field help businesses and governments raise money to support their growth.

Personal Financial Planner

Personal financial planners help individuals and families reach their goals through planning their financial futures.

Brokerage

Brokerage jobs deal with the trading of stock on stock exchanges such as the New York Stock Exchange, the American Stock Exchange, and NASDAQ. You have probably seen pictures of what appears to be chaos on the floor of the NYSE. Behind all of that chaos is a variety of jobs with brokerage firms.

• Floor Trader - a member of a stock or commodities exchange who trades on the floor of that exchange for his or her own account. The floor trader must abide by trading rules similar to those of the exchange specialists who trade on behalf of others.
• Trading Floor Operations - one who handles the financial transactions at a brokerage; having to do with the execution of trades and keeping customer records.
• Trading Floor IT - one in charge of the computers and technology processes on the trading floor.
• Trading Floor Research - employee who researches stocks during trading hour on the pexchange trading floor.
• Brokerage Clerk - work for firms that buy and sell securities; they are responsible for writing orders, verifying transactions and keeping records of activities involving stocks, bonds, and other types of investments.

Education and Licensing Requirements

Education

Securities, commodities, and financial services sales agents generally must have a bachelor's degree to get an entry-level job. Studies in business, finance, accounting, or economics are important, especially for larger firms. Many firms hire summer interns before their last year of college, and those who are most successful are offered full-time jobs after they graduate.

Numerous agents eventually get a master's degree in business administration (MBA), which is often a requirement for high-level positions in the securities industry. Because the MBA exposes students to real-world business practices, it can be a major asset for jobseekers. Employers often reward MBA holders with higher level positions, better compensation, and large signing bonuses.

Financial Analyst

FINRA is the main licensing organization for the securities industry. It requires licenses for many financial analyst positions. Most of the licenses require sponsorship by an employer, so companies do not expect individuals to have these licenses before starting a job.

Certification is often recommended by employers and can improve the chances for advancement. An example is the Chartered Financial Analyst (CFA) certification from the CFA Institute, which financial analysts can get if they have a bachelor's degree, 4 years of experience, and pass three exams. Financial analysts can also become certified in their field of specialty.

Investment Banker or Securities Trader

Brokers and investment bankers must register as representatives of their firm with the Financial Industry Regulatory Authority (FINRA). To obtain the license, potential agents must pass a series of exams.

Many other licenses are available, each of which gives the holder the right to sell different investment products and services. Traders and some other sales representatives also need licenses, although these vary by firm and specialization. Financial services sales agents may need to be licensed, especially if they sell securities or insurance. Most firms offer training to help their employees pass the licensing exams.

Agents who are registered with FINRA must attend continuing education classes to keep their licenses. Courses consist of computer-based training on legal requirements or new financial products or services.

Although not always required, certification enhances professional standing and is recommended by employers. Brokers, investment bankers, and financial services sales agents can earn the Chartered Financial Analyst (CFA) certification, sponsored by the CFA Institute. To qualify for this certification, applicants need a bachelor's degree or 4 years of related work experience and must pass three exams, which require several hundred hours of independent study. Applicants also must have an international passport. Exams cover subjects in accounting, economics, securities analysis, financial markets and instruments, corporate finance, asset valuation, and portfolio management. Applicants can take the exams while they are getting the required work experience.

Personal Financial Planner

Personal financial advisors who directly buy or sell stocks, bonds, insurance policies, or specific investment advice need a combination of licenses that varies based on the products they sell. In addition to those licenses, smaller firms that manage clients' investments must be registered with state regulators, and larger firms must be registered with the Securities and Exchange Commission. Personal financial advisors who choose to sell insurance need licenses issued by state boards. State licensing board information and requirements for registered investment advisors are available from the North American Securities Administrators Association.

Certifications can enhance a personal financial advisor's reputation and can help bring in new clients. The Certified Financial Planner Board of Standards offers the Certified Financial Planner (CFP) certification. For this certification, advisors must have a bachelor's degree, at least 3 years of relevant work experience, pass an exam, and agree to adhere to a code of ethics. The exam covers the financial planning process, insurance and risk management, employee benefits planning, taxes and retirement planning, investment and real estate planning, debt management, planning liability, emergency fund reserves, and statistical modeling.

As employee in the investing sector you will be expected to be an expert on financial literacy. Go to the assignments and prepare a presentation to show how much you know.

Self-Assessment

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