Making Your Way in the Finance Industry
The finance industry is said to be a highly rigid, dynamic, and constantly changing industry. This vast field can be very challenging but the finance industry can also provide exciting and better opportunities that can help you advance in your career. However, before even imagining a career in finance, it is suggested that you be well prepared and well acquainted with certain basic elements that may help you pursue a successful career in this field.
Education is an essential key to embracing success. Contrary to the perception of some, a career in finance is not just for those who have finished a degree in finance or mathematics, but it is open to all graduates. Skills that finance employers would generally seek are analysis, presentation and communication skills, problem solving and leadership skills, time management, and skills in sales, customer service, and relationship management.
Financial internships are also helpful if you want to increase your likelihood of success. Through these programs, graduates are given the chance to know the company and the industry. Internship experience with reputable employers and programs are also a good way of building a good resume. Several organizations as well as government agencies offer internship programs. Banks that offer internships include Citigroup, Wachovia, JP Morgan, Bank of America, and Loan Modification Companies. Examples of public accounting firms that offer internship programs include Ernst and Young, KPMG, Deloitte, and PricewaterhouseCoopers.
The finance industry offers various career paths such as commercial/retail banking, investment banking, securities research, financial planning, financial advisory, insurance, money/investment management, securities trading, and support functions.
If you are in a quandary as to which path to take, there are online services that can help you select the right one. You may check industry guides provided by Vault.com, Bloomberg.com, Wetfeet.com, and CareerBank.com.
Starting a Private Equity Career
Establishing a career with a private equity firm can be quite challenging. Private equity takes a special combination of skills: hard negotiating savvy, keen knowledge of finance, and superb social skills. It’s unlikely you can land a job at a private equity firm right out of school. Most private equity firms will only hire someone with at least two years’ experience in the financial sector. Even if you can find an internship with a private equity firm, your job security is not guaranteed. On average, about 10% of the best performers will find a permanent spot in a private equity firm.
The competition for private equity jobs is quite competitive, so you will have to demonstrate academic excellence and a perfect track record at an investment bank, strategy consultancy, or accounting firm. For more senior jobs, you should work on building relationships with company executives, and gain experience in running a business.
Jobs in private equity firms are generally divided into four areas: “number crunching,” appraising and executing deals, starting new deals, and marketing and finance support roles. The number crunching role is almost always an entry-level position, and is generally given to interns for a two-year contract. This job entails looking into the accounts of a company in question, and calculate how much they are worth.
Through this entry-level position, the aspiring private equity mogul can make the contacts necessary to eventually elevate him or herself to the role of appraiser and executor, also known as “principals.” These responsibilities include determining if a company is profitable enough for investment, and then going through all the required paperwork and negotiations to make the deal possible. At the top of the private equity firms are the originators, who begin the deals. These senior members stand to make the most at a private equity firm.