It can be difficult, especially for those in colleges and universities to understand what jobs for Finance majors exist. What we are going to go through is for new graduates as well as entry-level or early career positions. And while our focus is on Finance majors, this all applies to those majoring in accounting, economics, other business graduates, or really anyone looking to work in finance. Is this information perfect? NO! But I’ll give you a pretty detailed breakdown based on my research, knowledge, and experience.
We cover the whole topic in our video below, but read on for additional info
On with the written portion! Here are the categories as we break them down:
Finance Career Paths
There are probably other ways you can split up the finance universe, but this is a good start. Our focus is going to be early career here. So those looking for an entry level financial analyst job (or the equivalent in each category). With that, let’s go through some information on each category.
The “holy grail” of finance. On the internet you will find countless resources with tips, information, training, interview prep and more all geared toward trying to land a coveted position in Investment Banking (IB). This path is the most financially lucrative, starting salaries fall out somewhere between $80K all the way up into the $100K+, tack on a bonus which could be 50-100% of base for the highest performers, not to mention a signing bonus of $5-15k and you have yourself one hell of a start to a career. The money comes at a cost. Jobs at investment banks are a grind. The culture feels a tortured pride about their regular 80-100 hour work weeks and it is expected you are willing to work that. The work, in the first few years mainly consists of financial modeling, going through the process of the transaction and helping to make suggestions to leadership, doing due dilligence, partnering with employees at the client to prepare for the deal, making powerpoint slides / pitch decks or pitch books. It is extremely competitive to get into investment banking and harder yet e if you don’t go to a target school. Overall, it is high pay and long hours, and an “up or out” culture. Often, the majority of these jobs are often located in big cities (with a very high cost of living) so the higher earnings are negated by the super high rent and living expenses in NY, SF, LA, etc…
Management consulting is not strictly “finance” but it is a highly sought after landing spot for finance grads or people with a couple years of finance experience in a different finance category. The world of management consulting is broad. Consulting firms provide various services to their clients on based on whatever problem or project the client needs worked. It cuts across industries, public & private, governments, non-profits and more. The pay is good at the top firms, starting at around $80K base salary + 10-30% bonus and sometimes a signing bonus. The work is difficult, but not quite as many hours as Investment banking (more like 60-80 hour work weeks). Consulting firms have their own target schools they recruit at and it shares an up or out structure.
Sales &/or Trading
This covers a pretty broad spectrum as sales & trading cuts across a number of categories. You have both the buy and the sell side. You also have Investment Banks, Hedge Funds, Mutual Funds, Pensions, Asset Management companies, and more. Sales position are more qualitative in nature, and can be heavier on, you guessed it… selling! The Trading positions are more quantitative. Within Trading, as software and tools have improved, it’s more important than ever to have skills coding/programming, data mining, etc. Because there is a lot of variation in the institutions and work you will do, salaries vary greatly. But a reasonable range at a good or very good company might be 60-100k base, the jobs could be heavy on bonus component and less on base for sales roles. it is important to note that given the rise of technology and software trading jobs are becoming less prevalent than in the past
In commercial banking roles you are working for banks on lending / providing credit and/or deposit services to different companies or entities. Usually early on you are a “Credit Analyst” or Account Manager. You underwrite new business, review or monitor different clients, manage relationships and bring in new business or new accounts with existing clients. Depending on where you work and your role, you might be expected to be heavier on the selling or new business side… or you might be more on the modeling and analytical side working underwriting and analysis. Starting salaries are lower than consulting and IB but more stable work-life balance and a pretty quick path to making 100k.
Technically, all finance jobs at any corporation is could be called corporate finance. Some say that investment banking, financial planning, and anything related to finance is “corporate finance”. But when we talk about corporate finance here, and when most people talk about “corporate finance jobs”, we are talking about the finance department that runs the end to end finances of most companies. Corporate Finance is probably the category that has the largest number of jobs. Almost every company has a finance department. It could be a massive finance department like you would find at Amazon, Ford, Microsoft, Home Depot or other large public companies. Or it could be a small business with just one finance person at the whole company. Because of the breadth in the category it is tough to lay out a typical work subject matter, hours or salary. But overall, it is a great area to have a career. It can culminate in making many millions per year as a CFO or it could be a long career with great work life balance.
Private Equity firms secure funding then they buy and sell businesses. They might aggregate a number of companies in one industry or and maybe even take that company public. It can be a dynamic place to work. You might work at one of company’s owned by Private Equity or you might work at the firm itself. Unfortunately, private equity does not hire many undergraduates directly. Private Equity firms value experience, especially in industries in which they focus. However, for those that do get in, the compensation and benefits can be really good. With bonus a successful first year Private Equity analyst might make 100-150k. The work itself is demanding with a lot of travel and regularly 60-80 hour work weeks. PE analysts spend time building models, doing due diligence on companies, monitoring the health of the companies in the portfolio, and more!
Equity Research / Portfolio Management
Positions in Equity research work within banks or other firms providing guidance on investments. Typically they are split as “Buy side” or “Sell side”. Sell side analysts are the analysts you see on CNBC. They provide research reports guidance externally. Whereas a “Buy side” analyst works at a fund, trust, pension or other company. They take in sell side reports and do some of their own work and are looking to “buy” for their company / firm. The outlook is shrinking a bit with rise of passive investing, technology, and the like… but there are still very solid careers to be had. If you want to work in this field you should start working toward the CFA now. CFA is almost a requirement for man of these jobs.
Financial Planning / Financial Services
Financial planners help individuals or smaller entities to manage their investment portfolio and plan their finances. The job itself depends on where you work. These jobs could work for glorified insurance companies or be a very small personal financial planning firm. Often these jobs are heavy on interacting with people and selling your services (or your company’s services). You might spend time cold calling, working out an investment strategy for a client, networking, or more administrative tasks. There are a large number of jobs, but the quality varies consistently. It is often recommended to start out at a firm with a good training program or paraplanning program. The CFP is the “gold-standard” certification for this world, but you may also need to get a Series 7, 63, or others.