Finance Today
Today's Finance Directors are the pivotal executives for dynamic companies. They work more closely with CEOs than any other Board member and their responsibilities extend far beyond traditional financial management. Finance Directors make full use of new business tools and technologies and have responsibility for a wide range of high value purchasing decisions, from IT systems and software to relocation and outsourcing.
To carry out their role effectively, it is vital that Finance Directors have available to them accurate and up-to date information from leading commentators and business leaders. As the most influential and informative review for Finance Directors and senior Accountants in business, FINANCE TODAY is highly regarded for its in-depth analysis and searching editorial perspective on a broad range of subjects of critical importance to sound business management.
Finance Careers
- Financial Analys - Financial analysts work in corporate finance, and some of their job duties include acquisition and asset sales analysis, financial plan implementation and overall cash management.
- Financial Planner - With a solid understanding of estate planning, investments and taxes, financial planners help their clients to achieve their financial goals, such as saving for retirement and college.
- Claims Adjuster - According to Careers in Finance, adjusters negotiate insurance claims with people have experienced a loss. The adjuster is responsible for reaching a claim settlement that is fair to all parties.
- Mutual Fund Analyst - Mutual fund analysts determine safety and risk for investments made for pensions, retirement and other mutual funds.
- Real Estate Appraisal - Real estate appraisers typically work for banks and their main responsibility is to determine unbiased property values so that banks can make an informed lending decision.
(http://www.ehow.com/facts_5038049_type-jobs-available-finance-degree.html)
Jim Howard - COO Desert Community Bank, Las Vegas, NV
Marketplace
What are your projections for this type of work or industry? Is it stable, growing, declining?
James told me that the financial industry is in hard times right now. It will never be the same in the future as it was in the past. Right now there are so many new Government regulations which restrict what financial institutions can do that it makes it almost impossible for new companies to get start-up money. The Government is literally stomping out new businesses.
What are the key trends or issues? New developments? Key challenges?
Right now pretty much everything is stopped in its tracks. There are not any new trends or developments and most banks that are still around right now are not making any money and have not made any money for the past two years or so. Rather that even trying to revolutionize things, people are just striving for survival.
What and where are the opportunities?
There are currently no opportunities in the industry. Many financial institutions have gone under in the last couple of years and this has caused people to be forced to look elsewhere for work. The people that do still have jobs in the industry are holding on to them for dear life and there are no foreseen changes in the near future.
What are typical salaries in this type of job? What are the opportunities for career growth?
For someone who is coming straight out of college and going into the financial industry, they can expect to have a starting salary of about $60,000 per year. Unfortunately there are not any opportunities like that right now and for people in the field already there are not any opportunities for growth.
Entry into Position
When and how did you get involved in this type of work?
He got involved in this business back when times were much better. He was working for Wells Fargo at the time he got together with a group of people to collect funds so they they each could start their own banks. They raised about $20 million all together and then they each went off and started their own ventures.
What was your training and background? Is this typical for people in your position?
He earned an MBA from the University of Wisconsin and later went to a school of banking operations. He spent 25 years working with First Interstate/Wells Fargo banks and then went off on his own. This is pretty typical for someone in his position.
How important are specific credentials for entry or success?
A huge thing is to know a LOT of people. Having a "sterling reputation" will help you to gain trust of people who will help you out.
Job Specifics
What is a typical day like for you?
James is probably not a typical example of someone in the financial industry because of his status. A typical day for him consists of a couple of hours in the office in the morning, a lunch appointment with a client, taking a look at different businesses to help analyze them, and working on reports. This may vary from day to day, but this is a "typical" day.
What do you like most about your work?
James loves the volatility of his work. He never knows what any given day is going to throw at him and he loves that about it. His favorite thing to do is help people expand their vision.
What do you like least about your job?
The current conditions do not allow for him to accomplish the things that he loves about what he does, and this is what he likes least about his job. The fact that he cannot control the conditions of the environment makes things tough for business at times.
What talents or skills are most crucial to success in this work?
People skills is an absolute must! If you do not know people and have the trust of the people that you work with, then you can never succeed. You must be able to study situations and trends in the market as well.
What attitudes or values are important?
Hard work, honesty, and a "sterling reputation".
How do you advance or get promoted in this type of work?
As stated before, there are not really any opportunities for advancement in this field at the moment, but in order to advance, good relationships need to be built. Additional schooling is not a must, but experience and keeping up with new trends is necessary.
Recommendations
What would you recommend I do if I want to go into this type of work?
Getting the education is first and foremost! Try to get into internships and learn everything you can from the people you work with.
Are there other jobs similar to yours that you would suggest I also consider?
Right now careers in Law and Government are doing very well. Many of the same values and talents will play a part in a career in either of these two fields as well.
Knowing what you do now, is there anything that you would have done differently?
No, everything went well with the circumstances that he was placed in. Things are tough right now, but it is not because of anything that he did wrong.
Key Terms
- ROI - Return on Investment. A measure of a corporation's profitability, equal to a fiscal year's income divided by common stock andpreferred stock equity plus long-term debt. ROI measures how effectively the firm uses its capital to generate profit; the higher the ROI, the better.
- Net Present Value - NPV. The present value of an investment's future net cash flowsminus the initial investment. If positive, the investment should be made (unless an even better investment exists), otherwise it should not.
- Stocks - An instrument that signifies an ownership position (called equity) in a corporation, and represents a claim on its proportional sharein the corporation's assets and profits. Ownership in thecompany is determined by the number of shares a person ownsdivided by the total number of shares outstanding. For example, if a company has 1000 shares of stock outstanding and a person owns 50 of them, then he/she owns 5% of the company. Most stock also provides voting rights, which give shareholders a proportional vote in certain corporate decisions. Only a certain type of company called a corporation has stock; other types of companies such as sole proprietorships and limited partnershipsdo not issue stock. Also called equity or equity securities orcorporate stock.
- Bonds - A debt instrument issued for a period of more than one year with the purpose of raising capital by borrowing. The Federalgovernment, states, cities, corporations, and many other types of institutions sell bonds. Generally, a bond is a promise to repaythe principal along with interest (coupons) on a specified date (maturity). Some bonds do not pay interest, but all bonds require a repayment of principal. When an investor buys a bond, he/she becomes a creditor of the issuer. However, the buyer does notgain any kind of ownership rights to the issuer, unlike in the case of equities. On the hand, a bond holder has a greater claim on an issuer's income than a shareholder in the case of financial distress (this is true for all creditors). Bonds are often divided into different categories based on tax status, credit quality, issuer type, maturity and secured/unsecured (and there are several other ways to classify bonds as well). U.S. Treasury bonds are generally considered the safest unsecured bonds, since the possibility of the Treasury defaulting on payments is almost zero. The yield from a bond is made up of three components: coupon interest, capital gains and interest on interest (if a bond pays no coupon interest, the only yield will be capital gains). A bond might be sold at above or below par (theamount paid out at maturity), but the market price will approachpar value as the bond approaches maturity. A riskier bond has to provide a higher payout to compensate for that additional risk. Some bonds are tax-exempt, and these are typically issued bymunicipal, county or state governments, whose interest payments are not subject to federal income tax, and sometimes also state or local income tax.
- Stockholder - One who owns shares of stock in a corporation or mutual fund. For corporations, along with the ownership comes a right to declared dividends and the right to vote on certain companymatters, including the board of directors. Also called shareholder.
- Government Securities - Securities issued by a government to raise the funds necessaryto pay for its expenses.
- Mutual Fund - An open-ended fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. mutual funds raisemoney by selling shares of the fund to the public, much like any other type of company can sell stock in itself to the public. Mutual funds then take the money they receive from the sale of their shares (along with any money made from previous investments) and use it to purchase various investment vehicles, such as stocks, bonds and money market instruments. In returnfor the money they give to the fund when purchasing shares, shareholders receive an equity position in the fund and, in effect, in each of its underlying securities. For most mutual funds, shareholders are free to sell their shares at any time, although the price of a share in a mutual fund will fluctuate daily, depending upon the performance of the securities held by the fund. Benefits of mutual funds include diversification andprofessional money management. Mutual funds offer choice,liquidity, and convenience, but charge fees and often require a minimum investment. A closed-end fund is often incorrectly referred to as a mutual fund, but is actually an investment trust. There are many types of mutual funds, including aggressive growth fund, asset allocation fund, balanced fund, blend fund,bond fund, capital appreciation fund, clone fund, closed fund,crossover fund, equity fund, fund of funds, global fund, growth fund, growth and income fund, hedge fund, income fund, index fund, international fund, money market fund, municipal bond fund, prime rate fund, regional fund, sector fund, specialty fund,stock fund, and tax-free bond fund.
- SEC - Securities and Exchange Commission. The primary federalregulatory agency for the securities industry, whoseresponsibility is to promote full disclosure and to protectinvestors against fraudulent and manipulative practices in thesecurities markets. The securities and Exchange Commissionenforces, among other acts, the Securities Act of 1933, theSecurities Exchange Act of 1934, the Trust Indenture Act of 1939, the Investment Company Act of 1940 and the Investment Advisers Act. The supervision of dealers is delegated to the self-regulatory bodies of the exchanges. The securities and Exchange Commission is an independent, quasi-judiciary agency. It has five commissioners, each appointed for a five year term that is staggered so that one new commissioner is being replaced every year. No more than three members of the commission can be of a single political party. The securities and Exchange Commission is comprised of four basic divisions. The Division of Corporate Finance is in charge of making sure all publicly traded companiesdisclose the required financial information to investors. TheDivision of Market Regulation oversees all legislation involvingbrokers and brokerage firms. The Division of Investment Management regulates the mutual fund and investment advisorindustries. And the Division of Enforcement enforces the securities legislation and investigates possible violations.
- Stock Market - General term for the organized trading of stocks throughexchanges and over-the-counter.
- Initial Public Offering (IPO) - The first sale of stock by a company to the public. Companies offering an IPO are sometimes new, young companies, or sometimes companies which have been around for many years but are finally deciding to go public. IPOs are often risky investments, but often have the potential for significant gains. IPOs are often used as a way for a young company togain necessary market capital.
- Venture Capital - Funds made available for startup firms and small businesseswith exceptional growth potential. Managerial and technicalexpertise are often also provided. also called risk capital.
- Interest Rate - A rate which is charged or paid for the use of money. An interestrate is often expressed as an annual percentage of the principal. It is calculated by dividing the amount of interest by the amount of principal. Interest rates often change as a result of inflationand Federal Reserve policies. For example, if a lender (such as abank) charges a customer $90 in a year on a loan of $1000, then the interest rate would be 90/1000 *100% = 9%.
- Dow Jones Industrial Average - DJIA. The most widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip stocks, primarily industrials. The 30 stocks are chosen by the editors of the Wall Street Journal (which is published by Dow Jones & Company), a practice that dates back to the beginning of the century. The Dow was officially started by Charles Dow in 1896, at which time it consisted of only 11 stocks. The Dow is computed using a price-weighted indexingsystem, rather than the more common market cap-weighted indexing system. Simply put, the editors at WSJ add up the prices of all the stocks and then divide by the number of stocks in the index. (In actuality, the divisor is much higher today inorder to account for stock splits that have occurred in the past.
(http://www.investorwords.com/)