Careers in Finance

It is almost a truism to say that careers in finance lost some of their allure in the post-crash landscape. Indeed, banking became – and remains to some – something of a dirty word. Untrammeled arrogance from the likes of Dick Fuld and his Lehman Brothers colleagues in the face of impending disaster, despite warnings, did precious little for the sector’s reputation.

However, reputations can recover. Take Martin Scorsese’s box office dominating The Wolf of Wall Street. Much like Oliver Stone’s Wall Street, despite showing the darker side of the industry, it is not the moral message which captures the imagination, but the glamour.

Of course, the Machiavellian antiheroes depicted in these films would not be tolerated in an industry which has learned from its mistakes. In the real-world, it is figures like Barclays’ chief executive Anthony Jenkins who are rising to prominence, insisting on adherence to values and principles which have little in common with Gordon Gekko’s ‘greed is good’ mantra, while Deutsche Bank CEO Anshu Jain, reportedly requested a US$2.6 million pay cut in 2013, while promising along with co-CEO Jürgen Fitschen to transform their bank’s corporate culture.

Jairaj Singh, a recruitment consultant specializing in investment banking & global markets at Michael Page Hong Kong, states that careers in finance have shifted due, in part, to this new paradigm. “Risk and compliance have been key areas of growth, while corporate finance and M&A teams have become leaner due to cost cutting pressures.

“There has been relatively strong activity on the buy side,” he adds, “with client attention focused on China; multiple hedge funds, to which much risk has been deleveraged, and asset management firms have made their presence felt.”

Financial sector still a leading target for MBA job seekers

Those already with careers in finance are in no hurry to leave. 76.2% of respondents to the 2013 QS TopMBA.com Applicant Survey already working within the financial sector were seriously considering staying put – a retention rate only matched by consultancy and energy/environmental/utilities. It is also popular with those who were looking for a change, with only consulting matching it in terms of appeal. 41% of those working in consulting, 33.1% in energy/environment/utilities and 33% in education were considering transitioning to finance. Aside from media/advertising, at least 20% of respondents in each sector were considering making the move over to the financial sector.

Stickers and twisters alike will be pleased to hear that opportunities are on the up. Globally, the financial sector was the joint-fasting growing in terms of MBA job opportunities, according to the 2013/14 QS TopMBA.com Jobs & Salary Trends Report. Globally, MBA employers reported an 11% growth in MBA job opportunities, on the back of 16% in 2012.

This is particularly prominent in emerging economies. 21% growth in financial services and micro-finance jobs contributed significantly to total growth of 20% in MBA job opportunities in Asia – the standout region in the report. Demand is so strong in China that the Municipality of Shanghai has opened an advanced center for financial studies. There was also 29% growth in finance jobs in the Middle East, contributing to total growth of 8%.  

While growth in developed economies has been a bit slower, it is predicted that we are entering a better time for financial services in Anglophone North America and Europe. Economist and journalist Anatole Kaletsky predicts in his Reuters blog that the US economy will be growing by 4%, rather than the IMF’s predicted rate of 2.5-3%.  He also predicts that the expected rate of inflation globally will rise to 3%, and consequently the benchmark for global growth will rise to 7%. His conclusion? The ‘new normal’ will be, well, rather similar to the old normal in the decade leading up to the financial crisis.

Breaking into finance: Soft skills required

With a half a decade of cautious trading behind them, it may well be that banks will be looking to up hiring levels, and who better than MBAs who have been trained in the wake of the financial crisis, with an understanding of the folly of pre-crash arrogance – particularly those who were on the frontline? Singh warns that it is still competitive, and an MBA will not allow you to walk into any role.

“Studying at a reputable business school – a Harvard Business School or an MIT Sloan – could potentially give you an edge in terms of grabbing an employer’s attention. But ultimately, it’s a combination of skills that counts, a consistent track record and a story behind the choices for your career development are far more important.”

You should start planning several years in advance, he says – during the MBA admissions process is as good a place as any, as it will require you think about the same questions. “Do your due diligence and mold your education, experiences and qualifications accordingly. Building a strong network prior to entering the job market is essential but to do so is not easy; it requires intelligence and strong soft skills. The rest will follow.”

So, what does it take to really catch the eye? “Different roles have different requirements. Generically speaking, strong financial modeling skills and the ability to produce high quality value added work is a must. Behaviorally, you need to be a hardworking and versatile person who can interact with people from diverse backgrounds and cultures. Being a team player is important. If you don’t have a combination of technical skill sets with equally impressive soft skills, it’s highly unlikely you will go very far in your career, especially in competitive roles dominated by politics.”

QS research has consistently shown that soft skills are in high demand with employers – and that they are an area in which MBAs are often found wanting, and therefore represent an obvious way to give yourself an advantage. A unique value added proposition will also help, he adds, such as learning to speak several languages.

So, if you succeed, what sort of remuneration can you expect? In Western Europe and the US & Canada, the average stands at US$95,350, supplemented by a bonus of US$12,100, taking total compensation to a tidy US$107,450. This is no longer a table-topping figure, but it’s hardly pocket change either…

However, you shouldn’t aim for careers in finance, Singh adds as a final word of caution, unless you’re absolutely sure that it is for you: “Jumping into a job without spending the time to fully understand the ins and outs of the role and the business is folly. You need to truly assess whether it’s the right fit for you, because you could set off in a career path which may be difficult to change in the future.”