Why You Should Choose a Financial Career
The financial services industry, as well as financial disciplines common to all industries (such as accounting), have long histories of attracting energetic and ambitious people who are looking for the best career opportunities. Focusing on the financial services industry, here are a few of its most significant selling points for prospective employees.
Compensation
The financial services industry is noted for compensation structures that are, overall, much more generous than in other sectors of the economy.
See our more in-depth discussion of compensation for details. In particular, successful financial services sales professionals tend to be especially well paid, both relative to other employees in this industry and especially in comparison to sales people in other industries.
Advancement
Compared to other industries, the financial services firms tend to place less weight on seniority in judging the readiness of employees for advancement. High performers can move ahead regardless of age, making this industry particularly attractive for ambitious young people in a hurry.
Getting Started
Breaking into the financial services industry presents increasing challenges today due to the consolidation of financial firms and the scaling back of traditional entry points such as financial advisor training programs and the renowned Goldman Sachs Junior Analyst Program. Nonetheless, financial internships are growing in importance as avenues to the best jobs in the industry.
Bureaucracy
Many of the leading firms tend to be relatively thinly-staffed. There are comparatively few layers of management. Decision-making tends to be rather quick. Your opportunities for getting face time in front of senior management also tend to be excellent. That is, these firms do not normally operate in a highly formalized, chain of command fashion which is more typical of slower-footed traditional industrial companies.
You also are more likely to juggle multiple responsibilities within a given job category, often ranging far beyond the official job description, compared to the norms in other companies. Bureaucracy should be an important consideration in choosing employers.
Pace
A premium is placed on quick thinking, quick acting, and constant production of results. This can be trying for some people, exhilarating for others. The thin staffing and comparative lack of bureaucracy requires exceptionally hard work, focus and commitment to stay afloat, let alone to succeed. For those who do, however, the rewards are commensurately great.
Caveats
As a general rule, the banking and insurance sectors of financial services tend to be rather more bureaucratic, more deeply staffed and less remunerative at all levels than firms whose principal lines of business are in (for example) securities brokerage (or financial advisory services), investment banking, securities trading, investment management (or money management), and/or securities research. These latter types of firms include what is commonly called Wall Street.
Tips for Choosing Employers
When considering employers, determine whether the internal culture appears to mesh with your own preferences. If you are ambitious and eager to advance, here a few things to assess, to gauge your opportunities for promotion. Keep in mind that employers often make false or deliberately misleading assertions to attract job applicants.
Seniority:
Overall, compared to other industries, financial services firms tend to place much less weight on seniority in promoting employees.
In this context, seniority can refer to your length of service at your current firm, within the industry or across your entire working history. Stated somewhat differently, candidates for promotion generally are sought among those with outstanding recent performance rather than among those who have "paid their dues" over long, solid but unspectacular careers.
That said, there are cultural variations between firms and between sectors of the industry. As a general rule, Wall Street firms tend to anchor one end of the spectrum, the most amenable to fast advancement.
Bureaucracy:
As a quick test of how bureaucratic a company is, see how many layers of managers are between the lowest-level employee and the top person, who may be called something like CEO (Chief Executive Officer), President or Chairman. The layers may differ by division. Request a detailed organization chart to evaluate this for yourself.
With more layers of management, decision-making tends to be slower and the company may be somewhat more conservative and rule-bound. However, more layers of management may present more promotional opportunities. Meanwhile, in thinly staffed firms, with fewer layers of management, your opportunities to made a discernible impact and to gain notice among senior management tends to be excellent.
You also are more likely to juggle multiple responsibilities within a given job category, compared to the norm in other companies. Moreover, your formal job description may not necessarily capture the full range of your duties, or the amount of multitasking ultimately required of you.
Another test of bureaucracy is the employee handbook, describing employees' duties, rights and responsibilities (not to be confused with the employee benefits handbook). Its thickness and level of detail indicates how rule-bound and well-defined the work environment is.
Chain of Command:
With a strict chain-of-command protocol, directives and information flow from management level to level in straight succession. A manager will rarely call directly on a subordinate who is two or more levels below, or who is not in his own organization. Work moves more slowly and your opportunities to interact directly with senior management will be more limited.
Management Models:
Management models reflect the general manner in which employees and their efforts are organized. It is vital for career success and satisfaction to choose an employer whose management model is compatible with your own preferences.
Adherence to Rules:
The culture of some organizations exempts powerful people from adherence to fundamental rules.
Weak governance of this sort can be a recipe for trouble. It also complicates the jobs of employees in rule enforcement roles.
The Arc of Tragedy:
The arc of tragedy is a process by which once-great organizations decline and fall. Recognizing whether a current or potential employer is falling into this trap is a key to intelligent career management.
Span of Control:
This is the number of people under a given manager. There will be significant variations even within a company, across its departments and management levels. More layers of management combined with smaller spans of control generally offer greater promotional opportunities.
However, this scenario threatens wholesale elimination of management levels and consolidation of management peer positions in a future cost-cutting exercise.
Financial Strength:
The meltdown of several venerable financial services firms in 2008 suggests that, before accepting a job offer, conducting a thorough analysis of the prospective employer's financial strength and stability is highly advisable. This may require enlisting professional help, such as from a financial advisor or financial planner. With the caveat that investment professionals generally failed to recognize the magnitude of problems in those firms until it was much too late, it nonetheless is wise in the current environment to know as much about a prospective employer as is possible.
Also, consider the impacts of industry consolidation and the opportunities for telecommuting. Additionally, a recent survey of employee satisfaction in finance is illuminating.
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