Finance Career Cluster Overview
Finance professionals such as bank employees, commodities brokers, and insurance claims representatives have very different day-to-day job responsibilities, but they all deal with the management and movement of money in one form or another.
Although people still use banks primarily as places to safely keep and manage their money, today most automobiles, home appliances, and houses are bought through bank consumer loans. Inventories, equipment, and machinery for business and industry are also financed by term loans made through bank commercial departments. The major service areas of banking are commercial banking, including corporate lending; consumer, or retail, banking; and trust administration and estate planning. Business banking is the major service function of the industry. Business bankers are involved in making loans to businesses and corporations. This includes providing credit assistance for such things as accounts receivable financing, leasing, energy financing, and equipment financing. Bank loans to commerce and industry total hundreds of billions of dollars.
Another important aspect of finance is securities and commodities exchanges. Places such as The New York Stock Exchange provide central meeting places and supervised auction markets where brokers buy and sell securities, or shares of ownership in companies, for their clients. Commodities futures exchanges are similar to stock exchanges, except commodities brokers trade in the future prices of goods such as grain, cotton, or livestock instead of companies. Futures trading provides protection against changeable prices in the cash markets.
The insurance industry, also part of the finance cluster, provides protection for customers against financial loss from various hazards. This protection is offered in the form of insurance policies. The industry is a massive, highly complex one that has grown out of an ancient and very simple principle: The more people who share a financial risk, the smaller the risk is for each. The major types of insurance policies sold are life insurance, health insurance, and property and casualty insurance.
Finance Career Pathways
The four career pathways in the finance cluster are banking and related services, business financial management, financial and investment planning, and insurance services.
Banking and Related Services Career Path
Workers in this area are employed by banks, credit unions, and savings and loan organizations that offer savings, credit, and loans to businesses and consumers. Examples of jobs in this pathway include bank services workers, credit analysts, and bookkeepers.
Business Financial Management Career Path
People who work in this area design, install, and implement the financial and accounting systems for businesses. This helps businesses keep an accurate financial history, manage accounts payable and receivable, and make better decisions overall. Examples of jobs in this pathway include accountants, auditors, and financial analysts. Read more about Accounting Careers.
Financial and Investment Planning Career Path
Workers in this area provide investment and financial planning advice to businesses and consumers. Clients place a great deal of trust in these professionals to perform constant research, stay up-to-date on market trends, and make wise decisions for them in their name. Examples of careers in this pathway include commodities brokers, financial planners, financial services brokers, and tax preparers.
Insurance Services Career Path
The insurance industry sells policies to people and businesses that protect them against financial losses in the event of death, natural disaster, accident, and other occurrences. There are many kinds of positions in this field, ranging from people who sell policies (insurance agents and brokers) to the people who estimate the value of insurance policies based on mathematical formulas (actuaries). Other careers in this pathway include customer service representatives, insurance claims representatives, and insurance underwriters.
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Exploring Finance Careers
Working in finance calls for good math, organization, and communication skills. Most of the professionals in this field are numbers people and problem solvers who also enjoy working with people. To prepare for a career in finance, volunteer to become treasurer of one of your school’s clubs. This is a great way to sharpen your basic bookkeeping and organizational skills. It will also help sharpen your sense of teamwork, responsibility, and fairness, all of which are critical in finance. If you receive an allowance or have a part-time job, keep a detailed record of your spending and try to create a basic budget for yourself. These types of record- keeping and strategizing activities are very useful in financial careers.
Good computer and technology skills are very important in finance. As is the case in many industries, many tasks that used to be handled on paper have been transported to the digital realm in finance. Be sure to take advantage of computer classes and clubs offered in your school, and keep up with financial news on the Web.
Many careers in finance require a bachelor’s degree in accounting, finance, or economics. People at the top levels of the field often have a master’s degree in business administration (M.B.A.). However, there are plenty of opportunities for people with associate’s degrees and high school diplomas, as well. A great way to gain experience in banking careers, for example, is to obtain a part-time bank teller position while you are in high school or college. You can also find customer service and data entry positions with finance and insurance firms, which will provide you with solid experience and a better idea of the many opportunities available within the industry.
Finance Careers Outlook
The U.S. Department of Labor predicts that many parts of the finance cluster will grow more slowly than the average over the next 10 years. Opportunities in finance are directly affected by ups and downs in the economy. When an economic crisis like the one that occurred in 2008–2009 takes place, the outlook becomes uncertain. However, there will still be opportunities for finance professionals with good experience and a keen eye towards the latest social and technological developments. Skilled finance, investment, banking, and insurance professionals will be in high demand as older people plan their retirements and secure their financial futures. Candidates who come to the field with solid academic, technological, and real-world experience should be able to find jobs for years to come.
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