Your Cheat Sheet to Financial Professionals

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• By Henry Truc
 
• October 12, 2010

What is a financial professional? The term loosely covers anyone that works in an industry dealing with, well, finance. This could be someone as prominent as a stock broker on Wall Street or someone as common as your local insurance agent or tax accountant. Knowing the area of expertise each one deals with will help you pinpoint the right hire to help you meet your financial goals. After all, you wouldn’t have your insurance representative do your taxes or your CPA accountant picking your stocks.

The following is a simple break down of five of the most common industry professionals working in finance. While some responsibilities do blend together and some professionals do double dip in expertise, this guide should help clarify where each professional fits in the world of finance.

Financial Planner

While their services vary widely, most financial planners review the whole of a client’s monetary situation and devise a strategy for accomplishing their savings, debt and investing goals. They also help serve as an investment manager to plan for major expenditures like retirement, college or a home purchase. They may make recommendations for investment products and services that will assist in achieving these milestones.

Credentials: The most common certification that designates a qualified financial planner is a CFP credential. In order to become a Certified Financial Planner, a person must hold a Bachelors degree, obtain at least three years of financial planning experience, complete a CFP Board-Registered Education Program and pass a three-part, 10-hour exam. Continuing education is required to maintain certification.

Skills:

• Strong interpersonal skills
• Sales ability
• Familiarity with legal restrictions and laws regarding retirement plans, tax shelters, insurance and trusts
• Understanding of complex mathematical concepts, budgets and financial and legal documents

What to Look for: There is no state or federal law that requires a person claiming to be a financial planner to actually be certified. For this reason, you should only hire a professional that has credentials and can provide references.

The CFP Board can be contacted regarding inquiries about particular individuals. In addition to receiving certification, qualified financial planners are registered with the SEC or the state securities commission where the business is located. You should also determine if your financial planner has taken a fiduciary oath to “to act in good faith and in the best interests of the client.” Financial planners are either compensated through fee-only or commission structures.

Financial Analyst

Financial analysts are also known as security analysts or investment analysts. They work for banks, insurance companies, securities firms and other institutions examining financial data to help a company and their clients make investment decisions. The primary duty of most financial analysts is to perform extensive research, write reports and create presentations based on these results to aid in determining the value and appropriate action on investments.

Credentials: It’s recommended that analysts obtain a Masters degree in business administration (MBA) in addition to their Bachelors degree. Analysts may also receive certification by the CFA Institute in the form of a Chartered Financial Analyst designation.

In addition to holding a degree, Chartered Financial Analyst candidates are required to pass three exams that cover topics like accounting, economics and security analysis, and have four years of qualified, professional work experience. CFA charterholders are also obligated to adhere to a strict Code of Ethics and Standards.

Skills:

• Analytical, mathematical and problem-solving skills
• Advanced knowledge of statistical software and spreadsheets
• Ability to communicate complex financial ideas simply
• Motivated to seek out obscure information
• Possesses in-depth knowledge of the economy, tax laws and markets

What to Look For: Financial analysts are generally employed by institutions rather than individual investors, but you may still be interested in who is making recommendations for your portfolio within a firm. The combination of education, experience and success record will determine how qualified a particular analyst is and a designation as a CFA is seen as a key certification for financial analysts.

Accountant

Accountants keep track of money. Most have a specialty: Public accountants work for public accounting companies and do accounting, auditing, tax and consulting work. Management accountants keep track of the money earned and spent by the companies they are employed with. Government accountants ensure sure that government accounting records are correct and review the records of people doing business with the government. You can also find individual accountants to help you with your money records and taxes.

Credentials: A Bachelors degree in accounting is usually the minimum education requirement. Masters degrees in accounting or business with a concentration in accounting are also available. Any accountant that files a report with the Securities and Exchange Commission must be credentialed as a Certified Public Accountant. Obtaining certification as a CPA requires (in 46 states) completion of an extra 30 hours of related undergraduate college coursework.

Skills:

• Knowledge of finance, accounting, budgeting and cost control principles
• Proficiency with financial and accounting software
• Extensive knowledge of federal and state financial regulations
• Ability to analyze financial data and communicate effectively through financial reports, statements and projections

What to Look For: It is not necessary for an accountant to be certified, so any additional professional designation is demonstrative of advanced knowledge in their field. A CPA is probably the most well-known designation, yet many other special certifications may be obtained by accountants depending upon their particular focus. One such example is the Certified Management Accountant title conferred by The Institute of Management Accountants.

Stockbroker

Stockbrokers work privately or for stock brokerage houses. They seek out and assist retail clients, including both corporations and individuals, in determining the best investments based on their interpretation of financial data provided by analysts. They then facilitate the transaction on the client’s behalf. Additionally, stockbrokers develop investment plans for clients, maintain records, monitor transactions and review financial reports.

Credentials: While a college degree is not necessarily required, most stockbrokers have one. Many also pursue MBAs, especially for high-level positions. It is required that they are licensed by passing the General Securities Registered Representative Examination, also known as the Series 7. Many states require stockbrokers to pass the Uniform Securities Agents State Law Examination as well.

Skills:

• Excellent interpersonal and communication skills
• Ability to identify market trends and how they affect investments like stocks or bonds
• Comprehensive understanding of financial health of investments, balance sheets, P/E ratios, etc.
• Recognition skills of unique investment opportunities

What to Look For: Personal qualities and skills are often considered to be even more important than academic training. The track record of the stockbroker is also important. Since they are often entrusted with large sums of money and sensitive information, it is especially important that you trust your stockbroker. Like a financial advisor, you need to determine whether their motivations are dictated by their commission structure or helping you build wealth.

Insurance Agent

Insurance agents are generally the first point of contact between an individual, family or business and an insurance company. They specialize in one or several types of insurance, including life insurance, health insurance and property or home insurance. Insurance agents search for new clients and assist them in selecting an insurance policy. Captive agents work on the behalf of a single company while insurance brokers match the best policy with their client among several insurance companies they represent.

Credentials: The most important aspect of being an insurance agent is sales. Some insurance agents only have a high school education with a proven ability in sales while others obtain a college degree in business, economics or finance. A few schools offer specific Bachelors degrees in the field of insurance. Insurance agents learn most of their skills by shadowing other agents, however. Additionally, most states mandate licensure and ongoing education every two years.

Skills:

• Sales expertise
• Specialized knowledge of particular insurance type
• Aptitude for explaining highly technical concepts
• Ability and desire to stay up-to-date on constantly changing industry and coverage policies

What to Look For: All agents are required to be licensed to sell insurance in whatever state(s) they work. Separate licenses are needed for every type of insurance policy being sold. Most states require that an agent complete coursework and pass an examination before receiving a license. Be sure that any insurance agent you work with holds a license in their particular field, whether it be life, health, auto, property insurance, etc. Agents may also receive additional certification or professional designations by organizations such as The National Alliance for Insurance Education and Research.

You can cut down on a lot of confusion and wasted time by going straight to the professional who meets your financial needs. By above guide to match the appropriate person with what you’re looking for, you should have a good start in finding a qualified industry professional.

http://www.gobankingrates.com/personal-finance/your-cheat-sheet-financial-professionals/

Overview of Finance

Finance is about the EFFICIENT use of Money

• For economies
• For firms
• For individuals

Finance is not the same thing as Accounting.

• Finance is a subset of economics, applying economic tools to the financial information.
• Primary function of Accounting is record keeping.
• Finance = Analysis + Decision Making (Not Record Keeping)
• Finance is Forward Looking

Two Pillars of Finance

1.  RISK

2.  RETURN

Risk and Return combine to make Value.

Value is the dollar amount that reflects both the risk and the return of the investment opportunity.

Three big areas of finance

1.  Financial Markets
- Focuses on how financial markets and institutions affect the economy.
2.  Business or Corporate Finance
- Focuses on the tools businesses should use to make good decisions.
3.  Investments
- Focuses on the financial decisions that most directly affect individuals.


Major Areas of Business Finance

1.  Financial Analysis and Planning
- Focuses on figuring out what is happening in the firm and forecasting the future
2.  Working Capital Management
- Focuses on management of short-term assets and liabilities.
3.  Capital Budgeting
- Focuses on how the firm decides what assets to buy (what investments to make).
3.  Capital Structure
- Focuses on how the firm finances its operations

How To Land A Finance Job With A Bachelor's Degree

Finance is an extremely competitive profession, especially at the entry level. The desks of investment professionals' are piled high with the resumes of students who have dreams of big money, nice cars and getting on the path to being Masters of the Universe by the time they are 30. Finance is also a cyclical job market: when the stock market is booming, finance jobs boom as well, but when returns dwindle, so do the job listings. And even when the market is flush with jobs, finding a good job is key. Follow these five tips to dramatically increase your chance of landing a finance job even before hitting graduation.

Tip No.1 - Land An Internship

For entry-level positions, interviewers do not expect candidates to know much. Many companies have orientation and training programs that teach new recruits the specifics of what they need to know, but having background knowledge is still expected. An internship can help to fill in for the lack of full-time experience and is not as difficult to get as a real job. Internships do not generally require much, if any, prior knowledge. They will likely be based around grunt work, performing tasks that anyone can do, such as making copies. But they provide learning experiences, references, networking opportunities and something tangible to talk about in an interview. Doing several internships also provides a great display of work ethic, which is a sought-after quality in the finance industry. 

Tip No.2 - Start Early

If you start in the summer before your first year in college, you can have a total of four summer internships before senior year. Is it necessary to do that many? No, but why not? Many finance internships are paid, so there are no excuses. If you are going to get a summer job anyway, it is better to do something that will further your career instead of just flipping burgers. The same holds true when attending college in a metropolitan area. Instead of working part-time at the local clothing store during the school year, file papers for a local investment advisor.

Tip No.3 - Diversify Your Experiences

Don't do five internships for equity traders unless you're 100% sure you want to trade for a living. Try to switch it up a little and land internships around the industry. This will help you gain a better perspective in different areas and help you figure out what you really want to do. If you want to research bonds, an interviewer is likely to ask why. If you had an internship in fixed income and another in equities, you can give a more eloquent answer than, "I just like bonds." Also, the different branches of finance are generally interconnected somehow. Portfolio management makes use of trading and research, for example. Knowing a little about how the different sectors of finance work can give you an edge in the job market.

Finally, work hard at any internship you land. The references can be valuable no matter what, but more importantly, impressing your bosses during an internship can be a great way to open doors for a future full-time job with that company. Many of the summer analyst/internship programs at big banks are created to look for entry-level hires for the next year.

Tip No.4 - Learn to Talk the Talk

To get a job in finance, you should ideally pick a business-oriented major like finance or economics. Many companies say that this does not matter, and it is very common to hear, "We hire all majors - we even have art history majors working at XYZ Company." All is not lost for the art history majors, but it is still certainly better to apply for finance jobs with a finance degree.

Another great way to learn is to make reading the financial news part of your regular routine. Pick up a subscription to The Wall Street Journal and/or the Financial Times and read it every day. As a student, you can normally get discounted subscriptions for these publications. Picking up a weekly magazine like The Economist orBarron’s will help expand your knowledge as well.

Immersing yourself in financial reading will help you get used to the terms and jargon of Wall Street, which is one of the biggest hurdles to cross. Do you know what MBS, CDS, BPS, EBITDA and federal discount rate mean? Regularly reading the financial news throughout college will help you pick up all the basics in due time. Even if you are studying this vocabulary in your courses, reading more about finance will help you to solidify that knowledge and feel more comfortable discussing it. Other ways of picking up financial knowledge are reading investing books, from basic to advanced topics, and reading tutorials and guides from financial websites (looks like you're already on the right track there). Treat learning the financial language the same as learning a foreign language. Instead of ignoring words that you don't understand, look those terms up to help broaden your knowledge.

Tip No.5 - Start Your CFA

As stated earlier, the job market in finance is always very competitive. Many applicants will have high GPAs and degrees from good schools and will have done the things listed above. It is always good to go above and beyond to differentiate yourself from the pack. One way of doing this is to take the Chartered Financial Analyst (CFA)Level 1 exam. The CFA designation is well respected in the financial industry. You'll need to pass three exams and have four years of eligible work experience to obtain the designation, but the first exam can be taken in the final year of a bachelor's program, either in December or June.

Financial professionals know the amount of time and dedication that the program entails (a minimum of 250 hours of study is recommended per exam), so coming out of an undergraduate program having passed the first exam will certainly make you stand out among other job candidates. The commitment to the program will display your work ethic and dedication to finance.

The Bottom Line

In both good and bad times, it is difficult for undergraduates to land a good entry-level position. Your resume is going to get lumped in with hundreds of others from candidates with strong credentials. The competitive nature of the finance job market means that focusing early, gaining experience with internships and gaining knowledge from following the news and reading will help you stay at the front of the pack. Finally, doing something to break off from the pack, like entering the CFA program in your final year of college, can better your chances of landing a good job. Work hard and good luck!

Read more: http://www.investopedia.com/articles/financialcareers/08/five-undergrad-tips.asp#ixzz28JbtpWhc

Overview of Finance

7 Courses Finance Students Should Take

Posted on Oct 24, 2011 by Brigitte Yuille

Most careers in finance involve finding effective ways to manage an organization's money, in order to create wealth and increase the organization's value. Finance majors prepare for this career by studying topics about "planning, raising funds, making wise investments and controlling costs," according to the College Board. This knowledge sets them up for a wide array of career paths in the areas ofcorporate finance, financial institutions and investments.

Tutorial: Education Savings Account

Executives in search of well-rounded finance students look for certain skills. Studies have revealed that these executives want schools to place more emphasis on quantitative, strategic, critical decision-making and communicative skills, which are sometimes best developed in classes outside of business schools. If you want to get the best possible preparation for the finance world from your undergraduate education, put some thought into which classes to take, that may fall outside the finance curriculum.

What Companies Want
Business leaders at Booz Allen Hamilton, a strategy and technology consulting firm, discussed areas of change that could be implemented at graduate business schools, in the article "What Business Needs from Business Schools." They suggested that more courses were needed to teach graduates to effectively manage individuals and team-driven organizations, provide tools for problem solving and provide better grounding in theory. They also recommended more courses outside of the traditional curriculum. (Companies are in need of strategic candidates, not walking resumes. Learn more in Business Grads, Land Your Dream Job.)

Finance professors at Duke and Berkeley have made suggestions for courses finance students should take, outside of their business school curricula. John Graham, a finance professor at Duke University's Fuqua School of Business and John O'Brien, finance professor at Berkley's Haas School of Business, recommend the following areas of study:

• Mathematics - Courses in college algebra and calculus will help students learn how to solve equations in complex financial markets. Statistics helps with decisions based on the likelihood of various outcomes and allows finance students to learn to reach conclusions about general differences between groups and large batches of information. It also explains the movements of a company's stock.
  
• Accounting - Financial and managerial accounting courses teach finance students how to understand, record and report financial transactions, monitor the company's budgets and performance, and examine the costs of the organization's products and services.
  
• Economics - Economics looks at how scarce resources are allocated to achieve needs and wants. A course in macroeconomics will teach finance students to understand the impact of financial market activities on the overall economy. Microeconomics will help them understand the behaviors that occur within individual firms and among consumers, as well as how various financial decisions can impact a firm's success. (For more on these subjects, read Economics Basics: What Is Economics?, Macroeconomic Analysisand Understanding Microeconomics.)
  
• Psychology - Financial professionals need to understand the behaviors and thought processes that help drive the movements in financial markets. A course in critical thinking teaches a finance student to reflect and evaluate an argument, and examine situations in all dimensions before applying a solution. This involves understanding what is not known about the situation versus what is known. Behavioral finance can help finance students explore why and how the financial markets aren't working, by examining how investors' behaviors are associated with market anomalies. This subject helps financial professionals determine where investors make mistakes and how to correct them, by examining the emotion or thought behind the actions. Behavioral psychology helps finance majors look at the observable and cognitive aspects of human behavior, within a financial environment. (Find useful insight about how emotions and biases affect the market in Taking A Chance On Behavioral Finance.)
  
• Writing - A course in technical writing will teach students how to put forth strong, clear and organized ideas, purposes and explanations in memos, reports and letters.

Additional Course Recommendations

The business consultants at Booz Allen Hamilton, Joyce Doria, Horacio Rozanski and Ed Cohen, made their case for curriculum reform and also recommended courses in psychology, economics and human behavior. In addition, they recommended classes in the following areas of study:

• Communications - A communications course, such as public speaking, helps finance students present financial reports and explain the meanings behind equations and numbers, to colleagues in group settings. It also helps with the management of people and organizational relations, such as in delegating responsibilities to employees within financial departments. Business students also need courses in corporate communications, crisis communications and PR strategies, according to a 2005 Public Relations Society of America study. It states how financial scandals and downturns can affect shareholder support, consumer confidence and corporate reputation issues. Finance students will benefit from knowing how to handle corporate reputation issues, should they arise.
  
• Ethics - Corporate scandals, such as the Enron scandal, which involved irregular accounting procedures, have also encouraged some business schools, such as the University of San Francisco and Loyola University Chicago, to add a course in ethics to their finance curricula. These courses focus on moral development in an attempt to stem future misconduct in business environments.

The Bottom Line 

Students studying finance will be tasked with big responsibilities in their careers. They will have to manage the flow of money at their companies and identify financial risks and returns to make effective business decisions. Those finance majors who want to have an edge over their competition, both during the initial post-graduate job search and throughout their careers, will take advanced mathematics, accounting, economics, psychology, communications and writing courses to gain a deeper insight into their jobs and a better ability to work effectively with people. 

For related reading, see Top Job-Search Mistakes For Finance Grads, How To Land A Finance Job Straight Out Of Undergrad and Top 10 Cities For A Career In Finance. 

Author: Brigitte Yuille
http://www.investopedia.com/articles/professionaleducation/09/non-finance-courses.asp?mobileapp=1

Khan Academy - Finance

Finance
Introduction to interest
Interest (part 2)
Introduction to Present Value
Present Value 2
Present Value 3
Present Value 4 (and discounted cash flow)
Introduction to Balance Sheets
More on balance sheets and equity
Home equity loans
Renting vs. Buying a home
Renting vs. buying a home (part 2)
Renting vs. Buying (detailed analysis)
The housing price conundrum
Housing price conundrum (part 2)
Housing Price Conundrum (part 3)
Housing Conundrum (part 4)
Return on capital
Mortgage-Backed Securities I
Mortgage-backed securities II
Mortgage-backed securities III
Collateralized Debt Obligation (CDO)
Introduction to the yield curve
Introduction to compound interest and e
Compound Interest and e (part 2)
Compound Interest and e (part 3)
Compound Interest and e (part 4)
Bailout 1: Liquidity vs. Solvency
Bailout 2: Book Value
Bailout 3: Book value vs. market value
Bailout 4: Mark-to-model vs. mark-to-market
Bailout 5: Paying off the debt
Bailout 6: Getting an equity infusion
Bailout 7: Bank goes into bankruptcy
Bailout 8: Systemic Risk
Bailout 9: Paulson's Plan
Bailout 10: Moral Hazard
Credit Default Swaps
Credit Default Swaps 2
Investment vs. Consumption 1
Investment vs. Comsumption 2
Bailout 11: Why these CDOs could be worth nothing
Bailout 12: Lone Star Transaction
Bailout 13: Does the bailout have a chance of working?
Wealth Destruction 1
Wealth Destruction 2
Bailout 14: Possible Solution
Bailout 15: More on the solution
Banking 4: Multiplier effect and the money supply
Banking 3: Fractional Reserve Banking
Banking 2: A bank's income statement
Banking 1
Banking 2: A bank's income statement
Banking 3: Fractional Reserve Banking
Banking 4: Multiplier effect and the money supply