Financial Managers Overview
This career requires at least a bachelors degree, although many go on to earn a masters degree or professional certificate. Furthermore, for some financial manager positions like branch managers in banks, adequate experience may take precedence over post secondary education during the hiring process. Competition runs high for job seekers in this market, but 3 out of 10 financial managers work in finance and insurance industries.
Nature of the Work for Financial Managers
Financial managers are employed at practically every firm, government agency and other type of organization. Generally, financial managers execute strategies for cash management, supervise the preparation of financial reports and oversee investment activities. Many managers will also design and implement long-term strategies and goals of their organization.
Because they are working close to the top managers and other departments to develop the financial data, they will often have access to state of the art computers and software programs. Many work in comfortable offices for long hours, between 50 or 60 per week. Travel may also be included, as financial managers generally are required to attend financial and economic association conventions, visit other firms or engage customers.
Depending on the organization, financial managers may also be known as controller, treasurer or finance officer, credit manager, cash manager, risk and insurance manager and manager of international banking. Each title designates a different role that the manager plays.
For example, controllers often direct the audit, accounting and budget departments. Mainly, they supervise a variety of financial reports that determine the present and future financial position of the organization, such as balance sheets, income statements and study of future expenses or earnings. They also must comply with policies by preparing special reports required by regulatory authorities.
A treasurer or finance officer is responsible for aligning the organizations budget with its financial goals. They do so by directing the investment of resources, calculating related risks, implementing strategies to raise capital in support of the firm’s growth and handling mergers and acquisitions. A credit manager authorizes the organization’s credit-rating measures, issuance of credit, and tracks the collection of past-due accounts.
Branch managers of financial institutions are increasingly being required to be knowledgeable about the various products that the bank offers. Depending on the bank, job tasks may include approving loans and lines of credit, attracting business by being a staple to the community, hiring employees and aiding customers with any account issues.
Financial managers may also perform a variety of tasks specific to their organization. For example, a healthcare financial manager will need to be aware of any issues regarding healthcare financing, or a government financial manager is required to be well-versed in the government funding and the budgeting process. They must stay on top of special tax laws and regulations that concern their industry.
As technology advances, the role of the financial manager, especially in business has evolved. Technology aids significantly in reducing the time spent on creating financial reports and as a consequence, financial managers now work on teams to complete more data analysis that they can offer to the senior managers for profit-maximizing ideas.
Training, Other Qualifications and Advancement for Financial Managers
Many employers now require financial managers to earn a masters degree in finance, economics or business administration because the programs help students understand financial analysis methods and technology. Some financial managers work in accounting departments, which usually requires employees to be certified public accountants (CPAs). At a minimum, financial managers have a bachelors degree in finance, business administration, economics or accounting.
In other situations, experience may be enough to attain a financial manager position. Bank managers are usually promoted from a loan officer or sales position when they demonstrate the necessary skills, while other financial managers may advance to their position through completion of formal management training programs offered by the organization.
Due to the nature of the work, financial managers should have strong math, business and interpersonal skills. Excellent communication skills are a necessity as the job often entails management of an entire department, problem-solving in teams and explaining complex financial data.
Advancement in this career is achieved by attaining a professional certificate. These are offered at various associations such as the CFA Institute, which awards the Chartered Financial Analyst title to investment professionals who have passed three challenging exams, have a bachelor’s degree and required work experience. For those with slightly less experience, the Association for Financial Professionals awards the Certified Treasury Professional designation to those who have passed three computer-based exams and have at least two years of job experience. Financial managers whose focus is in accounting are encouraged to become members of the Institute of Management Accountants and apply for the Certified Management Accountant (CMA) credentials, which is offered strictly to members who have a minimum of a bachelors degree, two years of work experience, pass the four-part examination and complete the required continued education.
The world of finance is constantly evolving, so continued education is absolutely vital to financial managers. Global trade, federal and state regulations and the production of new and complicated financial tools are all issues that financial managers must be educated on. Due to the importance of these issues, employers will often encourage their workers to take graduate courses and regularly attend professional conferences. Training programs on subjects such as accounting management, budget management, financial analysis, corporate cash management, information systems and international banking provided by financial management associations can be found at colleges and universities throughout at state and national levels. It is common for companies to pay for all or a portion of the costs for employees who pass the courses.
Employment and Job Outlook for Financial Managers
Financial managers hold approximately 495,180 jobs and can be found in every industry. Banks, finance companies, savings institutions, credit unions, insurance carriers and securities employ about 31 percent of financial managers, while 7 percent work for Federal, State or local government.
Employment is expected to grow 8 percent between 2008 and 2018, though jobseekers should expect high competition. Mergers, acquisitions and corporate downsizing are expected to hinder employment opportunities of financial managers, however as the economy picks up, the growth of reputable organizations and the establishment of new businesses will create a demand for financial managers. Also, the globalization in finance is a catalyst for growth and will expand the need for financial experts.
In times of short-term financial crisis, organizations may hire a financial manager to aid in raising profits. In other cases, a firm may always contract out their financial managers, however they will always be needed to supervise a contract.
Applicants should expect competition because there are more jobseekers than there are available positions. Those with the most experience in finance and accounting, such as those with a masters degree or certification are projected to have the most career options.
As the banking business evolves to include wealth management, investment products and insurance services, it will create a demand for branch managers with these expertise. Applicants who specialize in securities, or sell insurance will have better prospects.
Earnings and Salary for Financial Managers
The median annual wages for financial managers is $99,330. The middle 50 percent earned between $72,030 and $135,070. Salary levels depend on location, type of industry and the size of the organization. Also, it is common for financial managers to receive bonuses, which vary by the size of the firm. Median annual wages by highest employing industries are:
Securities and commodity contracts intermediation and brokerage: $134,940
Management of companies and enterprises: $115,520
Insurance carriers: $110,750
Local government: $78,650
Depository credit information: $77,280