If you’re like me, you equate the word finance with Wall Street. I have always associated the world of finance with flashy investment bankers who live like rock stars and make millions of dollars. Because of this association, I have also always thought of the world of finance as a stressful, cut-throat, and sometimes dishonest environment.
What is the truth about working in finance, though? Is working in finance fun or is working in finance stressful?
The truth, of course, is that it depends. Unlike my generalized and skewed perception of the world of finance, the industry actually encompasses a wide range of careers. To inform myself and try find the truth about working in finance, I decided to do some research. Below are some of my findings.
What Does it Mean To Work in Finance?
Before I start delving into the truth about working in finance, it may be a good idea to look at the types of jobs that people in the industry have.
If you’ve wondered before, “Why does everyone work in finance?” you may have come to this conclusion because many people do indeed work in finance.
I was quite surprised to learn how broad the scope of careers in the field is. Apart from investment banking, the financial sector includes retail and commercial banking, insurance, hedge funds, venture capital, brokerage firms, and various other financial services.
Since the finance industry has such a broad scope, it offers various opportunities for people with diverse skills, interests, ambitions, and personalities.
If you’re after the glitz and glamour, you can pursue a career in investment banking. Another prestigious role is working as a portfolio manager.
However, those who prefer working behind the scenes can choose from a wide variety of careers, such as software development, accounting, and tax preparation.
Some Myths About Working in Finance
There are a lot of myths surrounding the world of finance. While people who work in finance do sometimes rake in dirty money or rig the stock market, such scenarios are not representative of the financial industry as a whole.
If such preconceptions regarding the world of finance have led you to believe that you’ll be unhappy in finance, it’s time to debunk some common myths.
Only Go for a Career in Finance if You’re White, and a Male
Truth: The finance sector has traditionally been dominated by white males. And, yes, there is definitely still a gender gap in the finance industry, and people of color are also still underrepresented.
However, times are changing. Aspiring to a successful career in finance can seem daunting and challenging for women and people of color, especially if they’re aiming to fill C-suite positions. However, it is by no means impossible.
According to statistics supplied by Deloitte, women held 19% of C-suite roles and 21% of board seats within financial services institutions in 2021. Less encouraging is the fact that only 5% of CEO positions were filled by women at that time.
While these statistics by no means paint a picture of equality, the fact is that the percentage of female leaders in the financial sector is slowly increasing. Organizations like Diversitas, for instance, are helping to diversify the industry and create more opportunities for underrepresented communities.
You Only Get Paid Commission
There is a common misconception that people who work in finance work solely on a commission basis. While some jobs, such as stockbrokers, do get paid a commission, there are many finance professionals who earn a salary.
If you’re looking for a high-paying entry-level finance job, you can consider working as a loan officer, accountant, financial analyst, or personal finance advisor. Some of the highest salaries in the finance world are earned by investment bankers, portfolio managers, actuaries, and securities traders.
People in Finance Have No Work/Life Balance
While it’s certainly true that certain jobs in the finance sector require incredibly long hours, which makes keeping a healthy work/life balance challenging, many financial jobs come with regular hours and normal levels of stress.
As is the case in most other fields, the most demanding professions in the finance sector often offer the highest compensation and growth prospects. This means that finance professionals need to choose their careers with their needs in mind.
Finance careers that come with long hours include working as a financial analyst or as an investment or banking professional. Especially junior employees in these fields work the longest hours. It is not unusual for such employees to clock as many as 100 hours a week.
However, as they climb their career ladders, the working hours of professionals in these fields start to decrease. Those who are looking for a more balanced work/life profession from the get-go can consider a job in sales and trading or accounting.
The Truth About Working in Finance
Now that I’ve debunked a few common myths about the world of finance, you hopefully have a less skewed understanding of what it entails to work in the industry. To provide you with an even more comprehensive view of the industry, here are a few things to know before working in finance:
It’s Not All Glitz and Glamour
Although you’ve probably already gathered this much, I think it’s important to highlight the fact that working in finance is often less about glamour than it is about doing hard work, which means leg work too.
This is true even if you’re planning to enter the high-flying world of investment banking. While an investment bank may lap you up after you’ve completed your MBA, you should know that all you’ll be doing for a while is putting your nose to the grind.
Apart from working on financial modeling and quantitative financials until the time that you’re deemed fit to work on actual deals, you may even be required to do menial tasks like taking notes.
If you’re hoping to make it in a field such as investment banking, as I have mentioned before, you can also prepare yourself for super long hours in your first years. Regardless of when your workday ends, you’ll be expected to show up on time for the next day’s work.
You Don’t Necessarily Need a Degree in Finance or Business Administration
While having a degree in finance is probably the best way to get your foot in the door for many finance professions, it is possible to find employment in the industry with other types of degrees, such as in sales or communications. Many candidates gain entrance into their professions of choice by completing an internship.
Candidates who have undergraduate degrees in fields other than finance or business administration can also build their knowledge and skills in finance by completing a graduate degree in finance, such as an MBA.
Even if you’re over-qualified, it may be a good idea to opt for an entry-level position to get your foot in the door, and then work your way up. As is the case in any other industry, employees who demonstrate good interpersonal and communication skills will more quickly ascend the career ladder.
You Will Never Stop Learning
If you’re looking at entering the world of finance, you should know that the world of finance is constantly changing and evolving.
Everything from climate change to politics to technology to pandemics such as Covid-19 has an impact on financial markets.
The current low interest rates and a depressed economy, for instance, are likely to lead to banks looking for new revenue from new services and products. Coming up with such new services will require decision-makers to think outside of traditional limits and boundaries.
The rise of digital currencies is another example of a big change that has been happening in the financial sector. Despite the problems that cryptocurrencies have been facing this year, decentralized financial systems are here to stay.
As these examples demonstrate, making it in the world of finance, therefore, requires innovation, a willingness to constantly learn new things, and adaptability.
The World of Finance Offers Opportunities for All Types
While many people think that you have to be an extrovert to make it in the finance industry, this is not true. As I have mentioned before, the world of finance offers a wide array of opportunities, which cater to people with diverse personalities and needs.
While it’s important to have good communication skills in any position, you don’t have to be a social butterfly to find a suitable career in finance.
If you’re an introvert, you can consider working as an accountant, budget analyst, market research analyst, or financial manager, for instance. If you’re currently working in the industry and you’re thinking, “I hate working in finance,” perhaps you’re in the wrong position for your personality type. If so, consider a career shift within the finance industry.