December 20, 2019 Last updated February 13th, 2020 134 Reads share

Your Primer on MBA Finance – Career, Scope, and Compensation

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Opting for an MBA throws several options for you – finance, marketing, operations, and strategy among others. Out of these, finance is one of the most coveted specializations. Working and studying finance requires intensive use of skills in mathematics. Apart from a hefty salary package and a challenging job role, MBA in finance offers several opportunities for you. Not just the finance sector, studying finance brings opportunities from several other sectors including retail, manufacturing, banking, and finance, etc.

You study investment, strategy, financial planning, corporate finance, mergers & acquisitions, local and global economics, taxation, and much more as part of the MBA finance curriculum.

Pre-requisites for MBA in finance:

You will do well in MBA finance if you  –

  1. Have Good Mathematics and Reasoning Skills
  2. Have Strong Communication Skills
  3. Are Research and Detail-Oriented

While putting those skills to use, you will excel at —

  1. Financial & Management Accounting
  2. Financial planning
  3. Banking & Financial Services
  4. Corporate Finance
  5. Private Equity and Venture Capital
  6. Mergers & Acquisitions
  7. Risk Management
  8. Taxation
  9. Security Analysis and Portfolio Management
  10. International Trade and Finance

Roles in Finance

Finance sectors are extremely broad and offer several roles for finance graduates. A wide range of roles from accountancy to private equity jobs is available to MBA finance graduates.  What role you opt for is entirely up to your interest and the future you see for yourself.  Following are popular choices among finance graduates —

  1. Equity Research

Equity research is a major business function at investment banks, private equity firms, and stockbroking agencies. It’s one of the most sought-after careers in finance for graduates interested in the capital market. As an Equity Analyst, you will analyze stocks to find out the optimal time to invest in. This is done using fundamental and technical analysis. In this role, you will find opportunities at private equity funds, mutual fund houses, and venture capital. You can earn as much as $65,000 at the beginning of your career as an Equity Analyst. As you progress, the salary increases and reaches up to $100k as you become Head of Equity Research.

  1. Financial Planner

Financial planning is an integral business function across the industry. It is essential for companies to plan their finances in advance. Financial planners do budgeting and goal planning.
This includes taxation, compensation & benefits, among other things.

An entry-level financial planner earns as much as $65,000 annually. The salary increases depending on recommendations provided by the planner.

  1. Financial Advisor

These professionals suggest as well as render financial services to companies. They also suggest investment opportunities for their clients, which are mostly high net worth individuals. Financial advisors are expected to have a good understanding of corporate finance.

An average financial advisor earns $90,460 annually. This could go further to $200k per year depending on regions served in the U.S.

  1. Investment banker

Investment bankers are one of the highest-paid finance professionals around the world. They are expected to have a gamut of skills including knowledge of financial modeling, discounted cash flow, etc. Salesmanship is desirable in investment bankers as they often need to persuade clients for making investments.

An average investment banker can make anywhere between $80k-100k annually at the start of their career.

  1. Private Equity Professional

After investment banking, private equity is the most coveted profession among finance professionals. Private equity professionals work with PE firms to evaluate a business. They also do market research for PE firms to make an investment. This requires an understanding of business valuation and much more.

A private equity professional earns an average of $100,000 annually. As the professional progresses, the salary increases and reaches up to $341,000 annually (in the case of vice president). This includes a base salary as well as a bonus.

  1. Banking Professional

Retail banking is spread worldwide with national and international banks. These banks offer opportunities for individuals to shine as outstanding bankers. A typical banker is responsible for facilitating transactions and other banking services for individuals and businesses.

At an entry-level, a banking professional can earn anywhere between $60,000

  1. Finance Manager

These are professionals who look after the finances of a business. Starting from creating P&L sheets to building complete financial statements that include cost and inventory. Finance managers are the go-to people in all matters of finance in a company. They are expected to understand various aspects of the cost of business operations.

A finance manager earns as much as $71804 according to Indeed.

  1. Fund Manager

This is a professional who manages large funds on behalf of a company. These are responsible for the investment strategy of the fund. Mutual fund houses, pension funds, insurance funds, hedge funds, etc. hire fund managers for consistent return on the fund. Fund managers are expected to have relevant investing experience. Typically, a fund manager receives a percentage of the fund (Asset Under Management) as compensation.

Add-Ons to Your Specialization

Further, many MBA graduates can increase their employability by acquiring below certifications in finance-

  1. Certified Financial Analyst (CFA) – CFA is one of the most coveted certifications in the finance industry for its unmatchable competency testing. It’s a globally recognized certification and certified candidates are sought after by the industry. This credential opens a plethora of lucrative opportunities around the world for finance professionals.
  2. Chartered Private Equity Professional (CPEP) – This certification is offered by the United States Private Equity Council. This is a sought-after certification in the private equity industry and opens millions of opportunities after certification. For those who want to start a career in private equity, this is a solid certification.
  3. Certified Financial Planner (CFP) – This is a globally-recognized certification administered by Certified Financial Planners Board of Standards Inc. (CFPB) in the U.S and Financial Planning Standards Board Inc. (FPBS) in other countries. You will be exposed to lucrative job opportunities related to financial planning worldwide.
  4. Chartered Investment banking Professional (CIBP)—As the name suggests, this certification is meant for aspiring investment banking professionals. The certification equips you with financial modeling, investment analysis, equity research, etc. to offer valuable skills required for an investment banker to do well in your job. For fresh finance graduates, this certification opens door to job opportunities in investment banking.

 

 

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Ariaa Reeds

Ariaa Reeds

Ariaa Reeds is a professional writer, a blogger who writes for a variety of online publications. She is also an acclaimed blogger outreach expert and content marketer. She loves writing blogs and promoting websites related to education, fashion, finance, travel, health and technology categories.

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