--Robert W. Sarnoff
What is Financial Management?
A financial management degree is a specialized one -- ideal if you're interested in advancing your current career in financial services or in working at a management level with a financial focus. It is more function-driven than a general business degree.
Finance managers commonly focus on systems integration, business strategies, e-commerce, technology consulting, and human resources. Candidates for financial management positions need a broad range of skills. You should be a creative thinker and problem-solver. Interpersonal and communication skills are critical, because these jobs involve managing people and fostering teamwork to solve financial problems.
You will need to be comfortable with the latest computer technology. And as financial operations are increasingly affected by the global economy, successful managers must have knowledge of international finance. Proficiency in a foreign language can be an advantage.
Almost every organization requires professional financial management, and this increasing need will prompt a steady growth in demand for financial management graduates. From CFO to cash controller, there are a wide range of career choices available. Effective financial management is critical for efficient business operations, so well-trained, experienced financial managers with a strong grasp of the operations of all departments within their organization are valued for promotion to top management positions.
Career Education in Financial Management
Continuing education is vital for financial managers. Online college classes in financial management are continually improving in scope and offering more and more finance professionals the chance to advance their careers without sacrificing their current jobs or personal obligations.
Careers in financial management generally require a master's degree, which develops analytical skills and provides knowledge of the latest financial analysis methods and technology. The demand for graduate-level credentials reflects the growing complexity of global trade, shifting federal and state laws and regulations, and a proliferation of new and complex financial instruments. A bachelor's degree in accounting, finance, or economics, a good GMAT score, and work experience are standard prerequisites for graduate studies.
If you're not ready for an advanced degree program, a bachelor's degree with a financial management focus can be sufficient for entry-level positions or general management positions.
Financial firms often invest in their employees by paying for the graduate courses related to their specialty (this is becoming more common with the proliferation of online degrees, since the company does not have to lose the employee's work time). Obtaining a master's degree in finance is commonly done while working full time, in conjunction with certification as a CPA (Certified Public Accountant), Certified Management Accountant (CMA), or Chartered Financial Analyst (CFA). A master's degree in financial management takes about two years to complete.
Graduate certificates in financial management are suitable for specialized management career paths such as operations, strategic and organizational management. The time requirement is about two semesters or one year, depending on how quickly you take your courses and how extensive your academic background is.
What Can You Do With a College Major in Financial Management?
There are over 650,000 financial management jobs in the U.S. These managers are found in almost every known industry, but more than one quarter work in service industries like business, health, social, and management services. About 30% are employed by financial or related institutions, such as banks, savings and credit unions, finance companies, insurance companies, securities dealers, and real estate firms.
Employment in financial management is expected to see average growth through 2010. Candidates with expertise in finance and a master's degree should enjoy the best job prospects. As technology has reduced the time and staff required to produce financial reports and compile data, financial managers who are familiar with computer software and applications are spending more time on developing strategies and implementing the long-term goals of their organization - forecasting earnings, profits, and costs, and developing ways to increase profitability.
The securities and commodities industry will hire more financial managers to handle increasingly complex financial transactions and manage assets and investments, handle mergers and acquisitions, raise capital, and assess global financial transactions. Risk managers, who analyze finances for insurance and investment purposes, are in high demand. Financial managers can transfer their skills to closely related positions in other industries or use their experience and capital to start their own consulting firms.
Here are a few other examples of careers open to financial management graduates:
- Branch managers of financial organizations administer all the functions of a branch office, from hiring personnel to assisting customers with accounts, approving loans and lines of credit, and establishing a rapport with the community to build business.
- Cash managers supervise the flow of cash receipts and disbursements to meet the investment and business needs of their company.
- Controllers oversee the preparation of financial reports that review and preview the organization's financial position. They also prepare special reports required by regulatory authorities. Often, controllers oversee the accounting, audit, and budget departments.
- Credit managers are in charge of their firm's issuance of credit, and all policies and procedures surrounding it.
- Directors and managing directors (MDs) focus on corporate finance. MDs develop and cultivate relationships with various companies in order to generate corporate business for the firm. MDs typically specialize in one specific industry, to develop relationships among management teams of companies.
- Managers specializing in international finance develop financial and accounting systems for the banking transactions of multinational organizations.
- Risk and insurance managers work to reduce risks and losses that may arise from business operations and financial transactions undertaken by their company. They also manage the organization's insurance budget.
- Treasurers and finance officers manage the investment of funds and handle associated risks, oversee cash management activities, carry out capital-raising strategies to support a firm's expansion, and supervise mergers and acquisitions.
Some companies may hire financial managers on a temporary basis or hire financial management consultants for all their accounting and financial operations.
Certification, Licensure, and Associations
Certification is recommended and often required for a career in financial management. It indicates you have educational credentials, professional experience, and have maintained ethical industry standards. Certificates and licenses are as varied as the career paths in financial management.
Financial managers who specialize in accounting may earn the Certified Public Accountant (CPA) or Certified Management Accountant (CMA) designations. In general, to become a CPA you must complete 150 credit hours of college-level education, which translates to five years of college- and graduate-level work. You must then pass all four parts of the Uniform Certified Public Accountants Exam, and have about two years of accounting work experience.
The Certified Management Accountant (CMA) designation requires a bachelor's degree or a certain minimum score on specified graduate school entrance exams, according to the Institute of Management Accountants (IMA).
A CFA (Chartered Financial Analyst) designation is sponsored by the CFA Institute. You will require a bachelor's degree and three years of professional experience in a relevant field, and you will take three rigorous exams over the course of three years.
Financial Managers with at least two years of professional experience can obtain their Certified Cash Manager (CCM) credentials through the Association for Financial Professionals, by earning a passing score on its online exam.
Personal financial advisors are sometimes required to earn a Certified Financial Planner (CFP) certification. The requirements include completion of a college degree, passing a comprehensive set of exams, and following a strict code of ethics. A certification as a Chartered Financial Consultant (ChFC) is also useful in this field.
The Certificate in International Cash Management is designed for global finance professionals. The Association of Government Accountants offers the Certified Government Financial Manager certification to professionals with a bachelor's degree, two years of relevant experience, and a passing score on their three-part exam.
The National Association of Credit Management administers a three-part certification program for business credit professionals. Managers start from the Credit Business Associate and graduate to Credit Business Fellow and then Certified Credit Executive.