What are the different finance careers? | Investment banking| Asset management| Big 4 acc.| & Others

**Big 4 Guide:

As you probably know already there are a lot of different finance careers out there and can be hard to get your head around exactly what these firms do and how they link to each other when i was setting economics at university i knew i wanted to work in finance by getting onto a finance graduate scheme i have no idea of just how many finance careers there were

Out there now that i’ve been through that process and i’ve worked in finance i know who the players are in the system and what their role is in this video i’m going to break down the finance careers that you can get into i’m gonna cover the different types of firms out there and explain in simple plain english what they actually do i’ll also talk about some of the

Lesser discussed finance jobs – at the end of the video let’s get into it retail and commercial banks also known as high street banks these are the firm that the general public deal with so you and me for general banking needs they provide loans mortgages credit cards savings account products that you’ve heard often probably used their various roles within retail

Banking where you can work with the public directly so working in the branch for example so you need to have good people skills to be successful in this career there’s also the commercial or business arm of the bank which deals with small to large companies this is the sort of the bank that we normally don’t see unless your own business their main role is to provide

Business loans for multiple purposes and provide current accounts similar to individuals but they also provide other services such as over dross invoice financing and foreign exchange services etc similar to retail banking you can specialize in various aspects of the commercial banking career route you must not have heard about investment banking or even might have

Thought about joining an investment banking firm ask most fun and students and the large proportion of them say that they want to work in an investment bank after they graduate that’s largely because of these salaries and the prestige associated with working at an investment bank a skill a man on the street what an investment bank actually does and they probably

Won’t have a clue and he can’t really blame them for them investment banks work with corporations government’s high net worth individuals and institutions and provide them with a wide variety of services most modern-day investment banks have a variety of divisions and i think it’s worth spending a couple of minutes on each of them because a lot of people do want

To join investment banks after they graduate one of the core divisions in an investment bank is the m&a divisions this division provides advice to companies looking to make transactions so if the client is looking to sell a non-core division they’ll firstly help by preparing lists they’ll prepare the marketing materials for the client’s business so that’s the

Teaser and the confidential information memorandum which is the sim these are documents which are given to potential buyers to explain what the opportunity is they’ll speak to potential buyers and act as an intermediary between the buyer and the seller and they’ll advise the seller throughout the process so they can also be on the other side of the transaction when

They’re advising a client who’s looking to buy another company another core team of the investment bank is the capital markets team this division is then split into the equity capital markets team and the debt capital markets team in the simplest of terms both the subdivisions have the same aim that’s to help clients raise capital for various reasons a very common

Role that an investment bank plays is to support clients when they issue shares for the first time known as a initial public offering the equity capital markets teams will advise and support the client going through the ipo by structuring the deal writing the prospectus marketing it to potential investors so these are the asset management firms the hedge funds

The pension funds etc the debt capital markets team is fulfill the similar role helping clients to raise money to debt securities such as government bonds or corporate bonds they also help finance refinance and restructure existing debts as well another division within the investment bank is a sales and trading division this division advises and execute trades

For clients in various securities such as stocks and bonds derivatives which are just a type of financial instrument foreign exchange and commodities so let’s walk through what the division does so you’ve got the sales teams who will pick up the phone to client and talk to them about your recommendation if they agree with the thesis they’ll place a trade with the

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Bank and so that generates a commission for the bank this division also plays an important role as a market maker which basically means that it allows retail investors to go in and out of trades relatively quickly this is because the investment banks are always there on the other side of the trade this division has been facing a major trend in the last few years

Where a lot of trading has now become automated you’ve got the equity research team whose role is to analyze publicly listed companies and provide a buy sell or a hold recommendation they’ll dig into the financial statements of a company evaluate the market analyze the macroeconomic conditions and make forecasts of the earnings potential of those companies and

They’re also research teams focusing on more macro issues such as inflation population gdp etc related to various countries now there are other divisions in the investment bank as well such as their asset management division and their wealth management division which gives advice to high net worth individuals on how they can optimize their investments some investment

Banks also have their own merchant banking divisions which will invest in private corporations both debt and equity and they’ll invest in infrastructure projects and real estate etc all these divisions that have just mentioned now m&a sales and trading they all are referred to as front office divisions they call this because they’re client-facing and these are

The roles that generate the revenue for the bank and they’re really sought after there are also a variety of careers in the middle office of an investment banker the middle office includes risk management compliance technology but not just general it these are important departments for the bank to operator and day-to-day basis and some of these are even required

By regulation and finally there’s also the back office which contains support functions such as accounting hr n9t when people say investment banks a lot of people are thinking about the bahji crackage investment banks such as morgan stanley goldman sachs both raising their rates are the smaller investment banks as well such as lazarus jefferies rothschild etc in

Generally focused on providing m&a and capital rating advice like the bigger banks but they don’t participate in the sales and trading sometimes they do take part in the merchant banking or asset management though investment banking is known as a sell side because in very general terms they’re selling securities such as stocks and bonds to raise money for

Their clients on the other side of that exchange are the boys side firms and then they can’t abide securities to make a financial return on them by side firms include asset management firms hedge funds private equity and venture capital firms asset management as a concept simply explained is when an asset management firms tates and individuals or institutions

Capital and invest these insecurities to make a financial return for them the objective of an asset management firm is to maximize the return from an investment for a particular level of risk that their clients are willing to take on the clients of the asset management firms which also referred to as investment management firms include pension funds educational

Institutions sovereign wealth funds corporations governments and high net worth individuals in terms of the main divisions with asset management firm you’ve got the research and investment team that analyzed the companies and formulate an investment strategy which is the portfolio managers responsibility and you’ve got the traders who buy and sell the assets

At the optimal time you’ve also got the support functions such as legal and compliance risk it accounting etc another really important department is the sales and marketing team is responsible for maintaining and building relationships with the clients they’ll market the fund managers investment strategy and try and make sure that the firm received their clients

Money there many different types of asset management films you’ve got the global asset management firms such as blackrock vanguard fidelity etc they’re also uk domestic firms such as m&g investments there’s plenty of smaller firms as well which will specialize in investing in a particular type of asset or in a particular geography now aside from these asset

Management firms whose core operations associated with asset management they’re also the investment banks that had their own asset management divisions as a previously mentioned goldman sachs has their own asset management division and so there’s a likes of hsbc and bnp paribas aside from these insurance firms also have their own asset management teams that cater

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To third party clients similar to spear play asthma management film both management firm support services to high net worth individuals and families and their aim is to manage the assets of their clients and provide them advice on issues such as tax accounting inheritance planning etc so they take a more holistic view than pure asset management firms whose only

Responsibility is to preserve and grow the capital that the clients provide to them most management firms provide advice on a variety of different topics but they also manage the assets for their times and so they already do this directly to executing an investment strategy or they outsource this to a pure asset management firm now similar to asset management firms

We have standalone wealth management firms such as st. james’s place but we also have both management divisions within industrial banks such as ubs wealth management you can see a pattern emerging here investment banks provide avoid variety of services and that’s why there’s such an important part of the financial sector and finally to add to the confusion some

Asset management firms also have their own wealth management divisions moving on to hedge funds another a highly desired industry when it comes to career hedge funds also pool capital from multiple investors and investors and securities but there’s some crucial differences between hedge funds and asset management films the first difference is that asset management

Firms normally hold long positions and what that means is that they’ll buy a stock for example hoping that they’ll increase in value so that they can obviously sell it on and make a profit now hedge funds will try and make money when stock prices are falling as well and they do this too many ways and the primary way is through short selling hedge funds use of

Various types of financial instruments such as derivatives even to make profit when assets go down in value hedge funds are less regulated than an asset management firm because they only cater to institutional investors and accredited investors so in theory they should have a better understanding of what they’re investing in and what the risks associated with that

Are in terms of rolled it’s very similar to asset management firms there are a variety of different analyst roles where you’ll be analyzing different securities they’re also the portfolio managers who come up with the investment strategy and the traders who the boy and sell assets at the optimal time you also got the sales teams who were responsible for bringing in

The investors and the support functions such as risk it accounting etc just going over a couple of more by side entities private equity and venture capital private equity firms pull together capital from race institutions such as pension funds and wealthy investors and then invest these funds and private corporations they make a direct investment in these project

Businesses and they have a influence on how these companies operate on a day to day basis they’ll usually have a member of the pfm on the board of these private companies p femmes use a variety of different strategies such as leveraged buyouts and i’ll make a different video on that topic venture capital are just a type of private equity firm but they invest in

Early stage companies walls pe fans look to invest in more mature companies that have been running for a few years in both private equity and venture capital firms you’ll find similar type of roles you have jr. and allison associates and these titles vary according to different firms they’re responsible for researching and analyzing different companies and different

Sectors and they’re trying to find the next new addition to the company’s existing portfolio as you progress through these films you’ll play more fair role in executing deals and providing operational guidance to existing portfolio companies moving away from the investment and capita another big industry of the insurance sector within insurance you have large

Well recognized brands such as aig aviva allianz etc the main couriers include being an underwriter where to explain it at a very high level you’re responsible for analyzing the insurance applications and deciding whether they should be accepted nor they’re also claims adjusters and agents and brokers but that’s more for sales role than nature and finally they’re

Also the actuaries who measure the risk and pricey insurance talking about actuaries they’re traditionally associated with the insurance sector but these days they also work in various other sectors such as investment management and pension funds as well if you’re more mathematically you’re statistically inclined that might be a career option for you in terms of

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Other firms within the finance sector that the financial advisors that provide the general public bit financial advice on issues such as mortgages pensions etc they’re also the brokerage firms that enable in message to place trades in a variety of facets and finally there’s also very large pensions industry in the uk which has a variety of careers in it that was

A roundup of the firms within the financial services sector let’s look at another segment within the finance sector which is accounting probably the best place to start would be to go over the big four accounting firms and these are the four largest firms by revenue the big four include deloitte kpmg e y and pwc people call them accountancy firms but probably a

More apt label for them is professional services firms because they offer a variety of different services traditionally the big four have been known for their auditing and tax departments auditing in very simple terms is just ensuring that the financial statements of a company are accurate to some extent and the tax departments helps clients to comply with the tax

Regulations and also gives advice on a variety of different tax issues the third core division of the big four is consulting again they provide advice on a variety of different issues such as strategy operations financing and transactions they also have insolvency and restructuring divisions which take care of distressed businesses i won’t go into any more details

On that but i’ve actually covered the big four in none of the video and i’ve talked about topics such as services and how you can join them i’ll leave the link for that video in the description and also place it in the end card so if you are interested in learning more about the big four definitely watch that video after this one ends now aside from the big four

There are also other professional services firms that offer similar services such as pdl and our stem on the other side of the accountancy exactly you’ve got thousands of smaller accountancy firms providing the services to small and medium-sized businesses and they help them to complete their financial statements and provide a range of services so let’s move on to

Finance careers within the company itself so working in the finance departments for the likes of unilever for example as you can expect there were wide variety of roles and i’m just gonna talk about a few of them here a financial controller is someone who’s responsible for preparing the financial statements for a company and to put in place controls and budgets

Etc you can also work on the commercial side patrols in fp na which is financial planning in the houses or finance business reporting or even management accounting these are most strategic roles because you have some influence on the future direction of this company they’re also roles in the treasury department of a company the treasury department is responsible

For the cash flow of a company and working in that division you’ll be dealing with a lot of different stakeholders such as investors and banks as i said there are other specific roles as well such as internal audit but these are the three core ones so i’ve talked about a lot of different career paths there already but i’m going to talk about a couple of more which

Aren’t discussed as much one of these is to work for a financial regulator such as the fca that’s the financial conduct authority within these entities you could be responsible for coming up with new regulations or you could be on the enforcement side where you’re making sure that companies comply with the current regulations the final career route is to work in

A public body such as a government in all of the various entities underneath it or to work in the local government there are a wide variety of roles in the public sector which require financial skills on a day to day basis so that was an overview of the careers within finance or really hope you find our video informative and as i said before if you want to learn

More about the big four who are some of the largest graduate recruiters in the uk click on the video on your screen right now

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What are the different finance careers? | Investment banking| Asset management| Big 4 acc.| & Others By Finance Unboxed