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Source: General Services Administration
A bachelor's degree in finance or a related field is the minimum academic
preparation, but many employers increasingly seek graduates with a master's
degree and a strong analytical background.
The need for skilled financial management will spur average employment
growth; however, the number of applicants is expected to exceed the number of
openings, resulting in competition for jobs.
Nature of the Work
Practically every firm has one or more financial managers. Among them are
chief financial officers, vice presidents of finance, treasurers, controllers,
credit managers, and cash managers; they prepare the financial reports
required by the firm to conduct its operations and to ensure that the firm
satisfies tax and regulatory requirements. Financial managers also oversee the
flow of cash and financial instruments, monitor the extension of credit,
assess the risk of transactions, raise capital, analyze investments, develop
information to assess the present and future financial status of the firm, and
communicate with stock holders and other investors.
In small firms, chief financial officers usually handle all financial
management functions. In large firms, these officers oversee financial
management departments and help top managers develop financial and economic
policy, establish procedures, delegate authority, and oversee the
implementation of these policies.
Highly trained and experienced financial managers head each financial
department. Controllers direct the preparation of all financial
reports—income statements, balance sheets, and special reports, such as
depreciation schedules. They oversee the accounting, audit, or budget
departments. Cash and credit managers monitor and control the flow of cash
receipts and disbursements to meet the business and investment needs of the
firm. For example, cash flow projections are needed to determine whether loans
must be obtained to meet cash requirements, or whether surplus cash may be
invested in interest-bearing instruments. Risk and insurance managers oversee
programs to minimize risks and losses that may arise from financial
transactions and business operations undertaken by the institution. Credit
operations managers establish credit rating criteria, determine credit
ceilings, and monitor their institution's extension of credit. Reserve
officers review their institution's financial statements and direct the
purchase and sale of bonds and other securities to maintain the
asset-liability ratio required by law. Managers specializing in international
finance develop financial and accounting systems for the banking transactions
of multinational organizations. A working knowledge of the financial systems
of foreign countries is essential.
Financial institutions—such as banks, savings and loan associations, credit
unions, personal credit institutions, and finance companies—may serve as
depositories for cash and financial instruments and offer loans, investment
counseling, consumer credit, trust management, and other financial services.
Some specialize in specific financial services. Financial managers in
financial institutions include vice presidents, bank branch managers, savings
and loan association managers, consumer credit managers, and credit union
managers. These managers make decisions in accordance with policy set by the
institution's board of directors and Federal and State laws and regulations.
Due to changing regulations and increased government scrutiny, financial
managers in financial institutions must place greater emphasis on accurate
reporting of financial data. They must have detailed knowledge of industries
allied to banking—such as insurance, real estate, and securities—and a
broad knowledge of business and industrial activities. With growing domestic
and foreign competition, financial managers must keep abreast of an expanding
and increasingly complex variety of financial products and services. Besides
supervising financial services, financial managers in banks and other
financial institutions may advise individuals and businesses on financial
Financial managers are provided with comfortable offices, often close to
top managers and to departments which develop the financial data these
managers need. Financial managers typically work 40 hours a week, but many
work longer hours. They are often required to attend meetings of financial and
economic associations, and may travel to visit subsidiary firms or meet
Financial managers held about 800,000 jobs in 1996. Although these managers
are found in virtually every industry, more than a third were employed by
services industries, including business, health, social, and management
services. Nearly 3 out of 10 were employed by financial institutions—banks,
savings institutions, finance companies, credit unions, insurance companies,
securities dealers, and real estate firms, for example.
Training, Other Qualifications, and Advancement
A bachelor's degree in finance, accounting, economics, or business
administration is the minimum academic preparation for financial managers.
However, many employers increasingly seek graduates with a master's degree,
preferably in business administration, economics, finance, or risk management.
These academic programs develop analytical skills, and provide knowledge of
the latest financial analysis methods and information and technology
management techniques, widely used in this field.
Experience may be more important than formal education for some financial
manager positions—notably branch managers in banks. Banks typically fill
branch manager positions by promoting experienced loan officers and other
professionals who excel at their jobs.
Continuing education is vital for financial managers, reflecting the growing
complexity of global trade, shifting Federal and State laws and regulations,
and a proliferation of new, complex financial instruments. Firms often provide
opportunities for workers to broaden their knowledge and skills, and encourage
employees to take graduate courses at colleges and universities or attend
conferences relating to their specialty. Financial management, banking, and
credit union associations, often in cooperation with colleges and
universities, sponsor numerous national or local training programs. Persons
enrolled prepare extensively at home, then attend sessions on subjects such as
accounting management, budget management, corporate cash management, financial
analysis, international banking, and information systems. Many firms pay all
or part of the costs for those who successfully complete courses. Although
experience, ability, and leadership are emphasized for promotion, advancement
may be accelerated by this type of special study.
In some cases, financial managers may also broaden their skills and exhibit
their competency in specialized fields by attaining professional
certification. For example, the Association for Investment Management and
Research confers the Chartered Financial Analyst designation to investment
professionals who have a bachelor's degree, pass three test levels, and meet
work experience requirements. The National Association of Credit Management
administers a three-part certification program for business credit
professionals. Through a combination of experience and examinations, these
financial managers pass through the level of Credit Business Associate, to
Credit Business Fellow, to Certified Credit Executive. The Treasury Management
Association confers the Certified Cash Manager credential on those who have 2
years of relevant experience and pass an exam, and the Certified Treasury
Executive designation on those more senior in treasury management who meet
experience and continuing education requirements.
Persons interested in becoming financial managers should enjoy working
independently, dealing with people, and analyzing detailed account
information. The ability to communicate effectively, both orally and in
writing, is also important. They also need tact, good judgment, and the
ability to establish effective personal relationships to oversee staff.
Because financial management is critical for efficient business operations,
well-trained, experienced financial managers who display a strong grasp of the
operations of various departments within their organization are prime
candidates for promotion to top management positions. Some financial managers
transfer to closely related positions in other industries. Those with
extensive experience and access to sufficient capital may start their own
Like other managerial occupations, the number of applicants for financial
management positions is expected to exceed the number of openings, resulting
in competition for jobs. Those with lending experience, and familiarity with
the latest lending regulations and financial products and services, should
enjoy the best opportunities for branch management jobs in banks. Those with a
graduate degree, a strong analytical background, and knowledge of various
aspects of financial management, such as asset management and information and
technology management, should enjoy the best opportunities for other financial
management positions. Developing expertise in a rapidly growing industry, such
as health care, could also be an advantage in the job market.
Employment of financial managers is expected to increase about as fast as the
average for all occupations through the year 2006. The need for skilled
financial management will increase due to the demands of global trade, the
proliferation of complex financial instruments, and changing Federal and State
laws and regulations. Many firms have reduced the ranks of middle managers in
an effort to be more efficient and competitive, but much of the downsizing and
restructuring is complete. The banking industry, on the other hand, is still
undergoing mergers and consolidation, and may eliminate some financial
management positions as a result.
The median annual salary of financial managers was $40,700 in 1996. The
lowest 10 percent earned $21,800 or less, while the top 10 percent earned over
According to a 1997 survey by Robert Half International, a staffing services
firm specializing in accounting and finance, salaries of assistant controllers
range from $41,000 in the smallest firms, to $81,000 in the largest firms;
controllers, $47,000 to $138,000; and chief financial officers/treasurers,
$62,000 to $307,000.
The results of the Treasury Management Association's 1997 compensation survey
are presented in table 1. The earnings listed in the table represent total
compensation, including bonuses. The survey also found that financial managers
with a master's degree in business administration average $10,900 more than
managers with a bachelor's degree.
Table 1. Annual earnings for selected financial managers, 1997
|Chief financial officer
|Vice president of finance
|Assistant cash manager
SOURCE: Treasury Management Association
Salary level depends upon the manager's experience and the size and location
of the organization, and is likely to be higher in larger organizations and
cities. Many financial managers in private industry receive additional
compensation in the form of bonuses, which also vary substantially by the size
of the firm.
Financial managers combine formal education with experience in one or more
areas of finance, such as asset management, lending, credit operations,
securities investment, or insurance risk and loss control. Workers in other
occupations requiring similar training and ability include accountants and
auditors, budget officers, credit analysts, loan officers, insurance
consultants, portfolio managers, pension consultants, real estate advisors,
securities analysts and underwriters.
Sources of Additional Information
For information about financial management careers, contact:
American Bankers Association, 1120 Connecticut Ave. NW., Washington, DC 20036.
Financial Management Association, International, College of Business
Administration, University of South Florida, Tampa, FL 33620-5500.
For information about financial careers in business credit management; the
Credit Business Associate, Credit Business Fellow, and Certified Credit
Executive programs; and institutions offering graduate courses in credit and
financial management, contact:
National Association of Credit Management (NACM), Credit Research Foundation,
8815 Centre Park Dr., Columbia, MD 21045-2117. E-mail address: email@example.com
For information about careers in treasury management from entry level to chief
financial officer, and the Certified Cash Manager and Certified Treasury
Executive programs, contact:
Treasury Management Association, 7315 Wisconsin Ave., Suite 600 West,
Bethesda, MD 20814.
For information about the Chartered Financial Analyst program, contact:
Association for Investment Management and Research, 5 Boar's Head Lane, P.O.
Box 3668, Charlottesville, VA 22903. Homepage: http://www.aimr.com/
For information about financial management careers in the health care
Healthcare Financial Management Association, Two Westbrook Corporate Center,
Suite 700, Westchester, IL 60154.
State bankers' associations can furnish specific information about job
opportunities in their respective States, or write directly to a particular
bank to inquire about job openings. For the names and addresses of banks and
savings and related institutions, as well as the names of their principal
officers, consult the following directories:
The American Financial Directory (Norcross, Ga., McFadden Business
The U.S. Savings and Loan Directory (Chicago, Rand McNally & Co.).
Rand McNally Credit Union Directory (Chicago, Rand McNally & Co.).
Polk's World Bank Directory (Nashville, R.L. Polk & Co.).
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