Finance Today
Research
Technology Trends for Finance in 2012:
Insurance and Financial Industry Trends:
U.S. Banking Industry Trends and IT Impacts:
5 Trends for Plan Advisors in 2012:
5 Real Estate Trends for 2012:
- Mobile Money - Google Wallet stores credit card, prepaid cash card, offers, coupons, and loyalty cards information and transmits them to the checkout stand in a physical store to make the transactions.
- Geolocation Technologies - QR codes offer personalized discounts and on-the-spot deals to customers willing to choose their programs.
- Financial Social Networking - ArtofSaving.com and Saveup.com empower consumers with social activities like saving money, eliminating debt, investing wisely, and achieving their financial goals.
Insurance and Financial Industry Trends:
- Management of risk - expanding data must be analyzed to determine hazards and how to avoid them.
- Intellectual property control - assure that data is an asset and not a liability.
- Digital data security- more closely guarded safe zones within secured sites. Employ passwords and encryption systems to guard details of cash transactions, consumer purchases, bank accounts, and credit card accounts.
- Homework - ever changing world events requires people in insurance and financial industries to bring much of their work home.
U.S. Banking Industry Trends and IT Impacts:
- Product Enhancement and Redesign - enhanced product management capabilities in core systems, new capabilities such as person-to-person payments, more options for online and mobile payments.
- Cost Restructuring - improve distribution systems to focus on sales and guided selling rather than transaction processing, including a shift away from transaction processing systems and towards sales platforms, including mobile and online channels, as well as enhancements in videoconferencing, tablet, and other display technologies to support more flexible deployment of staff, thus maximizing the reach of high-value sales employees.
- Relationship Focus and Precision Pricing - greater demands on data mining, analytics and CRM capabilities. Improvements in campaign management systems and point-of-sale systems.
- Select Customer Acquisition - strengthening CRM capabilities as well as incorporating third-party consumer and business data to improve customer segment knowledge and drive more effective targeting of prospects.
5 Trends for Plan Advisors in 2012:
- Fee education and transparency related to all plan services.
- Improve plan participants' retirement readiness.
- Greater flexibility and customized "value for service" for retirement plans.
- Annual reviews and industry benchmarks.
- Redefine fiduciary status in advance of potential regulatory changes.
5 Real Estate Trends for 2012:
- Buyers will return.
- Foreclosures will increase.
- Prices will soften.
- Short sales will increase.
- Great agents will be VERY successful.
Understanding
- The role of finance in the business world is largely to help transfer and mediate the movement of money from investors to businesses that need it. The effective use of financing leads to growth of the business. Businesses are accountable to shareholders for the way company resources are managed, which helps ensure resources are used to maximize profitability.
- Ratio analysis uses financial or operating data from a company or industry to provide a basis for comparison. A company owner should evaluate the performance of the company using historical figures with those for industry competitors, and successful businesses in other industries. Such analysis will allow the owner to identify and quantify the company's strengths and weaknesses, evaluate its financial position, and understand risks it may be facing.
- Liquidity Ratios measure how readily a company can meet its obligations.
- Profitability Ratios give an indication of the earnings and profitability potential of a company.
- Asset Management Ratios gauge how efficiently a company can change assets into sales.
- Debt Management Ratios indicate how debt-leveraged a company is, and how it can manage the debt in terms of assets and operating income.
- Dividend/Market Value Ratios measure how well a company uses its assets to generate earnings.
- Profitability Ratios indicate earnings and potential profitability.
- Budgets are business tools used for planning, comparing, and controlling. Through the use of a Planning Budget, a company can project expected sales into targeted income and expenses for a future operating period. A Flexible Budget will allow a company to see what revenue and expenses should have been for the sales actually reached during that operating period. Any difference between the two would be an Activity Variance, showing that a change in expected activity should have caused a change in income and expenses. Comparison of the Flexible Budget to the Actual Results provides answers to questions about where deficiencies may have occurred, and directs a manager on where to work on improving operations.
- 7 Characteristics of money:
- Widely marketable - highly demanded and valued
- Transports easily - convenient to use
- Relatively scarce - high value in small quantities
- Relatively imperishable - able to use for future purchases
- Easy to store - convenient and problem free
- Easily divisible - amount can match purchase value
- All units are similar
- 3 Functions of money:
- Medium of exchange - used to intermediate the exchange of goods and services.
- Unit of account - standard numerical unit of measurement of the market value of goods, services, and other transactions.
- Store of value - able to be reliably saved, stored, and retrieved - and be predictably usable as a medium of exchange when it is retrieved.
- 3 Measures of money supply:
- M1 - (narrowest measure of money supply) currency, checkable deposits, traveler's check- money in the ordinary sense of the term, which can be directly used in payment of goods and services
- M2 - savings deposits, small-denomination time deposits, money market deposit accounts, money market mutual fund shares(non-institutional), consolidation adjustment - items that are the most easily and most frequently transferred into checking accounts or can otherwise be converted into cash quickly
- M3 - large-denomination time deposits, money market mutual fund shares (institutional), overnight and term Eurodollars, consolidation adjustment - lowest in liquidity scale
- Major sources of funds for a business:
- Equity shares - shares representing owner's capital - holder has full control of working of the company.
- Preference Shares - shares with preferred rights to payment of dividend
3. Loan financing - from specialized financial institutions, and development banks or commercial banks.
4. Internal financing - retained earnings
5. Public deposits
The Job Market
Commercial Banking Careers:
Skills - Broad business understanding and people skills, accounting and writing skills, detail oriented, conscientious, international talent, marketing, high-tech, product development
Options & Descriptions:
Credit Analyst - entry level job requiring evaluation of business and consumer loan applications made to your bank. Duties include projection a company's future cash flow, evaluating its current financial soundness, visiting and interacting with financial people at businesses, and dealing with lenders.
Loan Officer - involves making loans to businesses and consumers. Requires good selling skills, an ability to understand a business and a solid understanding of how banking works.
Branch Manager - Responsible for overseeing all activities at your branch, including opening new accounts, loan origination, solving customer problems, foreign exchange, and safe deposit boxes. Most importantly, establishing relations with customers.
Trust Officer - Deliver trust services, financial products, and advice to bank customers (often more upscale ones).
Mortgage Banker - Make mortgage loans to home buyers and businesses. Involves heavy contact with real estate professionals, credit checks, and dealing with new buyers.
Other jobs in banking: accounting, marketing and advertising, commercial card operations, securities transfer, wire operations, private banking, cash management services, installment loans, loan servicing, correspondent banking, personnel, operations and communications
Corporate Finance Careers:
Skills: problem-solving, adaptable, computer literate, endurance, good people skills, communication, networking, initiative, foreign language, risk management, engineering background
Options & Descriptions:
Treasurer - Duties involve supervision of Treasury department which is involved in financial planning, raising funds, cash management, and acquiring and disposing of assets.
Financial Analyst - Determine financing needs, analyze capital budgeting projects, long-range financial planning, analyze possible acquisitions and asset sales, visit credit agencies to explain firm's position, work on budgets, analyze competitors, implement financial plans, monitor market price of firm's securities, analyze leasing agreements and determine needs and methods of dealing with derivatives. Often assigned to a specific area, such as revenue, planning, capital budgeting or project finance.
Credit Manager - Duties include establishing policies for granting credit to suppliers, setting guidelines for collecting on credit, and considering whether to securitize receivables.
Cash Manager - Duties involve establishing relationships with banks, managing short-term credit needs, ensuring sufficient cash is on hand to meet daily needs, putting excess cash into a concentration account bearing interest, and handling international transfers of funds.
Benefits Officer - Manage pension fund assets, set up employee 401 (k) plans, determine health care benefits policies, work with human resources to set up cost-effective employee benefits.
Real Estate Officer - Involves finding real estate locations for a company, negotiation of lease agreements, acquisition of real estate, and valuation of properties.
Investor Relations Officer - Duties involve dealing with the investing public by disseminating financial information, responding to queries from institutional investors, issuing press releases to explain corporate events, and organizing teleconferences with investors.
Controller - Involves financial planning, accounting, financial reporting, and cost analysis. Will get involved in property, revenue, benefits, derivatives, lease and joint interest accounting. May need to develop forecasting models to project revenues and costs. May be called on to implement or work with a complex costing system, efforts at financial reengineering, transfer pricing issues, or interface with auditors.
Financial Planning and Wealth Management Career:
Skills: people, communication, synthesis, sales, analytical, creative, initiative
Description: Help individuals plan their financial futures. Understands investments, taxes, estate planning issues, and knows how to listen. Can be done within a company, or as a sole proprietorship. Most go solo or work within smaller practices.
Hedge Funds Careers:
Skills: investing, selling, high intelligence, domain knowledge, consistency, attention to detail, finance, quantitative, legal
Description: Runs all or part of a hedge fund, with the goal of maximizing return. Makes calls on a wide range of financial assets - from corporate bonds to stocks to currencies. Routinely engage in short selling.
Other jobs: junior trader, strategist, analyst, quant, software developer, risk manager, administrative role
Insurance Careers:
Skills: people, communication, sales, analytical, creative, initiative, synthesis
Options & Descriptions:
Actuary - Predict the risk of writing insurances policies on property, businesses, and people's lives and health. Must be informed about general societal trends and legislative developments which affect risk. Can work either withing insurance companies or for government, pension planning organizations, or third-party advisors.
Agent and Broker - Advise people and organizations on how to protect things they value by selling customers insurance contacts. You will be the first person contacted after an accident, fire or injury. Understanding of insurance contracts is essential.
Claims Adjuster - Negotiate insurance claims with people who have experienced a loss. Responsible for reaching a claim settlement that is fair to all parties.
Service Representatives - Link between agents who sell policies and insurance companies who write the policies. Requires knowledge of your companies products and ability to establish good rapport with those working for your companies.
Loss Control Specialist - Help keep accidents and losses to a minimum. Visit factories, shop floors, and businesses to identify potential hazards and help to eliminate them. Work with an organization to promote preventive health care in the workplace, or to limit exposure to certain types of ailments. Requires an understanding of safety management or engineering.
Risk Manager - Employed by an organization to help identify the risks that it faces, and to make recommendations for dealing with these risks. Recommendations may include the purchase of insurance, adoption of precautionary measures, and presentations to upper management. Involved in management of employee benefit plans.
Underwriter - Decide whether to provide insurance to applicants seeking coverage. Evaluates an applicant's exposure to risk and decides whether an applicant meets an insurer's standards. May become involved in setting prices for insurance applicants.
Investment Banking Careers:
Skills: people, communication, analytical, synthesis, creative, sales, initiative
Options & Descriptions:
Corporate Finance - Work to help companies raise capital needed for new projects and ongoing operations. Work to determine the amount and structure of fund needs of a client through equity, debt, convertibles, preferred, asset-backs, or derivative securities.
Capital Markets - Help companies originate new issues of debt or equity. Interacts heavily with individual equity and bond sales professionals who interact with institutional and retail accounts around the globe. Will often interact with other professionals including financial strategy, derivatives, currency trading, convertibles, and equity derivatives.
Mergers and Acquisitions - Help out with a team which acts as an advisor to a client, values transactions, creatively structures deals, and negotiates favorable terms. Duties could involve analyzing the appropriate form of participation.
Project Finance - Involves funding infrastructure and oil capital projects off of a company or government's main balance sheet.
Trading - Responsibilities would involve undertaking transactions in equities, bonds, currencies, options, or futures with traders at commercial banks, investment banks and large institutional investors.
Structured Finance - Positions involve the creation of financing vehicles to redirect cash flows to investors
Advisory - Work to determine a client's value, options for creating value or on a client's industry conditions.
Equity and Fixed Income Research - Responsible for making buy or sell recommendations to investors about a stock or bond. Duties involve visiting companies and heavy telephone contact with institutional investors.
Retail Brokerage/Private Client Coverage/Stockbroker - Sell stocks, bonds, insurance and other investments to individuals.
Institutional Sales - Responsible for conveying information about particular securities to institutional investors. Heavy contact with portfolio managers and your own firm's analysts and traders.
Ratings Analyst - Rate corporate bonds and structured finance.
Money Management Careers:
Skills: analytical, synthesis, people, sales, communication, creative, initiative
Options & Descriptions:
Portfolio Manager - Usually work for a money management firm or pension fund to select and manage investments which meet the goals of a group of investors.
Portfolio Management Marketing - Put together presentations for clients (working with the portfolio manager).
Investment Advisory - Provide investment advice, performance evaluation, and quantitative analysis to the money management sector.
Mutual Fund Analyst - Do the analytical work required before an investment is made by a mutual fund or large pension fund.
Private Equity Careers:
Skills: industry/operating knowledge, analytical, people, detail oriented, flexible, speed
Options:
Skills: sales, people, communication, initiative, analytical, creative, synthesize
Options & Descriptions:
Residential Real Estate Agent/Broker - Usually independent sales professionals who contract their services to real estate brokers in exchange for a commission-sharing agreement.
Commercial Real Estate Sales - Market office buildings, hotels and many other types of commercial real estate for brokers.
Real Estate Appraisal - Provide unbiased estimates of a property's value and quality. Usually work for banks or for appraiser firms, and will normally value properties by finding comparable sales in an area or by estimating the discounted value of cash flows expected from a property.
Property Management - Responsible for negotiating leases, ensuring that tenants are satisfied, that rent is paid, and that rents reflect market conditions.
Real Estate Advisory - Help investors care for property and, more importantly, select property in the first place, by suggesting areas and property types that are likely to experience price appreciation in the future.
Investment Banking - Groups dedicated to real estate, particularly the repackaging of mortgages into residential mortgage-backed securities, collateralized mortgage obligations, and commercial mortgage-backed securities.
Development and Construction - Take risks to develop new properties.
Real Estate Entrepreneur - Buy properties in hope that they will rise in value because of improvement in market conditions or renovations.
Skills - Broad business understanding and people skills, accounting and writing skills, detail oriented, conscientious, international talent, marketing, high-tech, product development
Options & Descriptions:
Credit Analyst - entry level job requiring evaluation of business and consumer loan applications made to your bank. Duties include projection a company's future cash flow, evaluating its current financial soundness, visiting and interacting with financial people at businesses, and dealing with lenders.
Loan Officer - involves making loans to businesses and consumers. Requires good selling skills, an ability to understand a business and a solid understanding of how banking works.
Branch Manager - Responsible for overseeing all activities at your branch, including opening new accounts, loan origination, solving customer problems, foreign exchange, and safe deposit boxes. Most importantly, establishing relations with customers.
Trust Officer - Deliver trust services, financial products, and advice to bank customers (often more upscale ones).
Mortgage Banker - Make mortgage loans to home buyers and businesses. Involves heavy contact with real estate professionals, credit checks, and dealing with new buyers.
Other jobs in banking: accounting, marketing and advertising, commercial card operations, securities transfer, wire operations, private banking, cash management services, installment loans, loan servicing, correspondent banking, personnel, operations and communications
Corporate Finance Careers:
Skills: problem-solving, adaptable, computer literate, endurance, good people skills, communication, networking, initiative, foreign language, risk management, engineering background
Options & Descriptions:
Treasurer - Duties involve supervision of Treasury department which is involved in financial planning, raising funds, cash management, and acquiring and disposing of assets.
Financial Analyst - Determine financing needs, analyze capital budgeting projects, long-range financial planning, analyze possible acquisitions and asset sales, visit credit agencies to explain firm's position, work on budgets, analyze competitors, implement financial plans, monitor market price of firm's securities, analyze leasing agreements and determine needs and methods of dealing with derivatives. Often assigned to a specific area, such as revenue, planning, capital budgeting or project finance.
Credit Manager - Duties include establishing policies for granting credit to suppliers, setting guidelines for collecting on credit, and considering whether to securitize receivables.
Cash Manager - Duties involve establishing relationships with banks, managing short-term credit needs, ensuring sufficient cash is on hand to meet daily needs, putting excess cash into a concentration account bearing interest, and handling international transfers of funds.
Benefits Officer - Manage pension fund assets, set up employee 401 (k) plans, determine health care benefits policies, work with human resources to set up cost-effective employee benefits.
Real Estate Officer - Involves finding real estate locations for a company, negotiation of lease agreements, acquisition of real estate, and valuation of properties.
Investor Relations Officer - Duties involve dealing with the investing public by disseminating financial information, responding to queries from institutional investors, issuing press releases to explain corporate events, and organizing teleconferences with investors.
Controller - Involves financial planning, accounting, financial reporting, and cost analysis. Will get involved in property, revenue, benefits, derivatives, lease and joint interest accounting. May need to develop forecasting models to project revenues and costs. May be called on to implement or work with a complex costing system, efforts at financial reengineering, transfer pricing issues, or interface with auditors.
Financial Planning and Wealth Management Career:
Skills: people, communication, synthesis, sales, analytical, creative, initiative
Description: Help individuals plan their financial futures. Understands investments, taxes, estate planning issues, and knows how to listen. Can be done within a company, or as a sole proprietorship. Most go solo or work within smaller practices.
Hedge Funds Careers:
Skills: investing, selling, high intelligence, domain knowledge, consistency, attention to detail, finance, quantitative, legal
Description: Runs all or part of a hedge fund, with the goal of maximizing return. Makes calls on a wide range of financial assets - from corporate bonds to stocks to currencies. Routinely engage in short selling.
Other jobs: junior trader, strategist, analyst, quant, software developer, risk manager, administrative role
Insurance Careers:
Skills: people, communication, sales, analytical, creative, initiative, synthesis
Options & Descriptions:
Actuary - Predict the risk of writing insurances policies on property, businesses, and people's lives and health. Must be informed about general societal trends and legislative developments which affect risk. Can work either withing insurance companies or for government, pension planning organizations, or third-party advisors.
Agent and Broker - Advise people and organizations on how to protect things they value by selling customers insurance contacts. You will be the first person contacted after an accident, fire or injury. Understanding of insurance contracts is essential.
Claims Adjuster - Negotiate insurance claims with people who have experienced a loss. Responsible for reaching a claim settlement that is fair to all parties.
Service Representatives - Link between agents who sell policies and insurance companies who write the policies. Requires knowledge of your companies products and ability to establish good rapport with those working for your companies.
Loss Control Specialist - Help keep accidents and losses to a minimum. Visit factories, shop floors, and businesses to identify potential hazards and help to eliminate them. Work with an organization to promote preventive health care in the workplace, or to limit exposure to certain types of ailments. Requires an understanding of safety management or engineering.
Risk Manager - Employed by an organization to help identify the risks that it faces, and to make recommendations for dealing with these risks. Recommendations may include the purchase of insurance, adoption of precautionary measures, and presentations to upper management. Involved in management of employee benefit plans.
Underwriter - Decide whether to provide insurance to applicants seeking coverage. Evaluates an applicant's exposure to risk and decides whether an applicant meets an insurer's standards. May become involved in setting prices for insurance applicants.
Investment Banking Careers:
Skills: people, communication, analytical, synthesis, creative, sales, initiative
Options & Descriptions:
Corporate Finance - Work to help companies raise capital needed for new projects and ongoing operations. Work to determine the amount and structure of fund needs of a client through equity, debt, convertibles, preferred, asset-backs, or derivative securities.
Capital Markets - Help companies originate new issues of debt or equity. Interacts heavily with individual equity and bond sales professionals who interact with institutional and retail accounts around the globe. Will often interact with other professionals including financial strategy, derivatives, currency trading, convertibles, and equity derivatives.
Mergers and Acquisitions - Help out with a team which acts as an advisor to a client, values transactions, creatively structures deals, and negotiates favorable terms. Duties could involve analyzing the appropriate form of participation.
Project Finance - Involves funding infrastructure and oil capital projects off of a company or government's main balance sheet.
Trading - Responsibilities would involve undertaking transactions in equities, bonds, currencies, options, or futures with traders at commercial banks, investment banks and large institutional investors.
Structured Finance - Positions involve the creation of financing vehicles to redirect cash flows to investors
Advisory - Work to determine a client's value, options for creating value or on a client's industry conditions.
Equity and Fixed Income Research - Responsible for making buy or sell recommendations to investors about a stock or bond. Duties involve visiting companies and heavy telephone contact with institutional investors.
Retail Brokerage/Private Client Coverage/Stockbroker - Sell stocks, bonds, insurance and other investments to individuals.
Institutional Sales - Responsible for conveying information about particular securities to institutional investors. Heavy contact with portfolio managers and your own firm's analysts and traders.
Ratings Analyst - Rate corporate bonds and structured finance.
Money Management Careers:
Skills: analytical, synthesis, people, sales, communication, creative, initiative
Options & Descriptions:
Portfolio Manager - Usually work for a money management firm or pension fund to select and manage investments which meet the goals of a group of investors.
Portfolio Management Marketing - Put together presentations for clients (working with the portfolio manager).
Investment Advisory - Provide investment advice, performance evaluation, and quantitative analysis to the money management sector.
Mutual Fund Analyst - Do the analytical work required before an investment is made by a mutual fund or large pension fund.
Private Equity Careers:
Skills: industry/operating knowledge, analytical, people, detail oriented, flexible, speed
Options:
- Provide equity to firms that have begun to generate revenue but still require capital to increase growth.
- Provide mezzanine debt - debt that is subordinated to bank debt and generally the last stop in the capital structure before equity.
- Participate in secondary funds that purchase private equity interests that are traded.
- Participate in funds that invest in other funds.
- Invest in turnaround situations - companies that are troubled or bankrupt and need crisis management.
Skills: sales, people, communication, initiative, analytical, creative, synthesize
Options & Descriptions:
Residential Real Estate Agent/Broker - Usually independent sales professionals who contract their services to real estate brokers in exchange for a commission-sharing agreement.
Commercial Real Estate Sales - Market office buildings, hotels and many other types of commercial real estate for brokers.
Real Estate Appraisal - Provide unbiased estimates of a property's value and quality. Usually work for banks or for appraiser firms, and will normally value properties by finding comparable sales in an area or by estimating the discounted value of cash flows expected from a property.
Property Management - Responsible for negotiating leases, ensuring that tenants are satisfied, that rent is paid, and that rents reflect market conditions.
Real Estate Advisory - Help investors care for property and, more importantly, select property in the first place, by suggesting areas and property types that are likely to experience price appreciation in the future.
Investment Banking - Groups dedicated to real estate, particularly the repackaging of mortgages into residential mortgage-backed securities, collateralized mortgage obligations, and commercial mortgage-backed securities.
Development and Construction - Take risks to develop new properties.
Real Estate Entrepreneur - Buy properties in hope that they will rise in value because of improvement in market conditions or renovations.
Finance Mentor
_Mentor - Matt Borders, The Borders Team at Priority Financial Group, LLC
Date - January 31, 2012
Objectives: How do most people enter the field? Is it possible to make a decent amount helping individuals who are not wealthy by the world's standards?
Marketplace:
What are your projections for this type of work or industry? Is it stable, growing, declining?
When and how did you get involved in this work?
What's a typical day like for you or someone in a similar position?
Would my background be appropriate for this type of work?
Date - January 31, 2012
Objectives: How do most people enter the field? Is it possible to make a decent amount helping individuals who are not wealthy by the world's standards?
Marketplace:
What are your projections for this type of work or industry? Is it stable, growing, declining?
- Clients for the financial industry are growing, with 10,000,000 retiring Baby boomers.
- Providers are shrinking with industry regulation, market volatility, and schemes.
- More government regulation means more restriction and oversight, which can be challenging.
- Things will look up when the economy turns around.
- Uncertainty abounds. Individuals experience market volatility, which creates lack of confidence, causing them to seek advice.
- Advanced money management is in high demand, which involves moving assets according to current market trends.
- Opportunities come with the sincere desire to help and serve others, not to be served.
- Sales is a good opportunity. It focuses on being patient through the client education process, as well as helping others.
- Compensation is usually commission and fee based.
- The base, which is not always available, can sit around the $25-30K mark.
- With commissions, it is possible to make between $150-250K.
- It is best to find the market you want to serve, then pursue those individuals and specialize in services which you would provide to them.
When and how did you get involved in this work?
- I have been involved in finance for 11 years.
- I started out as a medical student, but interned with my dad's financial business during the summers. I liked the experience I had of helping people, so I switched majors.
- In the beginning, I sold products for a different financial company, where I working with young couples. I realized that if I wanted to advance in my career, I would have to change markets. In order to make more money on less time, I had to work with wealthier clients.
- I had a lot of "on-the-job" training.
- In college, I majored in history and German. I also took some business classes.
- This can be a typical way people enter the field. Careers are usually enhanced with CE classes and industry designations.
- Industry training and certifications are important if people are going to take you seriously.
What's a typical day like for you or someone in a similar position?
- I usually arrive to the office sometime between 6-10am, and am gone by 5pm.
- Mondays are my prep day. I do portfolio evaluations for clients I will see during the week. We also have staff meetings.
- Tuesday - Thursday, I have 4-5 appointments per day. I average 6-8 phone reviews, and 12 face-to-face appointments per week. I spend about a 50/50 ratio between new and established clients.
- I usually work about 50 hours per week.
- This is pretty typical for someone in an established position.
- I like helping people.
- It is fulfilling to bring strategy to confused people.
- Making sure I am in compliance with regulation is time consuming. It takes away from the time I have available for clients.
- The number one crucial requirement is integrity.
- Good communication and people skills are an essential number two.
- Number three is hard work. Less than 10% of entrants last beyond the 4 year mark.
- It is also important to be able to accept direction. No one person knows it all. Being able to follow instructions if very important.
- Your form and appearance will make a good first impression.
- Enthusiasm about what you have to offer a client will influence their decisions.
- Maintaining integrity is crucial.
- You must be trustworthy to attract devoted clients.
- People who are disorganized, lazy, and unteachable will not last.
- People who think they already know everything will not be able to survive. My favorite quote is, "Spare me your blinding brilliance." I was told that many times in the beginning. There is much to learn.
- Industry designations increase what you are able to offer your clients.
- Increase and refine your clientele.
- Work in corporate jobs.
Would my background be appropriate for this type of work?
- Your background could definitely be a good start for work in this industry.
- Make sure you have an alternate source of steady income.
- Have a contact list of at 300 people you could introduce to your product, or use for networking purposes.
- Look to start in a good company, with good financing for new hires.
- Make sure the company has a high retention rate - Edward Jones is top.
- Plan to work in industry for at least 5 years before attempting to go off on your own.
- Insurance sales
- Real Estate
- Loan officer
- Banking
- Edward Jones would provide a good foundation.
- Look for intern openings in specific markets.
- NW Mutual has good internships
- Emily Borders - Marketing mentor
- Yes, absolutely!
Key Terms
Finance - the science that describes the management of money, banking, credit, investments, and assets. Looks at anything that has to do with money and the market.
Financial Manager - makes decisions for a company regarding how much money should be borrowed and the best mixture of debt and equity to obtain. Also has to find the least expensive sources of funds for the company to use.
ROI (Return on Investment) - a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. Calculation: Benefit(return) of investment/cost of the investment; expressed as a percentage or ratio.
Net Present Value (NPV) - compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account. If the NPV of a prospective project is positive, it should be accepted. If NPV is negative, the project should probably be rejected because cash flows will also be negative.
Stocks - an instrument that signifies an ownership position (called equity) in a corporation, and represents a claim on its proportional share in the corporation's assets and profits.
Bonds - a debt instrument issues for a period of more than one year with the purpose of raising capital by borrowing. Generally, a promise to repay the principal along with interest (coupons) on a specified date (maturity).
Stockholders - one who owns shares of stock in a corporation or mutual fund. For corporations, along with ownership comes a right to declared dividends and the right to vote on certain company matters, including the board of directors.
Government Securities - a government debt obligation (local or national) backed by the credit and taxing power of a country with very little risk of default. Includes short-term Treasury bills, medium-term Treasury notes, and long-term Treasury bonds.
Mutual Fund - an investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. They give small investors access to professionally managed, diversified portfolios, which attempt to produce capital gains and income.
SEC (Securities and Exchange Commission) - a government commission created by Congress to regulate the securities markets and protect investors. Also monitors the corporate takeovers in the U.S. Designed to promote full public disclosure and to protect the investing public against fraudulent and manipulative practices in the securities markets.
Stock Markets - market in which shares are issued and traded either through exchanges or over-the-counter markets. Provides companies with access to capital and investors with a slice of ownership in the company and the potential of gains based on the company's future performance. Primary market offers new issues, and secondary market offers subsequent trades.
Initial Public Offering (IPO) - first sale of stock by a private company to the public. Often issued by smaller, younger companies seeking the capital to expand, but can also be done by large privately owned companies looking to become publicly traded.
Investment Bank - a financial intermediary that performs a variety of services including underwriting, acting as an intermediary between an issuer of securities and the investing public, facilitating mergers and other corporate reorganizations, and also acting as a broker for institutional clients.
Venture Capital - Money provided by investors to start-up firms and small businesses with perceived long-term growth potential. Very important source of funding for start-ups that do not have access to capital markets. Typically entails high risk for the investor, but it has the potential for above-average returns.
Interest Rate - the amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets. Typically noted on an annual basis, known as the annual percentage rate (APR).
Dow Jones Industrial Average (DJIA) - The most widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip stocks , primarily industrials (chosen by the editors of the Wall Street Journal, which is published by Dow Jones & Company).
Debt Capital - capital raised through the issuance of bonds.
Security - 1. an investment instrument, other than an insurance policy or fixed annuity, issued by a corporation, government, or other organization which offers evidence of debt or equity. 2. Property which is pledged as collateral for a loan.
Primary Market - the market for new securities issues. In the primary market the security is purchased directly from the issuer.
Secondary Market - a market in which an investor purchases a security from another investor rather than the issuer, subsequent to the original issuance in the primary market, also called aftermarket.
Money Market Instruments - financial instruments issued by financial institutions or governments, such as certificates of deposit and treasury bills, that are considered to be extremely low-risk.
Secured Bond - bond backed by collateral, such as a mortgage or lien, the title to which would be transferred to the bondholders in the event of default. The most common form of secured bonds are mortgage bonds. Backed by real estate or physical equipment that can be liquidated. Thought to be high-grade, safe investments. Other bonds secured by the revenues created by projects.
Debenture - unsecured debt backed only by the integrity of the borrower, not by collateral, and documented by an agreement called an indenture.
Common Stock - securities representing equity ownership in a corporation, providing voting rights, and entitling the holder to a share of the company's success through dividends and/or capital appreciation.
Leverage - 1. the degree to which an investor or business is utilizing borrowed money. 2. what the debt/equity ratio measures.
Depository Institutions - a bank or company which holds funds or securities deposited by others, and where exchanges of these securities take place.
Federal Reserve System - the central banking system of the U.S., comprised of the Federal Reserve Board, the 12 Federal Reserve Banks, the Federal Open Market Committee, and the national and state member banks. Its primary purpose is to regulate the flow of money and credit in the country.
Monetary Policy - the regulation of the money supply and interest rates by a central bank, such as the Federal Reserve Board in the U.S., in order to control inflation and stabilize currency.
Insider Trading - trading by insiders; or illegal trading by insiders who trade based on insider information.
Preferred Stock - capital stock which provides a specific dividend that is paid before any dividends are paid to common stock holders, and which takes precedence over common stock in the event of a liquidation.
Stock Exchange - an exchange on which shares of stock and common stock equivalents are bought and sold.
Brokerage Firm - used interchangeably with broker when referring to a firm rather than an individual.
Mutual Fund - an open-ended fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives.
Financial Manager - makes decisions for a company regarding how much money should be borrowed and the best mixture of debt and equity to obtain. Also has to find the least expensive sources of funds for the company to use.
ROI (Return on Investment) - a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. Calculation: Benefit(return) of investment/cost of the investment; expressed as a percentage or ratio.
Net Present Value (NPV) - compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account. If the NPV of a prospective project is positive, it should be accepted. If NPV is negative, the project should probably be rejected because cash flows will also be negative.
Stocks - an instrument that signifies an ownership position (called equity) in a corporation, and represents a claim on its proportional share in the corporation's assets and profits.
Bonds - a debt instrument issues for a period of more than one year with the purpose of raising capital by borrowing. Generally, a promise to repay the principal along with interest (coupons) on a specified date (maturity).
Stockholders - one who owns shares of stock in a corporation or mutual fund. For corporations, along with ownership comes a right to declared dividends and the right to vote on certain company matters, including the board of directors.
Government Securities - a government debt obligation (local or national) backed by the credit and taxing power of a country with very little risk of default. Includes short-term Treasury bills, medium-term Treasury notes, and long-term Treasury bonds.
Mutual Fund - an investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. They give small investors access to professionally managed, diversified portfolios, which attempt to produce capital gains and income.
SEC (Securities and Exchange Commission) - a government commission created by Congress to regulate the securities markets and protect investors. Also monitors the corporate takeovers in the U.S. Designed to promote full public disclosure and to protect the investing public against fraudulent and manipulative practices in the securities markets.
Stock Markets - market in which shares are issued and traded either through exchanges or over-the-counter markets. Provides companies with access to capital and investors with a slice of ownership in the company and the potential of gains based on the company's future performance. Primary market offers new issues, and secondary market offers subsequent trades.
Initial Public Offering (IPO) - first sale of stock by a private company to the public. Often issued by smaller, younger companies seeking the capital to expand, but can also be done by large privately owned companies looking to become publicly traded.
Investment Bank - a financial intermediary that performs a variety of services including underwriting, acting as an intermediary between an issuer of securities and the investing public, facilitating mergers and other corporate reorganizations, and also acting as a broker for institutional clients.
Venture Capital - Money provided by investors to start-up firms and small businesses with perceived long-term growth potential. Very important source of funding for start-ups that do not have access to capital markets. Typically entails high risk for the investor, but it has the potential for above-average returns.
Interest Rate - the amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets. Typically noted on an annual basis, known as the annual percentage rate (APR).
Dow Jones Industrial Average (DJIA) - The most widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip stocks , primarily industrials (chosen by the editors of the Wall Street Journal, which is published by Dow Jones & Company).
Debt Capital - capital raised through the issuance of bonds.
Security - 1. an investment instrument, other than an insurance policy or fixed annuity, issued by a corporation, government, or other organization which offers evidence of debt or equity. 2. Property which is pledged as collateral for a loan.
Primary Market - the market for new securities issues. In the primary market the security is purchased directly from the issuer.
Secondary Market - a market in which an investor purchases a security from another investor rather than the issuer, subsequent to the original issuance in the primary market, also called aftermarket.
Money Market Instruments - financial instruments issued by financial institutions or governments, such as certificates of deposit and treasury bills, that are considered to be extremely low-risk.
Secured Bond - bond backed by collateral, such as a mortgage or lien, the title to which would be transferred to the bondholders in the event of default. The most common form of secured bonds are mortgage bonds. Backed by real estate or physical equipment that can be liquidated. Thought to be high-grade, safe investments. Other bonds secured by the revenues created by projects.
Debenture - unsecured debt backed only by the integrity of the borrower, not by collateral, and documented by an agreement called an indenture.
Common Stock - securities representing equity ownership in a corporation, providing voting rights, and entitling the holder to a share of the company's success through dividends and/or capital appreciation.
Leverage - 1. the degree to which an investor or business is utilizing borrowed money. 2. what the debt/equity ratio measures.
Depository Institutions - a bank or company which holds funds or securities deposited by others, and where exchanges of these securities take place.
Federal Reserve System - the central banking system of the U.S., comprised of the Federal Reserve Board, the 12 Federal Reserve Banks, the Federal Open Market Committee, and the national and state member banks. Its primary purpose is to regulate the flow of money and credit in the country.
Monetary Policy - the regulation of the money supply and interest rates by a central bank, such as the Federal Reserve Board in the U.S., in order to control inflation and stabilize currency.
Insider Trading - trading by insiders; or illegal trading by insiders who trade based on insider information.
Preferred Stock - capital stock which provides a specific dividend that is paid before any dividends are paid to common stock holders, and which takes precedence over common stock in the event of a liquidation.
Stock Exchange - an exchange on which shares of stock and common stock equivalents are bought and sold.
Brokerage Firm - used interchangeably with broker when referring to a firm rather than an individual.
Mutual Fund - an open-ended fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives.
References
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