Earning a risk management Master of Finance degree would unlock mid- and upper-level business jobs involved in identifying, analyzing, and mitigating financial uncertainties. Risk occurs in every sector from investments and insurance to healthcare and engineering. The EPA mandates that companies handling hazardous materials develop risk management plans to avoid danger if an incident occurs. It’s actually essential that all organizations hire well-trained risk managers to predict potential hurdles and recommend a suitable action or inaction to protect their assets. Risk managers apply various statistical methods to numerically evaluate risk versus reward.
For example, they could use standard deviation to measure return on investment on a bell curve. Jumping into risk management allows financial analysts to swerve around threats and improve the likelihood of meeting organizational objectives.
Salary
Survey statistics compiled on Salary.com show a median annual wage of $105,596 for risk management professionals across the United States. This is equivalent to a median base salary of $51 hourly. Certain companies will pay considerably more. Glassdoor shows that GE pays risk managers $121,478 yearly on average. Risk managers receive bonuses and benefits like health insurance for total median compensation at $155,356.
Beginning Salary
Young risk managers with less than five years of experience typically land in the bottom 10th percentile of earnings for base income around $78,791. However, working up the risk management ladder can eventually lead to an attractive salary above $136,060. Experienced risk management directors report a median wage of $143,000 on PayScale. Claiming the coveted title of Chief Risk Officer (CRO) also amounts to a $184,645 average salary.
Key Responsibilities
Risk managers are primarily responsible for locating, assessing, and allaying risks to lower the likelihood of financial loss. They’ll use complex calculations to create well-informed risk mitigation plans for senior executives. Risk professionals weigh the potential costs of:
- insurance claims
- employee benefits
- workplace accidents
- business operations
They research and report on the most cost-effective strategies for minimizing liability and loss. Directors have added responsibility in setting the risk analysis methods for subordinates under their leadership. It’s the risk management staff’s goal to continuously monitor company assets to help prevent any damaging choices.
Necessary Skills
Working in risk management requires a slew of business skills to properly identify ways to improve corporate efficiency. Risk managers must have in-depth mathematical ability to turn statistically significant findings into actionable plans. They’ll apply creative problem-solving skills to discover successful solutions that reduce loss as much as possible. Being a good communicator with public speaking skills is important for presenting to executive members. Risk management requires:
- analytical ability
- logical thinking skills
- attention to detail
They should be organized enough to compile documents and ledgers for their analyses. Risk managers should also have skills in:
- team-building
- project management
- leadership
- negotiation
- decision-making
Degree and Education Requirements
Entry-level risk analysts are often hired with a bachelor’s degree from four-year business schools accredited by the AACSB and ACBSP. Most common are undergraduate BBA majors in:
- finance
- economics
- statistics
However, some risk management concentrations exist. Advancing your career will likely require attending graduate school though. Risk management Master of Finance and MBA programs are appropriate. For 12 to 36 months, these programs introduce the fundamentals of business continuity and security against foreseeable threats. Take courses specifically in:
- financial engineering
- revenue management
- logistics
- production planning
- game theory or probability
Going ahead for a Ph.D. is wholly voluntary, but it would open risk management jobs in academia and research.
Pros and Cons of the Position
Delving into corporate financial portfolios by serving as a risk management professional will provide both advantages and drawbacks. On the sunny side, the finance specialty offers an exceptionally high salary with additional opportunities for performance bonuses. Demand is high for these six-figure positions as mitigating risk takes a front seat in today’s economy. Promotions to managerial and director positions is common with resume-building experience. Boredom isn’t a problem in risk management as managers review various facets of business operations to stop loss.
On the other hand, competition for advanced openings can be cutthroat because they’re less numerous. Roughly one-third of risk management professionals report working 50-70 hours weekly, sometimes with frequent travel. Stress can accumulate as risk managers are pressured to avoid costly situations. Risk management usually requires investing in a master’s education, which can cost between $20,000 and $120,000.
Getting Started
Gaining a thorough understanding of complex capital markets through a risk management Master of Finance isn’t always enough. Employers typically only hire risk managers with at least three to seven years of working experience. Get a head start weighing potential implications to business moves with an internship or cooperative education program during school. Popular risk management internships available at:
- JPMorgan
- Morgan Stanley
- Beecher Carlson
- Goldman Sachs, and more
You’ll likely move up the ranks by working as a risk analyst before progressing to manager and director. Certification can accelerate the path by verifying your training and know-how. For example, the Project Management Institute (PMI) offers a Risk Management Professional (RMP) credential for 3,000+ hours of experience. The Institute of Internal Auditors awards a Certification in Risk Management Assurance (CRMA) for passing a 100-question, two-hour exam.
Future Outlook
The Bureau of Labor Statistics places risk managers within the broad financial management umbrella to predict 10-year employment growth at 7 percent. Therefore, an estimated 37,700 positions will be added to the already 555,900 through 2024. Risk management professionals are in-demand to profitably coordinate investments and alleviate mounting risks. Job vacancies are spiking as baby boomers retire and organizations devote more funding to prevention. Companies going global also need risk managers to prevent catastrophic failure of operations in foreign, uncertain markets.
Master’s-level candidates will find good risk management job prospects with:
- banks
- insurance companies
- manufacturers
- government agencies
- health facilities
- mortgage offices
- consulting firms
- universities
Risk management is a totally engaged financial career that gives detail-oriented analysts the ability to creatively implement business solutions that thwart loss. CNN Money recognized risk management directors for having America’s #2 best job with an “A” for personal satisfaction. Whether you’re mitigating the threat of cyber attacks or natural disasters, risk management will allow you to make meaningful contributions to your company and society. If you’re hooked, begin looking for risk management Master of Finance programs at top-notch schools like NYU and Temple throughout our website.
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