According to the U.S. Bureau of Labor Statistics, most entry-level positions in the finance field require at least a Bachelor’s degree, although a Master’s degree may be needed to take on higher degrees of responsibility in the industry. Here are the five most important areas of study for those pursuing a career in financial services.
Accounting
Required coursework in accounting is intended to provide students with a solid foundation in the principles involved in recording and reporting key financial figures in the business environment. Topics covered typically include the following:
- Generally accepted accounting principles (GAAP)
- Cost accounting
- Auditing and reporting processes and standards compliance
- Recording and reporting expenses, assets, revenues and equities
- Taxation for individuals, estates and corporate entities
Financial reporting requirements for domestic and international clients
Accounting provides the foundation for a considerable number of finance activities. They’re is required by most employers as a part of the skills package they seek in new employees.
Mathematics
Advanced mathematics courses are also fundamental requirements for a career in the field of finance. Accurate mathematical computation is essential to assess risk when building a portfolio and to price securities based on complex algorithms. By collecting data on market positions and plugging that information into existing theorems, finance students can assess the likelihood that a particular security will produce profits at a certain price point. At a minimum, aspiring financial analysts should take classes in:
- college algebra
- linear algebra
- calculus
These courses can prepare students to solve the complex mathematical equations used to evaluate financial instruments in real-world situations.
Statistics
A thorough grounding in statistics can provide students with the skills needed to create and use predictive models. Among the most common applications of statistical methods are:
- probability theory
- expectation pricing
- arbitrage pricing
Finance students typically learn techniques that include basic statistical methods
Statistical software used to create predictive models, sometimes referred to as econometrics
- Visualization of data to provide added support for statistical analysis
- Data mining and big data analytics
- Properties of distributions and dispersion measures
Most curricula offer students hands-on experience with a variety of industry-standard software programs used to model or to interpret data more quickly and efficiently.
Economics
Classes in both microeconomics and macroeconomics can provide valuable perspective on the forces that affect financial markets:
- Microeconomics coursework focuses on the factors that can influence profitability and financial success for individual consumers and companies. Among the primary concepts examined in these classes are:
- Supply and demand
- price and output
- production models are
- Macroeconomics is the study of large-scale trends and conditions in national and international finance. Topics covered generally include:
- inflation
- aggregate consumption and expenditures
- gross domestic product figures
- other elements that can affect the economic conditions within a specific country or group of countries
Students can combine both the big-picture information derived from macroeconomic studies and the smaller-scale approach of microeconomics. They can then can assess market conditions more accurately in both the short and the long term.
Information Systems
The increasing role of computer modeling and analytic software in the finance field has led to added demand for employees with solid skills in:
- system implementation
- resource planning
- computing technologies
Most students will never need to design or program their own modeling software. However, familiarity with commonly used software packages and knowledge of the applications used is a real necessity for success in the finance industry. Depending on the curriculum chosen, this training may be included as part of statistical studies or as recommended electives for degree-seeking students.
Concluding Thoughts
After graduation, most financial analysts will seek licensing from the Financial Industry Regulatory Authority (FINRA) to ensure the widest range of employment opportunities throughout their careers. By focusing on these five areas of study, aspiring fund managers and financial advisors can enjoy increased success in their chosen fields of endeavor.
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