Let's face it: future economic prospects aren't rosy these days. Australian unemployment statistics aren't especially frightening. We have fewer people out of work than some economically powerful countries. The poverty rate in Australia is a cause for concern, though.
The trouble is, the industrial sector is on the wane and the services sector is on the rise. We still do plenty of mining but manufacturing has declined dramatically. The textile industry, our second biggest manufacturing sector, has been all but shut down too.
Service sector jobs have filled the economic gaps departed manufacturing left behind. Tourism, hospitality and entertainment jobs, sure. Many find suitable work in the Information and Communication Technology (ICT) sector. This all sounds rather doom-and-gloomy, doesn't it? Is that all that's left for us?
Savvy students have found degrees in another 'safe' sector. Finance is a service and this industry is on the rise. A career in finance pays well and, best of all, these jobs are (mostly) recession-proof. These reasons alone make learning about finance worthwhile. But there's so much more to the story! Let's look at all the reasons you have to study finance.
What Is Finance?
Finance touches on anything that deals with currency and assets; their use and management. Banks, investment houses and credit card companies all provide local and international financial services. As do brokerages, investment and asset management firms. And, though they seem like a different industry altogether, Chartered Accountants and insurance agents are also financial services providers.
Companies need financial services professionals, too. Corporate finance jobs demand the brightest minds to oversee every aspect of these firms' finances. A finance professional does everything from keeping budgets on track to planning for growth and expansion, even into international markets. Their accounting departments keep a record of every expenditure and log every expense.
Corporate finance jobs include accountants, of course, but also budget analysts, financial planners and risk analysts. A risk analyst must examine every proposed venture to determine how much the company stands to gain and lose. They also go over all current initiatives to make sure they won't endanger the company's financial profile. For instance, if an investment turns bad, it's the risk analyst's job to bring it to the finance manager's attention.
The company's finance manager - the Chief Financial Officer (CFO), is responsible for everything concerning the company's finances. They decide what to invest in and how much that investment will be. They approve the company's annual budget and help justify budget overruns if need be. The finance manager position is heavy with responsibility. Not just for the corporation's continued financial health and growth but also for deciding how much employees are paid.
With a Bachelor's degree in Finance, you may choose to work for such a company. Or you could work as a credit analyst in a bank. Your duties will include approving borrowers' loan applications. To do that, you will review their past financial performance. Did they pay their bill on time? Do they have a steady income to pay the loan back with? What is their debt-to-income ratio?
Finally, if you're a student majoring in Finance and Accounting, you can continue your studies to become a Chartered Accountant. With this certification, you may work in a corporate accounting office or open your own accounting business. As a Certified Practising Accountant (CPA), you'll 'keep the books' for many different firms. You may also prepare individuals' tax declarations.
The finance industry has so many career opportunities! If you have the right education, you could choose the position that suits you best. That alone makes learning about finance worthwhile. You'll have to wait a while for that CFO title, though. You need to get some experience working in finance before you qualify for that job.
A Finance Tutor Reveals: How Much Do Jobs in Finance Pay?
We mentioned that finance industry careers are virtually recession-proof. In lean times, a company may lay off sales staff and other non-essential personnel. A factory might mothball a production line or two to cut back on their costs. But no matter what happens to the economy - local, national or international, a cadre of specialists has to help keep the money moving.
In the last 15 years, we've undergone three major economic shocks. First came the global financial downturn in 2008. Next, the coronavirus pandemic brought economies to a full stop. Today, economists are quaking over indicators predicting a dire economic forecast. Considering these recent trends, knowing there's job security somewhere is good news indeed.
Now, you only need to know how much finance industry jobs pay. The short answer is, 'pretty well, with some exceptions'. On average, a CPA earns more than $87,500 per year. An associate in a brokerage firm earns $10,000 less, on average, while a credit analyst's average annual salary is roughly $10,000 more.
You can start talking about big money (and more job security) at the corporate level. A corporate financial planner can earn as much as $125,000 per year. A risk analyst's average salary is $110,000. A corporate accountant, usually one of a team, might take home as much as $106,000 per year.
Indeed Australia reports all of these averages based on location. For instance, if you live in Victoria, New South Wales or Queensland, you stand to earn more than if you lived in Western Australia or the Northern Territory. Unfortunately, their report also does not indicate how much experience finance professionals must have to reach the posted average salaries for each region.
You should also know that not every job in finance is safe. For instance, stockbrokers - among the lowest-paid finance industry jobs, are quite expendable in hard economic times. Especially now, with online stock trading platforms anyone can access. However, insurance brokers (average salary: $75,000/year) are indispensable. And if you work in corporate finance, you may consider yourself among the most job-secure.
That online Indeed report nevertheless proves that getting a degree in finance is well worth your while. Now, factor in the recession-proof nature of most finance careers. That's a one-two punch that proves finance is worth the study.
Why Not Study Business?
Of course, you're free to choose whether to go for a graduate degree in Finance or your Master's in Business Administration (MBA). Both courses of study offer distinct advantages. One prepares you for corporate management. The other prepares you to work in only a small section of corporate affairs.
Therein lies the trouble. A good MBA program will teach a student everything they need to know about running a business. You'll learn about everything from ethics to logistics, along with aspects of labour law and some leadership skills. You'll also study just enough about finance to understand what a Finance and Accounting department manager has to say.
By contrast, if you study Finance at any of Australia's top university finance programs, you're training for a narrow, targeted speciality. You'll study finance operations in full and come away with a clear understanding of how finance works. You'll also earn the credentials to work in practically any area of finance, locally or internationally, even if you go no further than the undergraduate level.
Remember that management is not an industry. The management skills you learn in an MBA program apply to any management position in any industry. These jobs don't offer the level of security that work in the finance sector provides.
By contrast, only a manager with no business sense would let go of their accountant or other finance professional. Risk analysts' and financial planners' help is needed the most in times of economic strife. And you won't find a single government office sending their budget analyst home for lack of work. We're not saying that MBA degrees aren't valuable. We're simply pointing out that Finance and Economics degrees will help you more in the long run.
Is Finance a Good Major?
What an odd question! Being a university student in any discipline is good as long as you learn something from it. Will being a Finance student serve you well? That's without a doubt.
On the surface, degrees in finance show that the student knows how financial systems work. They understand financial instruments and how to use them for maximum gains. It shows they're good at analysing data to forecast and plan financial activity. It probably also shows they're good at maths.
Less obviously, it demonstrates your diligence and full attention to detail. It proclaims your intuitive nature and highlights your ability to spot and track patterns. It proves you are a critical thinker and a problem solver; qualities desperately needed in the workforce today.
Finance degrees don't limit anyone to careers in the finance industry, either. You may decide to teach maths and/or finance in high school. And even if you do choose to work as, say, an insurance agent - also a finance industry job, you can tutor in finance as a way to mentor future finance professionals.
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