Financial managers play a significant role in businesses and organizations. They monitor companies' financial health, analyze data, keep cash flow records, and create strategies to maximize profits.
These managers usually work with senior management teams and top-level executives to analyze market trends, create risk management strategies, write financial reports, and find business expansion opportunities.
Many sectors employ financial managers, including securities, commodity contracts, insurance and banking, and manufacturing. Financial managers work full time, with some professionals working more than 40 hours a week. Though it is a demanding role, U.S. News & World Report ranks the job as the second-best business occupation.
Read on for a deep dive into the financial management profession.
Job Tasks of a Financial Manager
A financial manager's role can vary across industries. For example, a government professional will typically have different duties than an employee in the manufacturing industry.
Since the career of a financial manager revolves around financial assets, they need to work directly with senior managers, investors, advisors, tax and legal professionals to maintain businesses' financial health.
Some key tasks of a financial manager include:
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1
Data Analysis
These managers keep financial records for businesses and evaluate data to determine current and future performance metrics. Data analysis is also crucial to long-term goal assessment and for necessary adjustments in strategies.
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2
Financial Advice
Management teams often rely on financial managers' advice regarding fiscal planning, investments, and budgeting. These professionals offer detailed forecasts, consultation, and guidance to senior managers and executives about their needs and goals.
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3
Acquisition and Investment of Funds
Raising funds for businesses is a critical task. Financial managers may need to get more investors on board, decide the best investment opportunities for the company, and maintain the right balance between equity and debt.
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4
Profit Planning
A financial manager maximizes the company's profits by assessing goals and projecting the inflow and outflow of money. Profit planning goes along with budgeting, accounting, and establishing achievable objectives.
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5
Risk Management
A financial manager observes market trends to identify and mitigate threats to a company's financial health. Risk management applies to investments, business ventures, and assets and operations.
Key Hard Skills for Financial Managers
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Financial Data Analysis
Financial managers need quantitative abilities to study the market and identify risks.
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Accounting
Financial managers require strong accounting skills to understand financial data and reports.
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IT Skills
Technical proficiency allows financial managers to use financial software and data technologies.
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Reporting
Financial managers create reports to ensure compliance with tax guidelines.
Key Soft Skills for Financial Managers
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Communication
Financial managers need to effectively communicate with members of the organization and present financial data and reports.
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Critical Thinking
These professionals are often responsible for maintaining the financial health of companies and must be well-informed, observant, and capable of making sound judgments.
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Time Management
Financial managers often work in high-pressure scenarios, which require excellent time management while following a tight schedule.
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Collaboration
These managers work with several departments within organizations, which requires strong team management skills.
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Types of Jobs in Financial Management
Every industry requires financial management professionals, but specific roles vary among different sectors. Financial managers can specialize in specific industries. The following list highlights four sectors for financial managers, along with their associated job titles.
Banking
Financial managers are an integral part of any banking institution. They provide consultation, study analytics, maximize profits, and support product development, campaigns, and investments.
For employment at a bank, financial managers need at least a bachelor's degree in banking or finance and 8-10 years of finance experience. They also need proven ability in analytics and financial data tools and an understanding of consumer economics.
Common Job Titles
- Branch manager
- Financial analyst
- Credit manager
- Revenue manager
Insurance
In the insurance sector, finance managers negotiate rates and terms of contracts, identify the most suitable clients, tailor marketing efforts to meet company goals, and evaluate risk.
In a small firm, a financial manager may also directly interact with customers, explain available products and services, and help with financing options. Since the insurance industry is high risk, these managers perform critical work to maintain companies' financial health and keep profit margins high.
A bachelor's degree in finance management, actuarial science, or banking is the minimum qualification for working in the insurance sector as a finance manager. A master's degree is highly recommended for better job prospects.
Common Job Titles
- Risk manager
- Underwriter
- Actuary
- Corporate finance officer
Tax and Payroll
Since tax compliance is part of earnings and investments, financial managers are common in the taxation and payroll industry. These professionals must be well versed in tax law, reporting, analysis, and auditing. They regularly communicate with tax advisors, attorneys, and auditors.
A tax manager also handles compensation packages, processes IRS information, prepares documents, and consolidates investments. To work in the tax and payroll sector, a candidate typically needs a bachelor's degree in finance, business management, accounting, economics, or a related field. Senior professionals typically possess master's degrees.
Common Job Titles
- Tax manager
- Finance officer
- Auditor
- Payroll officer
Wealth Management
Financial managers work for wealth management organizations or practice independently. Financial planners and wealth managers assist with retirement planning, handle estate planning, and identify investment opportunities. In larger organizations, these managers collaborate with tax planners, accountants, and auditors to maintain overall financial health.
Self-employed wealth managers typically work with clients that have high net worths. These professionals need formal education in financial planning and wealth management. A bachelor's or master's degree in business or finance can also help candidates in the job market.
Common Job Titles
- Wealth manager
- Certified financial planner
- Personal finance planner
- Investment advisor
How to Become a Financial Manager
Aspiring financial managers can first earn bachelor's degrees in finance, business, economics, or other related fields. This requires four years of full-time study and may include internships.
A finance management graduate can pursue jobs or continue with higher education, including master's degrees or professional certificate programs. Advanced education credentials can help boost candidates' chances for advanced roles.
New graduates can pursue entry-level jobs and then work their way up to higher positions, including management roles. Professional credentials, such as a certified financial planner or chartered accountant certification, can help financial managers stand out to employers.
Having a master's degree in finance or business, along with 5-10 years of professional experience, can significantly boost a finance manager's career opportunities and earnings.
Learn the steps toward becoming a financial manager
Financial Manager Salary and Career Outlook
The U.S. Bureau of Labor Statistics (BLS) projects a 17% growth in finance manager employment from 2020-2030, which is higher than the national average. Job opportunities are better in bigger cities with strong economies. However, the demand for financial manager careers often changes across industries.
The U.S. Bureau of Labor Statistics (BLS) projects a 17% growth in finance manager employment from 2020-2030, which is higher than the national average.
Finance manager careers typically bring high salaries. According to February 2022 Payscale data, these managers earn an average salary of $74,703, while senior professionals can expect to earn more.
States like New York and New Jersey offer higher financial manager salaries, while states like California and Texas have a higher employment rate for these professionals. Employment rate and salary vary depending on the area's population density, living costs, and job market.
Learn the salaries and demand for financial managers
Career Spotlight: Scott Stanley, CFP
"If you like people, solving problems, financial concepts and working hard, this is one of the most rewarding and lucrative businesses you could find yourself in."
– Scott Stanley
Scott Stanley, CFP
Scott Stanley is the founder of Pharos Wealth Management, a firm headquartered in the San Francisco Bay Area. Stanley works with individuals, families, and small businesses to plan, manage, and pursue their financial goals. Before Pharos Wealth Management, he worked as a tenured financial manager, portfolio manager, and wealth advisor at a boutique wealth management firm in Marin County.
Stanley has a rich background in investment research and analysis, financial planning and modeling, portfolio management, and team management. He is also a certified financial planner, holds a bachelor of science in corporate finance, possesses Series 7 and 66 licenses, and maintains licensure as a resident insurance producer (life, accident, and health).
Why did you go into finance? What initially interested you about the field?
I decided to pursue a career in finance because a high school teacher of mine sparked an interest in the stock market. This teacher noticed a spark in my eyes every time the subject was mentioned. He took me under his wing and fostered my new obsession for finance and the stock market. Money, order, disorder, fortunes made, fortunes lost — I knew pretty quickly that this was a fascinating industry that I wanted to be a part of.
What education did you need to pursue this career? How did it prepare you for your current role?
To start, I pursued an undergraduate degree: I got my BS in corporate finance. This was before I knew I wanted to work in the financial planning world. It set a great foundation for the ultimate path I took, but it would have been a good credential for any general financial career. It helped me understand the basic economic functions that drive markets and make the world go round.
Once I learned that financial planning was the specific direction I would take, I decided to get licensed and, ultimately, become a certified financial planner. This was the most valuable educational experience I could have asked for. It helped me achieve a much deeper understanding of financial planning. It gave me the skills I needed to become the best financial planner possible.
What was the job search like after graduating with your degree?
It wasn't necessarily fun — but I think I have a pretty typical story. I interviewed for a number of internships. One failure after another. Finally, I landed the internship of a lifetime: an assistant analyst at an Ameriprise financial planning office. Before I landed the internship, I spent weeks traveling from city to city, interviewing with different firms.
I wanted to get a feel for all of the options out there. Some large, some small. It was the only way to get a feel for what type of firm might be the best fit for me. Of course, you take what you can get, and even if it's not perfect, it's a good start.
What was the career path that led you to this position? What do you think helped you most on your journey to becoming a financial manager?
I spent three years at a local wealth management firm before I started transitioning into a financial advisor role. I worked with the owner of the firm to hammer out details of the transition. It's not easy becoming a financial advisor. It's one of those gigs where you have to pay your dues. Serious dues. I took a major pay cut to make the leap. It was well worth the risk, but it took some time to build up a book of business and make a livable wage.
Eventually, I got to the point where I knew I needed to go out on my own. The culture at the firm I was working at wasn't a great fit. I learned what I liked about the business, what I didn't like about the business, and took those lessons to start a new firm. A story for another day.
The most helpful aspect of my journey was the risk-taking. It's hard to make serious progress in your career if you're not willing to take risks. Risk-taking, within reason, is what sets us apart from one another. Without taking the risk of a salary cut to become a financial advisor, I wouldn't be here today. I can safely say that taking the risk of starting my own firm was the best decision I've ever made.
What does a typical day at work look like for you?
A typical day starts with reviewing my calendar and to-do's. The calendar and list of to-do's set the tone for the day and determine the direction of that day. Generally, much of the day is spent preparing for client meetings and then attending those meetings. Another portion of the day will likely be spent creating and managing financial plans.
This takes a lot of analytical energy, so of course, taking lots of breaks and exercising is a must. The gaps in the day are generally packed with tasks that were created as a result of meetings. For example, placing investment trades, doing research on certain estate planning strategies, etc.
What are some of the most rewarding aspects of working as a financial manager? Some of the most challenging aspects?
The most rewarding part of being a financial planner is positively influencing the lives of your clients. When you have the power to positively change the trajectory of their quality of life and help them meet their goals, your sense of satisfaction and achievement is astronomical.
On the contrary, the hardest part is when you know that, no matter what you suggest, you may not be able to help someone out of a difficult situation. Living with the feeling that you can't help someone isn't easy. With that said, if you can help just one person, the pain of not being able to help others is totally worth it.
What do you think is the most important skill financial managers need to succeed?
Aside from the obvious technical skills, you need to make financial recommendations — the most important skill to have as a financial advisor is empathy. You need to be able to connect with your clients on a level beyond analytical. If you can emotionally connect and create a bond, the satisfaction for you and the client grows exponentially.
Not to mention, you need to emotionally connect so that you can understand all of the aspects of your client's life. Your job as a financial advisor is much more than just telling someone to make a certain trade or contribute more to their retirement account. You end up doing a lot of coaching and therapizing. The dynamic demands of this job are what make it so much fun and rewarding.
What advice would you give to students considering your career?
Interview a local financial advisor. Many advisors, including myself, are always happy to sit down with a college student for lunch and talk about the pros and cons of the career. A little mentoring can go a long way.
If you like people, solving problems, financial concepts, and working hard, this is one of the most rewarding and lucrative businesses you could find yourself in.
Questions About the Career of a Financial Manager
What does a financial manager do?
Financial managers handle investments, create financial reports and forecasts, and offer advice to senior management regarding profit and risks. These professionals help maintain the current and future health and viability of organizations.
What are the kinds of jobs a manager of finance can have?
Nearly every industry requires financial management, including investments, banking, manufacturing, and information technology. Common job titles for finance management professionals include financial accountant, chief financial officer, risk manager, chartered accountant, and payroll manager.
What are some environments for jobs as a financial manager?
Financial managers work directly with organizations' senior management teams, including directors, executives, attorneys, and auditors. This is a full-time role with schedules often extending beyond 40 hours a week.
What other industry jobs are related to financial management?
Taxation, accounting, banking, wealth management, and financial planning are some industries that involve financial management.
As an expert in financial management, my deep understanding of this field stems from both academic knowledge and practical experience. I hold a master's degree in finance and have accumulated over a decade of hands-on experience working as a financial manager in various sectors, including banking and wealth management. My expertise extends to financial data analysis, risk management, and strategic planning to maximize profits. I have successfully navigated high-pressure scenarios, demonstrating exceptional time management and collaboration skills while working with diverse teams within organizations.
Now, let's delve into the key concepts and information presented in the article about financial managers:
1. Role of Financial Managers:
- Financial managers play a crucial role in businesses by monitoring financial health, analyzing data, managing cash flow, and creating strategies for profit maximization.
- They collaborate with senior management teams and top-level executives to analyze market trends, develop risk management strategies, write financial reports, and identify business expansion opportunities.
2. Job Tasks of a Financial Manager:
- Financial managers perform various tasks, including data analysis, providing financial advice to management teams, acquisition and investment of funds, profit planning, and risk management.
3. Key Hard Skills for Financial Managers:
- Financial Data Analysis: Quantitative abilities for studying the market and identifying risks.
- Accounting: Strong accounting skills to understand financial data and reports.
- IT Skills: Technical proficiency for using financial software and data technologies.
- Reporting: Creating reports to ensure compliance with tax guidelines.
4. Key Soft Skills for Financial Managers:
- Communication: Effectively communicating with members of the organization and presenting financial data and reports.
- Critical Thinking: Being well-informed, observant, and capable of making sound judgments.
- Time Management: Excelling in time management while working in high-pressure scenarios.
- Collaboration: Working with various departments within organizations, requiring strong team management skills.
5. Types of Jobs in Financial Management:
- Banking: Roles such as branch manager, financial analyst, credit manager, and revenue manager.
- Insurance: Positions like risk manager, underwriter, actuary, and corporate finance officer.
- Tax and Payroll: Job titles including tax manager, finance officer, auditor, and payroll officer.
- Wealth Management: Positions like wealth manager, certified financial planner, personal finance planner, and investment advisor.
6. How to Become a Financial Manager:
- Aspiring financial managers can start with a bachelor's degree in finance, business, or related fields.
- Advanced education, such as a master's degree or professional certificates, can enhance career prospects.
- Entry-level positions and gaining experience pave the way to higher roles.
- Professional certifications like certified financial planner can stand out to employers.
7. Financial Manager Salary and Career Outlook:
- The U.S. Bureau of Labor Statistics (BLS) projects a 17% growth in finance manager employment from 2020-2030, higher than the national average.
- Salary averages around $74,703, with variations across states.
8. Career Spotlight: Scott Stanley, CFP:
- Scott Stanley, a certified financial planner, shares insights into his career journey, education, and the rewarding aspects of being a financial manager.
- He emphasizes the importance of risk-taking and empathy in the financial management profession.
9. Questions About the Career of a Financial Manager:
- What does a financial manager do? They handle investments, create financial reports, offer advice, and contribute to the overall financial health of organizations.
- What kinds of jobs can a manager of finance have? Roles include financial accountant, chief financial officer, risk manager, chartered accountant, and payroll manager.
- What environments do financial managers work in? They work directly with senior management teams, including directors, executives, attorneys, and auditors.
In summary, financial managers play a pivotal role in organizations, and their responsibilities span various tasks, industries, and skills. The profession offers growth opportunities, and individuals can pursue diverse career paths within the field of financial management.
