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Career Options in Finance A Closer Look

 
By : Ravi Agarwal on 22 May 2012 E-mail Comments     Print Print  Report Abuse
 



Let me list down the popular career options for an MBA/PGDM Finance student. I am giving here a pretty exhaustive list not necessarily in any order. It might be possible that some options are missed out from it:

 

1. Handling finance function in a company.

2. Doing accounting job in a company.

3. Handling a desk at a broker's office.

4. Handling some operations in a bank.

5. Handling some operations in an insurance firm.

6. Financial advisory in a consulting firm.

7. Investment banking with a merchant banker.

 

The Undesirable Ones

 

You may note that the first two options are very rare for an MBA. You will also notice that the last two options are equally rare for an MBA from an average institute. Now I try to list down a few career options wherein an MBA grad is forced to join:

 

a. Selling / marketing a product. (other than financial product)

b. Selling / marketing a financial product. (other than insurance product)

c. Selling / marketing an insurance product.

 

You will appreciate the fact that most of the finance students land up in any of the above three options. What are the reasons behind such a rude behaviour by the market? Who is accountable for such an impartiality with finance grad? What can be done to secure a desired career? Let us ponder over these issues one by one.

 

Why Does the Market Behave so Rudely

 

Some experts would say brand name, a few would say quality of inputs, and others would like to say something else. No one is correct!

 

If you have any stake in India's business education, either as  student or as faculty or as owner, or as a parent, you will agree that the quality of inputs are more or less same across all average kind of B-schools. So the curriculum, number of courses, quality of faculty, and quality of infrastructure.

 

The real culprit is the rosy picture that we usually like to paint to our students. As a matter of fact, our markets don't have enough opportunities for a finance grad, specially  in serial number 6 and 7  above. Our MBA curriculum is not so structured so as to offer a career in serial number 1 and 2. So the most popular options remain between serial number 3 and 5.

 

If a finance student is poor at grades, then he or she has the options between a and c above. This is also true if the institute has failed in roping in enough companies for campus placement. Unfortunately, this is also true if the student has miserably failed in required skill-building, such as Excel. Institutes' failure to rope in enough companies is not always because of a lousy placement cell. It is because the market doesn't have enough opportunities to accommodate everyone. So the market has to act with partiality, favouring those who have better skills.

 

Who is Accountable

 

Poor quality inputs, lethargy from students and faculty, institute's dim efforts in roping in enough companies, and mismatch between the curriculum and industry expectations are only some of the factors that are responsible for a poor show. Localized thinking by the institute's management also worsens  the situation. Interestingly, all the parties would be interested in passing the bucks. None of us has the courage to shoulder the blame.

 

What is the Remedy

 

The situation is not completely out of control. Inspite of the fact that the market doesn't have enough seats, there exists some space for all. Unfortunately, I doubt if a fool-proof plan exists as a cure to all these problems. Based on the feedback from industry and academia, I would like to propose the following:

 

i. Faculty and students must attempt to bridge the gap between course curriculum and industry expectation. The possible ways are constant industry interaction, live projects with companies, and industry driven curriculum. For example, a course on energy management must be prepared in consultation with the energy sector executives only.

 

ii. Industry mentoring can be a way forward wherein a set of students are mentored by an industry expert. For instance, HDFC Bank has started a program where they send their executives to teach to select students. Such a practice has gained a lot of momentum and a host of other banks / companies have also started doing it.

 

iii. Placement must be student-driven activity. Students must realize that a combined effort could make hell of a difference. Institutes must not think twice in deploying resources to achieve this goal. To everybody's satisfaction, institutes have started taking a lead in this direction now a days.

 

iv. Finance is a field that requires a host of skill sets in a student. Faculty and institute should leave no stone unturned in providing necessary skill sets to their students. Such skill sets include spreadsheet skills, data analysis and quantitative modeling, structured finance, financial news analysis, financial forecasting and some of the areas in banking domain.

 

v. Students must do a meaningful summer intership in finance area only. They should not settle at too beaten, run of the mill, and substandard topics that are usually offered by the company and guides alike. A worthwhile project report is heavier than good marks in 10 courses!

 

The Good, the Bad and the Ugly

 

The most sought after profile in finance is investment banking in a consulting firm. Incidentally the seat is usually reserved for grads from IIMs only. One of the most lucrative careers is in the field of M&A and risk management. Again the positions are filled by grads from IIMs. Then comes the profile of analysts. This is much desired by grads from good B-schools (other than IIMs). Sales profile comes in the last but it is in majority.

 

These views are based on a comprehensive research carried out by me and my team. There is a lot that still remains untouched in above article. I would like to invite all stakeholders to provide their valuable comments.

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16 Comments



Aditi Gupta

Aditi Gupta

Wrote on 14 June 2012

Dear Prof. Ravi, What a great article! You have provided a true insight into the glittering world of Finance. Many a times students choose Finance as a career option, without understanding the required skills and what the option of Finance will fetch them in future. Would it be an I-Banker profile or a simply in the end it would result in D-Mat Account sale. I am sure this article will act as an eye opener to the students, parents and others who want to enter the amazing yet rewarding world of Finance!



Gaurav

Gaurav

Wrote on 14 June 2012

Dear Sir, It’s a wonderful article written by you for the students as they always have the dilemma for their career option in finance. It is the fact that good options are less for good financial positions as mentioned by you in our country and there is big competition from Good B School too. If a student is from an average B School MBA in finance will not serve the purpose until the student is enough intelligent and smart along with this there is a huge competition from ICWA, CFA, CA etc. Some good students from average B School does not get the opportunity because good companies do not entertain the institute and their products. So situation is really hard and can be improved as suggested by you and team. And of course it is two side efforts i.e. institute and students. Students must also create zeal towards learning to beat the competition and additional certification will do better for the same.



Ravi Agarwal

Ravi Agarwal

Wrote on 12 June 2012

Dear Dibendu, if you wish to make your finance career in manufacturing sector, then following finance courses will help you a lot: 1. working capital management 2. project financing & management 3. corporate valuation 4. financial modeling 5. strategic corporate finance Other courses such as capital markets, derivatives, investment banking, etc. will be of limited help.





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