Maybe it’s a side effect of skimming the New York Times and the Wall Street Journal every morning, but I’m starting to feel really bad for people who work in finance. Not all of them, of course; the ones who got us all into the mess we’re in deserve the scorn they’re receiving, along with some corporate alchemy (turning golden parachutes into lead). But banking and financial services are huge industries that everybody depends upon, and the worldwide ugliness we’re experiencing has got to be taking a heavy personal and professional toll on the folks who are left holding the bag.
Banks and investment groups are bigger brands today than ever before in history — though I can’t say I’ve done a whole lot of research to back that up — so whenever there’s news of a crisis or misstep, everything related to that brand takes a hit, and so does public confidence in general. The latest victims are in the Persian Gulf; Kuwait is planning a bank bailout, and Saudi Arabia is about to loan some $2.3 billion to low-income borrowers. (Link may require free registration.) Qatar’s stock market lost nearly 9 percent of its value yesterday. If you think they didn’t like the U.S. before, just wait — blame for the worldwide economic ugliness can be laid at our doorstep, and I’m sure some more fists will be shaken in our direction before this is over.
How do bankers and investment brokers deal with all this, and keep their customers from putting their money in the First National Bank of Mattress? you knew I’d work my way back to this … the answer is good CRM practices. The banking industry should be marketing the safest account options for individuals and businesses, and brokers should emphasize the securities that are the most, er, secure. They have to turn a profit, but the way to do this is to restore a feeling of confidence — relative to the rest of the world, if not absolute — that will encourage smart saving and sound investment. Account managers have to be even more consultative than usual, and make sure they’re selling a good solution for what the customer wants. If ever there was a time for long-term thinking, it’s now. Well-served customers are not only more likely to keep their business with you, but to keep their business — period. With financial uncertainty comes greater risk of failure, and any further mishandling at this point can destroy lives and livelihoods.
The need for good CRM is evident in any business when times are tight; financial services companies just have it harder right now because of the huge black eye they’re sporting. As with many shakeups in the past, the key is confidence. Panic leads to disaster, and FDR’s words have never rung more true: “The only thing we have to fear is fear itself.”
Saturday 8 November 2008
Wednesday 5 November 2008
Insurance industry
The Insurance IndustryThe insurance industry deals with indemnifying individuals against loss incurred. For the loss incurred to be indemnified, one needs to have an insurable interest and he/she must have paid their premiums. The insurance industry is divided into various segments including insurance agent, brokers and carriers. Insurance carriers are the principal organizations that undertake to indemnify the insured against losses incurred. Insurance agents and brokers place business with the insurance companies. The agents and brokers are independent entities. There are also other professionals involved in the insurance business, for example the loss adjustors. Insurance carriers develop the policy statements. They define the necessary conditions that are required before one gets insured. After signing the policy document the insured is required to pay premiums. The premiums form a pool which the insurance company invests in other sectors of the economy, such as real estate and bonds. In case the insured loss occurs the carrier might sell off part of the investments in order to indemnify the insured. Two different kinds of carriers exist; primary insurance carriers and the secondary carriers. The primary insurance carriers offer insurance services to individuals. Secondary insurance carriers offer insurance services to the insurance companies. It is a mandatory requirement that insurance companies cede a certain percentage of their business to reinsurance companies. Primary insurance carriers offer insurance products such as life insurance, disability insurance, property insurance as well as liability insurance cover. Homeowners’ policies as well as automotive insurance cover both property and liability. Group insurance is another insurance product offered by carriers. The group insurance product is offered to employers for their employees. Group insurance cover may also be offered to trade unions.
Jobs in Finance and Banking
Jobs in the finance industry are diverse and far reaching. Banking jobs have long been viewed as dull and uninteresting but this could not be further from the truth. With roles in financial planning, investment banking and real estate to name but a few, career paths in the finance industry are plentiful.
Commercial banking jobs are wide ranging, they offer great entry level positions and good career progression. The many large organisations in commercial banking also offer good employment security. Commercial banks provide employ more people than any other sector of the finance industry, they offer good opportunities to understand the world of business and interact with customers.
The world of corporate finance is wholly different as it usually entails working 'in house' using your technical knowledge to plan for a businesses future, the work is driven towards the growth of the business. Fundamentally jobs in this sector of the banking industry create value for their company, they are predominantly performance related so subsequently can be high pressure, although this pressure is elongated and based upon long term goals.
Financial planners carry out similar tasks to those in the corporate sphere; these jobs however are focussed upon helping individuals plan for their future. The work requires outstanding interpersonal skills while it can be ultimately rewarding; both financially and personally. For this role understanding of estate planning issues, investments and taxes is a prerequisite.
The field of insurance also offers a variety of finance jobs; insurance is increasingly becoming a lucrative field as more and more people become dependent upon it. Jobs in this sector include calculating risk and anticipating future problems. Job roles include underwriter, customer and sales representative, as well as asset manager. Today the insurance industry is trying to leave its negative image in the past and promote the idea that their industry is there to help people in times of need.
Investment banking has long been seen as the most lucrative sector in the financial industry. The job includes purchasing assets, trade securities and offering financial assistance. As well as large multinational investment banking firms there are smaller companies that operate on a more regional level. These jobs are important to world finance as the work larger companies undertake is often for governments.
Being a money manager is one of the most rewarding jobs in banking. It fundamentally involves the investment side of the stock market. Dealing in stocks and bonds makes up the majority of the work although freedom to work how you like is a large constituent of these jobs.
Unfortunately starting in money management is difficult, top companies only hire experienced individuals, although experience can be gained with local pension fund companies and insurance companies. Understanding portfolio theory, fixed income investments and gaining official qualifications will assist in getting this type of finance job.
Finally there is the financial field of real estate, jobs in this sector are diverse and vary from construction to mortgage brokering and leasing. With over a third of the world's wealth tied up in real estate this is a financially rewarding sector to enter. The close ties real estate has with society in terms of infrastructure development gives these jobs a sense of social responsibility, while the work offers different challenges on a daily basis. Of all the jobs in banking this is often the most interesting field to enter.
As previously stated, jobs within the banking and financial industries vary greatly; with so many disparate fields there is much to offer prospective financiers. The skills needed in the banking industries are considerably unique to each field. However, if you feel you are shrewd with funds and in most cases great with people, working in the finance industry could be the career path for you.
Commercial banking jobs are wide ranging, they offer great entry level positions and good career progression. The many large organisations in commercial banking also offer good employment security. Commercial banks provide employ more people than any other sector of the finance industry, they offer good opportunities to understand the world of business and interact with customers.
The world of corporate finance is wholly different as it usually entails working 'in house' using your technical knowledge to plan for a businesses future, the work is driven towards the growth of the business. Fundamentally jobs in this sector of the banking industry create value for their company, they are predominantly performance related so subsequently can be high pressure, although this pressure is elongated and based upon long term goals.
Financial planners carry out similar tasks to those in the corporate sphere; these jobs however are focussed upon helping individuals plan for their future. The work requires outstanding interpersonal skills while it can be ultimately rewarding; both financially and personally. For this role understanding of estate planning issues, investments and taxes is a prerequisite.
The field of insurance also offers a variety of finance jobs; insurance is increasingly becoming a lucrative field as more and more people become dependent upon it. Jobs in this sector include calculating risk and anticipating future problems. Job roles include underwriter, customer and sales representative, as well as asset manager. Today the insurance industry is trying to leave its negative image in the past and promote the idea that their industry is there to help people in times of need.
Investment banking has long been seen as the most lucrative sector in the financial industry. The job includes purchasing assets, trade securities and offering financial assistance. As well as large multinational investment banking firms there are smaller companies that operate on a more regional level. These jobs are important to world finance as the work larger companies undertake is often for governments.
Being a money manager is one of the most rewarding jobs in banking. It fundamentally involves the investment side of the stock market. Dealing in stocks and bonds makes up the majority of the work although freedom to work how you like is a large constituent of these jobs.
Unfortunately starting in money management is difficult, top companies only hire experienced individuals, although experience can be gained with local pension fund companies and insurance companies. Understanding portfolio theory, fixed income investments and gaining official qualifications will assist in getting this type of finance job.
Finally there is the financial field of real estate, jobs in this sector are diverse and vary from construction to mortgage brokering and leasing. With over a third of the world's wealth tied up in real estate this is a financially rewarding sector to enter. The close ties real estate has with society in terms of infrastructure development gives these jobs a sense of social responsibility, while the work offers different challenges on a daily basis. Of all the jobs in banking this is often the most interesting field to enter.
As previously stated, jobs within the banking and financial industries vary greatly; with so many disparate fields there is much to offer prospective financiers. The skills needed in the banking industries are considerably unique to each field. However, if you feel you are shrewd with funds and in most cases great with people, working in the finance industry could be the career path for you.
Working in Finance
In the UK financial sector, information technology has become the backbone. Information technology, or IT, has emerged as such an important part to any financial service provider’s success because of the need for information. Banks need to maintain updated information on their client’s accounts in order to keep their business and help them function on a daily basis. Financial advisors need to have the latest information on interest rates, accounts, and other factors which may affect their advice to clients. In the end, IT networks have become the single most powerful determinant of a firm’s success or failure in finance.
A vigourous IT network is not immune to the problems of the outside world. Networks can be hacked into or connected to malicious networks, which may be used to steal information or funds. IT security in the financial sector is crucial for a company that wants to maintain the highest standard of service to their customer. After all, it makes little sense to spend hundreds of thousands of pounds on new equipment only to have it broken into due to poor security. Identity theft and viruses alike can harm a firm’s efficiency and their trust in the community.
IT professionals who have an interest in security issues are benefiting greatly from the concern over identity theft. IT security jobs in the financial sector, not to mention other sectors, have become more important over the last five years. Essentially, IT security professionals assess the needs of their employer and determine the best course of action to ensure long term security. Simple solutions, like keyword protection and virus scans, are not so simple when they are multiplied by hundreds of computers. IT security professionals who take financial sector positions need to realise the issues that arise regularly in their job.
IT security threats are constantly changing, with new viruses emerging daily to replace ones that were eliminated by network security. IT professionals need to be on top of these new threats before they happen, a tricky proposition for even the best worker. However, security workers in the financial sector also need to consider the business aspect of their profession. IT departments in general, and security specifically, does not have an endless amount of funds to fight short and long term problems. While financial service firms are investing more heavily in IT security than ever before, it is still limited when compared to other departments. As such, IT security workers need to balance good solutions with budgetary concerns.
A vigourous IT network is not immune to the problems of the outside world. Networks can be hacked into or connected to malicious networks, which may be used to steal information or funds. IT security in the financial sector is crucial for a company that wants to maintain the highest standard of service to their customer. After all, it makes little sense to spend hundreds of thousands of pounds on new equipment only to have it broken into due to poor security. Identity theft and viruses alike can harm a firm’s efficiency and their trust in the community.
IT professionals who have an interest in security issues are benefiting greatly from the concern over identity theft. IT security jobs in the financial sector, not to mention other sectors, have become more important over the last five years. Essentially, IT security professionals assess the needs of their employer and determine the best course of action to ensure long term security. Simple solutions, like keyword protection and virus scans, are not so simple when they are multiplied by hundreds of computers. IT security professionals who take financial sector positions need to realise the issues that arise regularly in their job.
IT security threats are constantly changing, with new viruses emerging daily to replace ones that were eliminated by network security. IT professionals need to be on top of these new threats before they happen, a tricky proposition for even the best worker. However, security workers in the financial sector also need to consider the business aspect of their profession. IT departments in general, and security specifically, does not have an endless amount of funds to fight short and long term problems. While financial service firms are investing more heavily in IT security than ever before, it is still limited when compared to other departments. As such, IT security workers need to balance good solutions with budgetary concerns.
Working in Finance
Financial Services offers a wealth of opportunities for graduates across a wide variety of different sub sectors from investment banking jobs to stockbroking jobs, investment management to insurance.
The insurance industry is one of the world's oldest financial services industries and in fact the number of insurance jobs is roughly one third the total number of financial services roles at any one time. Roles generally revolve around claims, underwriting, broking, accountancy, risk and compliance. And, as insurance employment is truly global, it's a sector which also offers opportunities to work overseas in places such as continental Europe, Bermuda, the Cayman Islands and the United States.
Investment banks raise funds and provide complex financing structures for commercial client activity as well as offering merger & acquisition advice, treasury dealing and securities trading. Investment banks tend to be huge entities with offices across the globe. Staff numbers often run into the thousands which in turn creates a vibrant job market. It's also possible to work for smaller, so called "boutique" investment banks which specialise more heavily around a particular area. Jobs in investment banking have traditionally been split out into three main areas, back office, middle office and front office. Jobs in the investment banking front office include sales and trading, equity research and corporate finance. Middle office roles include product control, financial control, risk and compliance. If the job is in an investment bank back office, it's likely you'll be working in operations and non-finance related roles such as human resources, marketing or secretarial/office support.
Private wealth managers help clients make informed decisions on where to invest their money by offering advice on tax, pensions, life assurance, asset management and estate planning. Private wealth management jobs therefore include all aspects of client relationship management from bringing in new business to devising the planning strategies behind a client's wealth. Private wealth management jobs can be found either in accountancy or law firms, boutique private wealth management firms, private banking arms of clearing banks, investment banks, stockbrokers and private client fund managers.
Stockbroking jobs are found mainly in investment banks but also within firms of brokers. In either case if you work in a stockbroking role you will advise clients on investment strategies, look at how much risk is involved and buy and sell securities on their clients' behalf. Many stockbroking jobs offer on the job training. However to progress , exams must be taken via the Securities and Investment Institute (SII) in order to become registered with the Financial Services Authority.
Considered the 'maverick' outsiders in the financial services world, most hedge fund companies are owned by successful former traders or fund managers who've decided to go it alone. There are many different types of job available in a hedge fund- these include:
a) Analysis: analysing the companies, markets and financial products a hedge fund invests in. b) Sales and marketing: the relationship managers who liaise with investors, and help sell the merits of the fund. c) Trading: executing the investment strategy, buying and selling financial products according to analysts' recommendations. d) Risk management and back office: settling trades, working out a hedge fund's risk exposure and making sure everything flows smoothly. In many small funds this is outsourced to 'prime brokerage' divisions in investment banks.
Investment managers or fund managers bear certain similarities to hedge funds. Essentially, investment management is the professional management of various securities (shares, bonds etc) assets (e.g. real estate), to meet specified investment goals for the benefit of the investors. Covering a wide range of specialist investment management jobs from portfolio administration, valuation, marketing, performance analysis and fund accounting through to fund manager's assistants, broker sales support and junior fund managers, the investment management sector offers some of the best job opportunities within fund managers, global custody houses and private banking companies across all product areas.
The insurance industry is one of the world's oldest financial services industries and in fact the number of insurance jobs is roughly one third the total number of financial services roles at any one time. Roles generally revolve around claims, underwriting, broking, accountancy, risk and compliance. And, as insurance employment is truly global, it's a sector which also offers opportunities to work overseas in places such as continental Europe, Bermuda, the Cayman Islands and the United States.
Investment banks raise funds and provide complex financing structures for commercial client activity as well as offering merger & acquisition advice, treasury dealing and securities trading. Investment banks tend to be huge entities with offices across the globe. Staff numbers often run into the thousands which in turn creates a vibrant job market. It's also possible to work for smaller, so called "boutique" investment banks which specialise more heavily around a particular area. Jobs in investment banking have traditionally been split out into three main areas, back office, middle office and front office. Jobs in the investment banking front office include sales and trading, equity research and corporate finance. Middle office roles include product control, financial control, risk and compliance. If the job is in an investment bank back office, it's likely you'll be working in operations and non-finance related roles such as human resources, marketing or secretarial/office support.
Private wealth managers help clients make informed decisions on where to invest their money by offering advice on tax, pensions, life assurance, asset management and estate planning. Private wealth management jobs therefore include all aspects of client relationship management from bringing in new business to devising the planning strategies behind a client's wealth. Private wealth management jobs can be found either in accountancy or law firms, boutique private wealth management firms, private banking arms of clearing banks, investment banks, stockbrokers and private client fund managers.
Stockbroking jobs are found mainly in investment banks but also within firms of brokers. In either case if you work in a stockbroking role you will advise clients on investment strategies, look at how much risk is involved and buy and sell securities on their clients' behalf. Many stockbroking jobs offer on the job training. However to progress , exams must be taken via the Securities and Investment Institute (SII) in order to become registered with the Financial Services Authority.
Considered the 'maverick' outsiders in the financial services world, most hedge fund companies are owned by successful former traders or fund managers who've decided to go it alone. There are many different types of job available in a hedge fund- these include:
a) Analysis: analysing the companies, markets and financial products a hedge fund invests in. b) Sales and marketing: the relationship managers who liaise with investors, and help sell the merits of the fund. c) Trading: executing the investment strategy, buying and selling financial products according to analysts' recommendations. d) Risk management and back office: settling trades, working out a hedge fund's risk exposure and making sure everything flows smoothly. In many small funds this is outsourced to 'prime brokerage' divisions in investment banks.
Investment managers or fund managers bear certain similarities to hedge funds. Essentially, investment management is the professional management of various securities (shares, bonds etc) assets (e.g. real estate), to meet specified investment goals for the benefit of the investors. Covering a wide range of specialist investment management jobs from portfolio administration, valuation, marketing, performance analysis and fund accounting through to fund manager's assistants, broker sales support and junior fund managers, the investment management sector offers some of the best job opportunities within fund managers, global custody houses and private banking companies across all product areas.
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