Carrer alternatives analysis report - Case Study Example

? Career alternatives – analysis report Letter of transmittal 3 Dec The client Dear Sir Analyzing two career choices This is the reportyou requested on Dec 1st 2011 on career consultation and advice. The report here provides you with an in-depth assessment of the two career alternatives that we discussed during our meeting earlier. In the report you will find detailed information related to two distinct careers in finance – Finance Controller and Actuaries, two of the leading professions in the finance sector. The analysis provides a brief on the career choices and the distinctive aspects that define the career paths. Any profession is guided by the context of knowledge and its application in the defined environmental conditions. The twentieth century marked an increase in the complexity of the profession owing to the rapidly changing operating environment and advancing technology that led to a surge of new products and services across all industries and commerce. The impact of globalisation and technology revolution has created new challenges for the practitioners in this area. Any profession is guided by the context of knowledge and its application in the defined environmental conditions. The marketplace is undergoing increased transformations marked by growing number of mergers and acquisitions, consolidations and outsourcing activity redefining business strategies and practices, changes in management practices to accommodate knowledge management principles and growing number of professional credentials providing stiff competition to the practitioners. The report will help you compare the two career alternatives in the finance sector and choose one which is more suited to your skills and temperament. I thank you for giving me the opportunity to guide you in this decision making process. Please do not hesitate to give me a call in case you have further queries or any issues. Yours sincerely Career Consultant Contents Contents 4 Executive Summary 6 Introduction 6 Purpose scope and limitations 7 Sources and methods 7 Report Organization 7 Career choices in finance 8 Finance Controllers 8 Job responsibilities of a financial controller 9 Working conditions 9 Educational qualification 10 Licenses and other qualifications 10 Job prospects 11 Salary 12 Actuarial profession 13 Job responsibilities of an Actuary 13 Working Conditions 14 Educational qualification 14 Licenses and other qualifications 15 Job prospects 15 Salary 16 Recommendations and Conclusion 16 References 18 Executive Summary The role and scope of a finance professional in the present economic conditions includes pricing of new products, price classification, forecasting challenges and issues in the operating environment, planning strategic moves, estimating the size and extent of loss distribution, establishing loss reserves, monitoring solvency, calculating premium levels, and assessing the credibility of projects and transactions. The existing business environment has presented the organizations with numerous complexities that act as constraints in implementing new policies and strategies while at the same time presenting increased opportunities to expand and grow. The exposure to risk has increased manifolds that require efficient models for rating and assessing the feasibility of operations (beanactuary.com, 2009). The report provides an in-depth assessment of two career alternatives – Finance Controller and Actuaries. Introduction A career in finance and accounting is gaining popularity. In any company or an organization the study of the numbers or finance is the most crucial and important decision. This is used to gauge what and where the company is heading to. This guides the management to take further actions pertaining to the interest of the company. The study of the market, investment plans, investment brokers etc are some of the arrear which a person can opt for in the field of finance. The increasing range of products and services offered by financial services today and the growing complexity of the operating environment makes it imperative to be well informed of the financial information and techniques. Choosing a career option can be a challenging task and the report is prepared keeping in mind the client’s need to evaluate possible career options in finance and recommend the right choice of career to the client. Purpose scope and limitations The purpose of the report is to provide an in-depth assessment of two alternative career choices and identify the key aspects and requirements of each career. The report outlines the key aspects of two career choices – Finance Controller and Actuary, identifies the educational requirements, earning potentials and job responsibilities. The purpose of the report is to recommend one of these two alternatives as career choice. Based on the findings the report recommends the Actuarial profession to the client. Sources and methods The information and facts gathered for this report were based on the preliminary interview with the client where he detailed his career preference in the field of finance. The interview also provided the consultant with the client’s educational background and work experience so far. The report has been compiled using various online sources that provide relevant and accurate details related to the two identified career choices. While the information provided in the report is based on these sources, the recommendations provided are based on the assessment and opinion of the consultant. The client must consider his preferences before making the final decision. Report Organization The report is organized into distinct sections that begin with an introduction to career choices in finance followed by the details of Finance Controller and Actuary career. Each of these two career options are explained in terms of job responsibilities, working conditions, training and educational requirements, licenses and other qualifications, job prospects and salary. This is followed by recommendations and conclusion. Career choices in finance There are various field of work available in the finance department. Financial controller is an area which is gaining popularity and students are aspiring to take up this role. The job profile includes accounting, cost analysis; financial planning, and cost analysis among others. Chartered Accountants or Cost Accountants who have experience in the required field are also appreciated. A basic required qualification is the bachelor’s degree in any of the finance courses like accounting, economics or business administration. The employees with an analytical skill and training in these fields provide much exposure to the management and better job option. Another nature of work which related to the finance is that of an Actuary. The role and the scope of an Actuary would differ in a way from that of a financial controller. We will analyze the two career options in details. Finance Controllers The Finance Controller’s job encompasses the study and the analysis of the market structure, the company’s growth, assets, and the relative study of these with respect to the organization they are working with. There is an increased competition among the ones who wants to pursue this career. Many Financial managers need a bachelor’s degree or many have master’s degree and or professional certification. Most of the Finance Controllers work in an insurance industry or in the finance department. In some cases experience excels the qualification and depending upon the job profile for a Financial controller (BLS, 2011). Job responsibilities of a financial controller The role of controller is to prepare the financial reports pertaining to the expenses incurred by the company or the expenses which are likely to be made by the organization, the income statements, the balance sheet of the company and to analysis and study the company’s financial condition and position. Their work is somewhat different form the Actuaries who would predict the cost owing to the expenses in the company. The Financial Controllers are in charge of preparing the reports required by the authorities who will give a green signal to the company’s financial terms and conditions. They are not involved in making audit reports, or in asset calculation in an organization (Tandon, 2010). Apart from the educational qualification and the experience which they needs, they should have a wonderful and effluent communication skill, a strong interpersonal quality. They should have a wonderful verbal and written communication .They act a bridge between the management and the other regulatory authorities. All the work has to be done in tandem with the protocol laid down by the company’s management within the purview of high confidentiality and the sensitivity (BLS, 2011). Working conditions The financial controllers can work in a comfortable position, as they have to give a regular feedback to the management, they are often close to the decision making authorities of the company. They would all the access to the information services. Their work includes working on much dataset and so they are expected to stretch beyond their working hours. At times they are expected to work more than 50 -60 hours per week. Apart from the meetings and looking forward to the economic structure of the company, they are working with; they have to keep a track of the changes in the rule pertaining to the financial laws of the country (BLS, 2011). Educational qualification Financial Controllers need bachelors or a master’s degree. For some the prime requisite may be the years of experience in the fields of sales, or in the loan department. For example for the bank managers the number of years of his/her exposure in the field of sales or loan is considered. Other criteria are the training opted by the person or the one imparted by the company. Other requirement is extremely sound business skill and mathematical knowledge. For the role of the Finance Controller, the degree is a must either a master’s degree or at least a bachelor’s degree in the field of finance, accounting, economics or business administration. These courses gives the insight to the analytical skill and the teaching specifically to the financial methods, their jargons, rules and functionality and the differences amongst the various laws and regulation related to the different financial school. Some Financial Controllers get the promotion though the growth in positions which is done internally (within the company). Some also gets certified by the different training programs set up by the company or any reputed institutions (Burton, 2009). Licenses and other qualifications Many Financial controllers work in the finance department, this requires a lot of analytical skill and working with numbers, because of which they have to have a license with the Certified Public Accountants (CPA). There are some behavioral aspects or the skills which are imperative for a Financial Controller, they have to have the ability to think out of the box, very creative in their thoughts and ideas, and they should have the ability to explain a very complex problem in a very easy format to the management and its solution as well. They should have a keen outlook and a critical knowledge and the urge to understand the business from a broader perspective and view. As they are expected to work in a much complex forum, where one decision can change tables, they have to be very accurate and careful in their thoughts, calculation and knowledge (BLS, 2011). Their interpersonal skills are important as the work involves working in teams, should be able to convince others for a possible solution, and they should have the knowledge of international finance and the finance concerning other competitive industries. The international finance is needed as the financial laws are changing everyday because of the changing global market. Last but not the least the working and the rules concerning the regulatory authorities is also essential. Financial Controllers can regularly update themselves by taking the trainings related to their field of work. They can attain the professional certification courses. For example, the Chartered Financial Analyst offer an investment professional course who have at least a year’s degree and the required work experience they have to clear three exams. A continuous education is required to attain this level (BLS, 2011). Job prospects The competitive employment scenario for the Finance Controller is high owing to the growing demand for competent finance personnel by organizations across the globe. However, it is predicted that the number of people qualified in this field will outnumber the quantum of jobs available. Thus only candidates with expertise and master’s degree in accounting and finance have good prospects of getting job offers. The BLS website provides the following statistics on projected employment in this sector by the year 2018 – Occupational title SOC Code Employment 2008 Projected employment 2018 Percent change 2008-2018 Finance Controllers 11-3031 539,300 580,500 8 (Source: bls.gov, 2011) Salary Median annual wages in the industries employing the largest numbers of financial controllers were: Securities and commodity contracts intermediation and brokerage $134,940 Management of companies and enterprises 115,520 Insurance carriers 110,750 Local government 78,650 Depository credit intermediation 77,280 Big organizations offer a better pay packages, this of course depends upon the type of work, industry and location. Many financial controllers also get bonus, stock options for senior-level executives (BLS, 2011). Actuarial profession Actuaries work for insurance companies, consulting firms, government and insurance departments, colleges and universities, banks and investment firms, large corporations, public accounting firms, failure analysis firms, re-insurers, and as individual practitioners (beanactuary.com, 2009). These professionals work in collaboration with other actuaries, underwriters, sales and marketing department personnel, claims department, risk management, solicitors, finance department, accounts department, and other consultants. The role of an Actuary is also related to the finance, but he or she would assess risk and creates policies won which the finance department would work. For example the Pension Actuaries would study the financial impact of the pension plans. Their work is to make policies regarding the investment, the type, amount etc or basically the framework based on which all the finance team would go ahead (IAA, 2009). Job responsibilities of an Actuary They have an immense knowledge in the field of statistics, finance and business. Their main job is to find out the risk involved in any business and create policies so that the risk can be minimized. They calculate the money or cost to the company of an even of death, injury or a loss to the property and so forth. For this reason they are very much needed in the insurance industry. They also calculate and analyze the risk involved in the company’s financial matters, the nature of investments which will bring more profits. They also work in making policies, pension plans and other financial decisions and policies and strategy, so that at time of crisis, the company can withstand it. They work on various models of studies which are related to the area of the property, casualty or health insurance. They ensure that the premiums charged from the policy holders are enough to cover the entire potential claim and other expenses. The premium has to be profitable and should be at par with other companies in the market (BLS, 2011). Working Conditions They are usually confined to desk job. They have to travel often, which raise their hours of work. Usually their offices are comfortable and pleasant (BLS, 2011). Educational qualification They should have a good base in the field of mathematics. Along with the graduation degree students should complete a coursework in economics, applied statistics or corporate finance. This is required for their professional certification. Students also have the option of an internship course prior to the graduation. They should have a degree in economics or mathematics, statistics or finance (SOA, 2009). Actuaries should a sound knowledge in developing and using database and spreadsheet. The Actuaries should have expertise in the field of computer applications like SAS or SQL. Their technical knowledge along with the academic qualification is very useful for their future and the nature of work they are entitled to. Apart from these qualifications, their soft skill should also be very strong and effective. This includes the interpersonal skill and an effective communication is also important, particularly for consulting actuaries (IAA, 2009). Licenses and other qualifications There are two professional programs SOA and CAS. SOA is society of Actuary and CAS is casualty Actuarial Society. These two professional societies give the actuaries a degree to work in the field. The SOA gives the license to work in the field of life insurance, health benefits systems, retirement systems etc. The CAS gives the license to work in the property and casualty field inclusive of the workers compensation and personal injury liability (Lomas, 2009). Job prospects There is an increasing trend of competition among the applicants. College graduates who have passed two of the initial exams should complete an internship as well. It requires a strong foundation in mathematics is required as it includes the computation of complex probability and statistics. They have more of the employment opportunities in the consultancy firms. There is an increasing trend of hiring consultant actuaries for any company. The health care cost will give job opportunities with the medical issues, as there would be many risk associated with it (BLS, 2011). The table below illustrates the projected employment statistics of actuaries – Occupational title SOC Code Employment 2008 Projected employment 2018 Percent change 2008-2018 Actuaries 15-2011 19,700 23,900 21 (Source: bls.gov, 2011) Salary The remuneration of an Actuary varies as according to the number of examinations passed and his or her performance record. The junior level actuaries earn between $55,000 and $70,000 per year, with the seniority the salary goes even more annually (BLS, 2011). Recommendations and Conclusion The role and demand of the financial controllers and the actuaries is a continuous process. The job seekers are likely to face competition in the field of accounting. For the financial controller, the knowledge of finance, a complex financial instrument etc is a mandate and for the Actuarial a strong foundation in mathematics is essential. Both the roles are of utmost importance to a company or an organization. The difference is the nature of work. A financial controller is expected to regulate, guide the financial condition of an organization. An Actuarial helps the companies to develop health and long term insurance policies by their calculations and predictions. A Finance Controller will help the company by calculating and evaluating the numbers obtained and by predicting the performance based on these measurements. An Actuarial helps both the company and the consumer as it keeps a check on the number of the occurrence of a disease and helps the companies by calculating the premium based on which the company itself can survive even in any odd situation. The emerging times that are characterized by tough economic conditions and financial challenges will witness an increasing demand for actuaries. Monetary and fiscal policies are highly instrumental in regulating the country’s economy and creating market stability. The impact of these changes on the Actuarial profession is visible in the increasing demand for individual practitioners and consultants who can provide adequate support to organizations and managers in the decision making process. The demand for Actuaries is high in the current economic environment with increasing sectors seeking professional advice and services of an Actuary to assist them in evaluating present conditions and forecasting future trends and market values. Based on these observations, the report concludes that the client must choose the Actuarial profession that has wide prospects in future. References BLS. (2011). Financial managers. Retrieved on Dec 2 2011 from http://www.bls.gov/oco/ocos010.htm#outlook BLS. (2011). Actuaries. Retrieved on Dec 2 2011 from http://www.bls.gov/oco/ocos041.htm Burton Contractors. (2009). Job description – financial controller. Burton Civil Engineering Contractors. beanactuary.com. (2009). Skills and talents needed for an Actuarial career. Retrieved on Dec 2 2011 from http://www.beanactuary.org/hs/skills.cfm IAA. 2009. International Actuarial Association – What is an Actuary? Retrieved on Dec 2 2011 from http://www.actuaries.org/ABOUT/Brochures/Actuarial_Profession_EN.pdf Lomas, Anne. (2009). Actuarial Consultant – job description and activities. Retrieved on Dec 2 2011 from http://www.prospects.ac.uk/p/types_of_job/actuarial_consultant_job_description.jsp Tandon, P. (2010). New age career options in finance. MET Institute of Management. Read More