About 3 out of 10 work in finance and insurance industries.
A bachelor’s degree in finance, accounting, or a related field is
the minimum academic preparation, but many employers increasingly seek
graduates with a master’s degree in business administration, economics, finance, or risk management.
Experience may be more important than formal education for some
financial manager positionsmost notably, branch managers in banks.
Almost every firm, government agency, and other type of organization has one or more
financial managers who oversee the preparation of financial reports, direct investment
activities, and implement cash management strategies. Because computers are increasingly
used to record and organize data, many financial managers are spending more time developing
strategies and implementing the long-term goals of their organization.
The duties of financial managers vary with their specific titles, which include
controller, treasurer or finance officer, credit manager, cash manager, and risk
and insurance manager. Controllers direct the preparation of financial reports
that summarize and forecast the organization’s financial position, such as income statements,
balance sheets, and analyses of future earnings or expenses. Controllers also are in charge
of preparing special reports required by regulatory authorities. Often, controllers
oversee the accounting, audit, and budget departments. Treasurers
and finance officers direct the organization’s financial goals, objectives, and
budgets. They oversee the investment of funds, manage associated risks, supervise
cash management activities, execute capital-raising strategies to support a firm’s
expansion, and deal with mergers and acquisitions. Credit managers oversee
the firm’s issuance of credit, establishing credit-rating criteria, determining
credit ceilings, and monitoring the collections of past-due accounts. Managers
specializing in international finance develop financial and accounting systems
for the banking transactions of multinational organizations.
Cash managers monitor and control the flow of cash receipts and
disbursements to meet the business and investment needs of the firm. For example,
cash flow projections are needed to determine whether loans must be obtained to meet
cash requirements or whether surplus cash should be invested in interest-bearing
instruments. Risk and insurance managers oversee programs to minimize
risks and losses that might arise from financial transactions and business operations
undertaken by the institution. They also manage the organization’s insurance budget.
Financial institutions, such as commercial banks, savings and loan associations,
credit unions, and mortgage and finance companies, employ additional financial managers
who oversee various functions, such as lending, trusts, mortgages, and investments, or
programs, including sales, operations, or electronic financial services. These managers
may be required to solicit business, authorize loans, and direct the investment of funds,
always adhering to Federal and State laws and regulations. (Chief financial officers
and other executives are included with
top executives elsewhere in the Handbook.)
Branch managers of financial institutions administer and manage all of the
functions of a branch office, which may include hiring personnel, approving loans
and lines of credit, establishing a rapport with the community to attract business,
and assisting customers with account problems. The trend is for branch mangers to
become more oriented toward sales and marketing. It is important that they have
substantial knowledge about all types of products that the bank sells. Financial
managers who work for financial institutions must keep abreast of the rapidly
growing array of financial services and products.
In addition to carrying out the preceding general duties, all
financial managers perform tasks unique to their organization or industry.
For example, government financial managers must be experts on the government
appropriations and budgeting processes, whereas health care financial managers
must be knowledgeable about issues surrounding health care financing.
Moreover, financial managers must be aware of special tax laws and regulations
that affect their industry.
Financial managers play an increasingly important role in mergers and
consolidations and in global expansion and related financing. These areas
require extensive, specialized knowledge on the part of the financial manager
to reduce risks and maximize profit. Financial managers increasingly are
hired on a temporary basis to advise senior managers on these and other
matters. In fact, some small firms contract out all their accounting and
financial functions to companies that provide such services.
The role of the financial manager, particularly in business, is changing in
response to technological advances that have significantly reduced the amount of
time it takes to produce financial reports. Financial managers now perform more
data analysis and use it to offer senior managers ideas on how to maximize profits.
They often work on teams, acting as business advisors to top management. Financial
managers need to keep abreast of the latest computer technology in order to increase
the efficiency of their firm’s financial operations.
Working in comfortable offices, often close to top managers and to departments
that develop the financial data those managers need, financial managers typically
have direct access to state-of-the-art computer systems and information services.
They commonly work long hours, often up to 50 or 60 per week. Financial managers
generally are required to attend meetings of financial and economic associations
and may travel to visit subsidiary firms or to meet customers.
A bachelor’s degree in finance, accounting, economics, or business administration
is the minimum academic preparation for financial managers. However, many employers
now seek graduates with a master’s degree, preferably in business administration,
economics, finance, or risk management. These academic programs develop analytical
skills and provide knowledge of the latest financial analysis methods and technology.
Experience may be more important than formal education for some financial
manager positionsmost notably, branch managers in banks. Banks typically fill
branch manager positions by promoting experienced loan officers and other professionals
who excel at their jobs. Other financial managers may enter the profession through
formal management training programs offered by the company. The American Institute
of Banking, which is affiliated with the American Bankers Association, sponsors educational
and training programs for bank officers through a wide range of banking schools and
Continuing education is vital to financial managers, who must cope with
the growing complexity of global trade, changes in Federal and State laws
and regulations, and the proliferation of new and complex financial instruments.
Firms often provide opportunities for workers to broaden their knowledge and skills
by encouraging them to take graduate courses at colleges and universities or attend
conferences related to their specialty. Financial management, banking, and credit
union associations, often in cooperation with colleges and universities, sponsor
numerous national and local training programs. Persons enrolled prepare extensively
at home and then attend sessions on subjects such as accounting management,
budget management, corporate cash management, financial analysis, international
banking, and information systems. Many firms pay all or part of the costs for
employees who successfully complete courses. Although experience, ability, and
leadership are emphasized for promotion, advancement may be accelerated by this
type of special study.
In some cases, financial managers also may broaden their skills and exhibit
their competency by attaining professional certification. Many different
associations offer professional certification programs. For example, the
CFA Institute confers the Chartered Financial Analyst designation on
investment professionals who have a bachelor’s degree, pass three sequential
examinations, and meet work experience requirements. The Association for
Financial Professionals (AFP) confers the Certified Cash Manager credential
to those who pass a computer-based exam and have a minimum of 2 years of relevant
experience. The Institute of Management Accountants offers a Certified in Financial
Management designation to members with a bachelor’s degree, with at least 2 years of
work experience, and who pass the institute’s four-part examination and fulfill
continuing education requirements. Also, financial managers who specialize in
accounting may earn the Certified Public Accountant (CPA) or Certified Management Accountant (CMA) designation. (See
accountants and auditors elsewhere in the Handbook.)
Candidates for financial management positions need a broad range of skills.
Interpersonal skills are important because these jobs involve managing people and
working as part of a team to solve problems. Financial managers must have excellent
communication skills to explain complex financial data. Because financial managers
work extensively with various departments in their firm, a broad overview of the
business is essential.
Financial managers should be creative thinkers and problem-solvers,
applying their analytical skills to business. They must be comfortable with
the latest computer technology. Financial operations are increasingly being
affected by the global economy, so financial managers must have knowledge of
international finance. Proficiency in a foreign language also may be important.
Because financial management is critical to efficient business operations,
well-trained, experienced financial managers who display a strong grasp of the
operations of various departments within their organization are prime candidates
for promotion to top management positions. Some financial managers transfer to
closely related positions in other industries. Those with extensive experience
and access to sufficient capital may start their own consulting firms.
Financial managers held about 528,000 jobs in 2004. Although they can be
found in every industry, approximately 3 out of 10 are employed by finance
and insurance establishments, such as banks, savings institutions, finance
companies, credit unions, insurance carriers, and securities dealers.
About 1 in 10 works for Federal, State, or local government.
Employment of financial managers is expected to grow about as
fast as average for all occupations through 2014. The increasing need for financial
expertise as a result of regulatory reforms and the expansion of the economy will drive
job growth over the next decade. As the economy expands, both the growth of established
companies and the creation of new businesses will spur demand for financial managers.
However, mergers, acquisitions, and corporate downsizing are likely to restrict the
employment growth to some extent.
As in other managerial occupations, jobseekers are likely to face competition,
because the number of job openings is expected to be less than the number of applicants.
Candidates with expertise in accounting and financeparticularly those with a
master’s degreeshould enjoy the best job prospects. Strong computer skills and
knowledge of international finance are important; so are excellent communication skills,
because financial management jobs involve working on strategic planning teams.
In addition, a good knowledge of compliance procedures is essential because of the
many regulatory changes instituted in recent years.
Over the short term, employment growth in this occupation may slow or even
reverse due to economic downturns, during which companies are more likely to
close departments or even go out of businessdecreasing the need for financial managers.
The banking industry will continue to consolidate, although at a slower rate than in
previous years. In spite of this trend, employment of bank branch managers is expected
to increase, because banks are refocusing on the importance of their existing branches
and are creating new branches to service a growing population. As banks expand the
range of products and services they offer to include insurance and investment
products, branch managers with knowledge in these areas will be needed. As a
result, candidates who are licensed to sell insurance or securities will have
the most favorable prospects. (See the Handbook statements on
insurance sales agents; and
securities, commodities, and financial services sales agents.)
The long-run prospects for financial managers in the securities and commodities
industry should be favorable, because more people will be needed to handle increasingly
complex financial transactions and manage a growing amount of investments. Financial
managers also will be needed to handle mergers and acquisitions, raise capital, and
assess global financial transactions. Risk managers, who assess risks for insurance
and investment purposes, also will be in demand.
Some companies may hire financial managers on a temporary basis, to see the
organization through a short-term crisis or to offer suggestions for boosting profits.
Other companies may contract out all accounting and financial operations. Even in these
cases, however, financial managers may be needed to oversee the contracts.
Computer technology has reduced the amount of time and the staff required to
produce financial reports. As a result, forecasting earnings, profits, and costs
and generating ideas and creative ways to increase profitability will become a
major role of corporate financial managers over the next decade. Financial
managers who are familiar with computer software that can assist them in this role will be needed.
Median annual earnings of financial managers were $81,880 in May 2004.
The middle 50 percent earned between $59,490 and $112,320.
Median annual earnings in the industries employing the largest numbers of financial managers in 2004 were as follows:
Securities and commodity contracts intermediation and brokerage
Management of companies and enterprises
Nondepository credit intermediation
Depository credit intermediation
According to a 2005 survey by Robert Half International, a staffing services
firm specializing in accounting and finance professionals, directors of finance
earned between $78,500 and $178,250, and corporate controllers earned between $61,250 and $147,250.
A 2004 survey of manufacturing firms conducted by Abbot, Langer, and Associates, Inc., a
human resources management consulting firm, reported the following median annual incomes:
chief corporate financial officers, $130,000; corporate controllers, $86,150; cost
accounting managers, $67,161; and general accounting managers, $64,100.
Large organizations often pay more than small ones, and salary levels also can
depend on the type of industry and location. Many financial managers in both
public and private industry receive additional compensation in the form of bonuses,
which, like salaries, vary substantially by size of firm. Deferred compensation
in the form of stock options is becoming more common, especially for senior-level executives.
Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2006-07 Edition,
Financial Managers , on the Internet at
(visited December 16, 2006).