0: what's up everyone kenji here and in this video i thought i'd share five career paths in finance

5: now i realized that quite a lot of people don't really seem to understand the differences between

9: investment banking and trading or equity research and other sort of finance related

13: roles so in this video i'm gonna try my best to explain those and hopefully you can decide what's

18: most suited to you so the five that i've picked are financial planning and analysis

22: trading investment banking equity research and financial audit and i'll mainly be focusing on

28: these roles for entry level as well as maybe one two years down the line too so i'll be discussing

33: the work life balance the pay as well as the skills required and with that i'm also gonna

37: provide examples of companies in each career path and obviously this is just five positions right

42: this is by no means a complete list but if this video does well i will consider making a part two

47: covering some other things like what might be private banking commercial banking as well as

52: quants and other things like that i've also made a similar video on business career paths if you want

57: to check that out i'll leave it in the description but for now let's jump into this one so the first

61: one is fp a which stands for financial planning and analysis and this basically has to do with

67: forecasting and budgeting a company's finances so things like what will our revenue

72: look like in three years time what about our net income or how much money should we allocate to

76: the marketing team how much should we pay our employees other things like that will typically

81: be solved by the fbi team and i do want to clarify that fp a isn't necessarily for finance companies

88: so apple say or exomobile or any other large company really also has a finance team right

93: and within it it's probably going to have an fpna team as well and generally how it works is that

98: the senior executives will come up with a macro level plan like what might be hey reach 10 billion

103: in revenue by in five years time or something like that and then the fpa team is going to be in

108: charge of actually implementing certain policies so that that can actually be achieved and for this

112: kind of a role you can either get hired fresh out of college like some of my friends have or you can

117: spend a couple years working say at a big four or something like that and then make the switch

122: for the skills required it's mainly got to do with excel work so spreadsheets

126: secondly finance and accounting obviously as well as some strategy too so you know where the company

132: might be heading towards ray as for the work hours i'd say from 50 to 60 is more or less the

137: average so it's nothing say exaggerated it is a good amount of work though there's obviously

142: some peak seasons right so typically when the year ends that's when the account closes and obviously

147: you need to work slightly more during that period right as for the pay it obviously varies depending

152: on location right the thing with fpa is that it's such a broad thing that it can either be you can

157: be working in fpa at the local hotel or you can be working in fpna at apple right which is obviously

162: going to pay you a lot more but i'd say a typical range in a say a big u.s city could be something

167: like 60 to 90 000 us dollars the second one has to do with that of a trader which basically entails

173: buying and selling securities so these might be things like stocks and bonds or more complex

178: things like what might be options futures swaps or other derivatives like that now typically for

184: the dynamics of this it's either you trade your your money or your company's money or you can also

189: trade on behalf of clients now the job is known to be quite stressful and that's mainly because

194: you're dealing with money right and that money goes up just like it goes down sometimes

198: which can be very unpredictable and stressful for some people also you're constantly measured

203: on your performance right it's very obvious to tell if you're winning or losing money because

206: all you have to do is look at your account as for the hours it's usually around 60 hours a week

212: basically the most intense hours are when the markets open in the u.s i believe that's around

217: from nine to four thirty and before that and after that you're basically gonna be planning doing some

222: research and getting ready for the market open time right some of the big skills required for

226: this kind of a role is being good with numbers being really a fast thinker fast decision maker

231: in that sense because you can win and lose money in just a couple seconds and then thirdly has to

236: do with being relatively unemotional right it's obviously going to help your decision making too

241: also you usually need a license to become a trader and in the us at least that's typically through

245: the series 7 exam now most of the cases the company that you're employed at will usually pay

250: for the course work as well as well as the test as for the salary it really varies hugely here that's

256: primarily because some people make tons of money and through bonuses and other things like that

261: they might be able to really increase that whilst others just don't make that much maybe they're

264: not as good at trading right but i'd say a good estimate for the big financial cities is around

269: 70 to 100 000 and some of the companies with entry-level trader roles include the investment

275: monks oil and gas companies as well as the big asset managers like blackrock or vanguard as well

282: and i'll leave this article linked as well where a trader basically goes through his day in the

286: life if you're interested now the next path is investment banking and this is definitely

290: one of the most popular ones out there so let me briefly explain what they do and at its core it's

295: really two main things number one has to do with financing which is basically raising money for

300: companies so for instance that might be through stocks like airbnb's recent ipo or through bonds

306: like apple recently selling 14 billion worth of bonds where the investment bank helps out in the

311: process right then on the other hand you have what is called advisory which basically has to do with

316: advising companies on financially related matters right a common example here has to do with mergers

322: and acquisitions and an example of that happening in real life has to do with say amazon buying

327: mgm recently for around 8.5 billion the job is highly deal oriented which basically means that

334: you have to work very long hours in order to meet the deadlines of those deals right and sometimes

338: they can also be quite unpredictable so i'd say an average week could be around the 80 hour mark

344: which is definitely a lot more than your average brain that said you do get compensated quite a

349: lot typically in a big u.s city like say new york you'd probably start with a base salary of around

354: 85 000 and then the bonus depending on performance it is quite high it can reach something like

360: 50 000 or so in performance as well as for the skills required for the job it mainly

365: has to do with financial accounting and corporate finance and then on the computer side of things

370: excel and powerpoint and then later on as you move up the ranks as you become a bit more senior

375: the ability to sell being a good salesman being a good presenter obviously starts taking more of an

380: importance as well and i'll leave this resource linked in the description as well which basically

384: goes over the day in the life of an analyst i did make a day in the life video myself as i was

389: working at goldman sachs in their investment banking division as an intern if you want to

393: check that out i'll leave a link as well the next role is equity research and this one basically

398: has to do with producing reports as well as recommendations on investment opportunities

403: for clients now i do realize that this does get a bit confusing in that within investment banks

409: there are equity research teams and there are also traders within an investment too and the reality

414: is that investment banks are so big nowadays that they actually have a lot of different

418: divisions some of which do overlap with some of the roles that i'm talking about here today

422: so i can understand why some people might get a bit confused on that so apologies for that in

427: advance but at its core equity research is about whether you should buy hold or sell a particular

433: investment now these investments could be stocks which is the case most of the time or it can also

438: be bonds funds or other instruments like that and here's an example of what that report might look

443: like this one's from morgan stanley's research team as they analyze apple and give an estimate

448: of a price target right and as you can take a look here it is quite extensive it is quite

453: detailed i mean it's quite a long document i'll leave it in the description just in case you're

457: interested too so you can take a closer look i did find this one online for free on the internet so

462: you can definitely find a lot more too as for the work hours unlike investment banking equity

467: research isn't so deal oriented so typically you do have quite a bit of a structure in that say

472: you're giving a set number of companies that you should be researching and based on that you're

476: obviously gonna know when each one's coming up with new financial statements and other things

481: like that right so there's no surprises in the same way right so i'd say around 60 to 70 hours

486: a week it's quite normal it is still more than your average work but they do get paid fairly

491: well i'd say around 85 000 as the base salary just like investment banking but the bonus is

496: typically slightly less even though it can still reach 100 000 plus as for the skills required it

502: is quite technical so you do need a good knowledge of statistics economics finance and accounting and

507: other things like that it is also important to know how to write as you can obviously see by the

512: by the reports that i showed you earlier and in addition to that people are typically somewhat

517: knowledgeable with some programming languages like what might be sql or vba too also the cfa

522: which is short for chartered financial analyst is a common designation for equity research as well

528: and i'll leave this article going over a day in the life in equity research as well if you're

532: interested so this brings us to our final path which is financial audit that's basically got to

537: do with verifying the accuracy of the financial statements of a company so it's really about

542: investigating whether there's potentially any errors or even fraud somewhere in there this can

547: either be in the form of an internal auditor or an external auditor internal auditor basically means

552: that you're employed by the company that you owed it so for example i could be employed by coca-cola

557: not be auditing coca-cola's financial statements internally right and then on the other hand you

562: have external auditors which are typically the big four you've probably already heard of them

567: and you go around auditing different companies out there so typically you might spend say two to

572: three weeks in a particular company auditing their accounts and then move on to the next company and

577: so on and so forth it's actually what i did myself for a summer at pwc for instance also while at the

583: job auditors do work towards a designation known as the cpa which stands for the certified public

589: accountant in the us at least and usually as for the work hours it's typically around 60 hours a

594: week something along those lines it does peak it does go slightly higher in the winter months which

599: is basically when the companies are closing all of their accounts so it does get slightly busier

604: obviously as for the pay i'd say it's around 60 to 70 000 us dollars a year in the big financial

610: cities and then lastly looking at the skill set this mainly has to do with obviously finance and

616: accounting and then some excel work even though that's not that heavy on the end as well as some

621: more presentation and other skills like that especially as you move further down the road

625: so those are five i do realize that there's a ton of other finance roles out there which i'd

629: like to cover at some point maybe in a part 2 if this video does well so make sure you hit that

634: like and subscribe button do comment down below if there's any particular position that you'd like me

639: to cover though that's all for this video i hope you enjoyed it and i'll catch you in the next one