Highest Paying Jobs in the Financial Industry

The financial industry is easily one of the most competitive when it comes to finding a job. This is even true in regard to entry-level positions, as it’s almost entirely unheard of to jump into and build a successful career in the industry without starting near the bottom and working your way up. The desks of finance professionals around the world are littered with resumes of students and executive wannabes hoping for a break that they believe will set them on course to be young and rich “masters of Wall Street”. The highest-paying jobs, and therefore the most competitive, in the financial industry – including four chief executive positions and investment professionals at hedge funds – are even harder to land.

We hope you enjoy this guide to the Five Highest Paying Jobs in the Financial Industry.

 

Overview of the Financial Services Industry

The financial sector encompasses a broad variety of firm types that provide financial services to individuals, businesses, and government entities. The financial services industry is a key component of developed economies and has become more important in the past half-century. It made up only 10% of all business profits in 1950, but as of 2010, financial services companies accounted for nearly 50% of total business profits. That’s one major reason that it offers many of the highest paying jobs.

Worldwide, publicly-traded financial firms rank first in both total earnings and total market capitalization. Conglomerates that offer a virtual marketplace of financial services in one location are the largest players in the industry, but there are still plenty of major, successful firms that specialize in providing just one type of financial service, such as personal investment advice.

Retail and Commercial Banking

Retail banking is still the cornerstone of the financial industry. Retail and commercial banks provide deposit accounts, credit and debit cards, personal and business loans, and mortgages. They also facilitate money transfers and offer foreign currency exchange services. The current trend in retail banking is offering increasingly specialized financial services to each customer, tailored to their individual needs. The highest paying jobs in retail banking usually belong to loan officers and major corporate executives, such as the chief financial officer (CFO) and chief risk officer (CRO).

Investment Banking

Investment banks provide major financing for corporations and governments through both equity capital markets and debt capital markets by handling stock and bond issues for their clients, as well as arranging general debt financing. They also manage the purchase and sale of companies through activities such as mergers and acquisitions (M&A), representing clients on both the buy and sell sides. Additionally, they manage investments for their clients. M&A is typically the business that brings in the most money for investment banks. Therefore, the highest paying jobs at investment banks tend to be individuals who can successfully land and manage large M&A deals.

Insurance

Insurance companies are a major component of the financial sector, representing a subsector of financial services that is focused on providing individuals or corporations with tangible ways to manage risk. Insurance firms also assist investment bankers in assessing and underwriting the risks associated with the capital markets financing they provide for their clients. The final wall of risk protection is provided by reinsurers, which are companies that sell insurance to other insurance companies. This type of insurance is designed to offer insurers financial protection against catastrophic losses. The highest paying jobs in the insurance industry remain those of the agents who sell insurance policies.

Financial Advisors and Brokerage Firms

Brokerage firms, which include such well-known names as Charles Schwab and Fidelity Investments, facilitate the buying and selling of securities for their clients, and also offer financial advisory and money management services. Brokerage firms also typically create and offer investments in their own mutual funds or exchange-traded funds (ETFs). Portfolio managers who create and manage such funds occupy the highest paying jobs at brokerage firms.

Hedge Funds

Hedge funds and other private investment partnerships primarily serve the investment needs of high net worth individuals (HNWI) and large institutional investors, offering investment and money management services in return for management fees and a percentage of profits from the investments. Successful hedge fund managers are among the highest-earning individuals in the financial industry.

Private Equity

Private equity and venture capital firms provide major investment capital to start-up businesses or to businesses needing large amounts of financing for a major growth project such as expanding their business internationally. Private equity investors offer funding in exchange for a sizeable equity interest in, or profit participation with, a company.

Private equity funding helped launch or advance a number of technology firms in the 1990s, but since the turn of the century have frequently been more focused on healthcare companies. Like hedge fund managers, managers in private equity firms are some of the highest-paid individuals in the financial sector.