Sam Ferraro, a financial analyst and lecturer from the School of Economics, Finance and Marketing, shares some insights about a career in finance.
Ferraro a current lecturer for the Master of Finance talks about the opportunities in the Finance industry.
Tell me about the opportunities in the industry.
There are various roles in financial markets available to graduates across industry super funds, investment banks and fund managers.
The key growth area is commonly known as industry super funds or pension funds, which include the likes of Australian Super, UniSuper, HESTA, CBUS Super and Vison Super. Industry super funds manage their members’ superannuation.
What do we need to know about the growth of super funds in Australia?
Australia’s superannuation system has around $2 trillion in assets under management and growth is expected to remain strong thanks to the Superannuation Guarantee (SG) of 9.5%.
SG is the official term for compulsory superannuation contributions made by employers on behalf of their employees. An employer, regardless of whether they are a small or large business, must contribute the equivalent of 9.5% of an employee’s annual salary.
Historically, industry super funds have outsourced their funds under management to external fund managers, across a range of asset classes including equities, fixed interest, private equity and unlisted infrastructure assets. In recent years, the larger industry super funds are increasingly bringing in-house the management of some of these assets. As a result, they are continuing to develop capabilities and expertise internally to manage assets across various asset classes.
In addition, for some time now, industry super funds have developed capabilities and expertise internally around asset allocation, which is the decision around what share of their assets under management are allocated across various asset classes.
Careers within these organisations exist for research analysts, economists, portfolio managers and risk & compliance officers.
What investment opportunities exist for customers?
Most of the investment banks operating in Australia are based in Europe or the United States, including Goldman Sachs, Morgan Stanley and UBS. Macquarie Bank is the largest Australian based investment bank, although it too has operations around the world.
Investment banks have a number of key functions: they help corporations to raise capital – either as debt or equity, offer their clients research services around publicly listed stocks, offer investment advice to high net worth individuals, and execute trades on behalf of their fund manager clients.
Possible opportunities at investment banks exist for investment bankers, research analysts, execution specialists and investment advisers for both institutional and high net worth clients.
Can you explain a bit about the Fund Managers and Hedge Funds pathway?
Blackrock, State Street, Vanguard, Colonial First State, AMP Capital and Fidelity are among the largest fund managers operating in Australia.
Some are index or passive funds, which seek to track the performance of the ASX200 (Australia’s key benchmark index), while active funds seek to beat the ASX200 and to that end, devote resources to researching the universe of stocks.
Job opportunities at fund managers and hedge funds exist for portfolio managers, execution specialists and business development managers, who market their funds to prospective clients.
Why choose Finance?
Financial markets have undergone tremendous upheaval in recent decades. Australia’s superannuation system is among the largest retirement income systems in the world and this has given rise to a wide range of employment opportunities very few could have imagined back in the early 1990s.
The industry has also undergone structural change since the financial crisis, with most of the key industry players downsizing as growth in revenues and profitability has slowed.
Nonetheless, the industry continues to hire graduates who are expected to excel in a dynamic environment, and who can work both autonomously and in teams. Strong analytical and numeracy skills are important as are interpersonal skills, particularly for roles that are client facing. Many roles in the industry require an ability and willingness to be open minded and be challenged on your ideas and thought process.
Subject to the role and organisation, hours can be demanding; it is not uncommon to work late nights and weekends occasionally. For those who have a hard work ethic and a strong commitment to achieving the best outcome for their clients, a career in finance promises to be diverse, dynamic and rewarding.
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Story: Rita Truong