Finance sector overview
Published: 26 Jul 2016 By Natacha Cullinan
Introduction to the finance sector
Employing more than two million people across the UK, the finance sector is ripe with roles to suit school leavers, apprentices, and graduates looking to break into the industry. Although a large proportion of jobs are in the capital, London is not the only hotbed for employment in the sector. Manchester, Leeds, Liverpool, Edinburgh, Bristol, and Cardiff all have a lot to offer young jobseekers interested in getting a foot in the financial door.
In a nutshell, this sector is involved in monitoring and advising employers and businesses on money coming in and money going out, and how best to manage these incomings and outgoings. It offers loans in order to buy goods. It can help people secure a mortgage on a home and insure their belongings. It helps people invest their finances into savings, to make their money go further. It helps people build up property portfolios, for work or pleasure.
There are three strands to business size in the finance sector. The corporate financial sector includes businesses that employ over 1,000 people (a large investment company, for example). The small to medium sized enterprises (or SMEs for short) employ anything up to 1,000 people (a local building society, for example). Micro-businesses are much smaller, and often take the form of start-ups or single business owners, who consult for companies (a freelance accountant, for example).
Which areas could I work in?
Broadly speaking, the finance sector is divided into six key areas: banking, accountancy and finance, financial planning, insurance, investments and pensions, and real estate.
Banking and building societies
These are the largest employers in the sector. Banks and building societies help individuals set up loans, mortgages, and accounts in order to manage their money.
Accountancy and finance
In order to value a company, you need to make sure your accounts are in check – otherwise known as your ‘books’. A finance department will make sure the money going out does not exceed the money in. An accountant or finance expert can be employed by the company (in-house), or can be contracted (external).
Financial planning includes the strategy behind money management, to effectively decide on investment, funding, and pay-outs, so as to make a business profitable and sustainable. Forecasting, budgeting, and risk management are all key focus areas in this section of the finance sector.
Whether you are looking to insure your belongings at home, take out holiday insurance, or want to insure your car, the insurance sector aims to balance risk against the value of what you would like to insure. Insurance companies work with professionals such as doctors, lawyers, and property experts to ensure policies and claims reflect the risks involved.
Investments and pensions
People who work in investments and pensions are required to research, analyse, and offer their insights on areas that could see a strong financial growth. Whatever the assets involved, employees in this area advise their clients on where best to invest their money to grow their income.
The property sector employs a lot of people to invest money in bricks and mortar. Whether a client looks to invest their funds in a property in the UK or overseas, employees in the real estate sector will assess risk, look at debt management, and secure investment in offices, homes, holiday properties, and more, to turn these into estate assets for their clients.
Which jobs exist in the finance sector?
Finance touches all sectors, so you could just as easily be working for a bank lending a small business owner some investment, as working out the financial predictions (or forecasts, as they are known in the industry) for a music producer, or helping a family invest their money in a family home.
The sector doesn’t just employ maths whizz kids and Excel maestros – you could raise the profile of a particular bank in a marketing role, or you could help plan a media strategy to help an insurance company hit the headlines. You could even help recruit talented individuals at a hedge fund in a role in HR.
Who recruits in the finance industry?
Big corporate companies obviously attract a large number of applicants, but it is the small and medium sized enterprises (SMEs) that actually employ the most people in this sector. The latter will not have as formal a recruitment process as the likes of PwC, Barclays Capital, and AXA, and could give you the opportunity to grow in your role quicker in some cases, due to their management style.
The big four, the largest accountancy and professional services companies, include Deloitte, KPMG, PriceWaterhouseCoopers (PwC), and EY (Ernst and Young). They employ thousands of people to help manage finances and forecasting for external businesses and government bodies, offering their financial knowledge and experience to business owners.
Banking and investment includes retail banks (or high street banks) as well as private investment banks and building societies. Some popular names include Barclays and Barclays Capital, HSBC, TSB, Halifax, and Nationwide. They offer schemes from internships, to apprenticeships, to graduate entry level jobs.
Insurance companies can vary in size. The most famous include AXA, ING, Aviva, and LV. Insurance companies can focus on one particular area, such as Columbus for travel, Churchill for motor insurance, and Hiscox for home insurance.
What are the pros and cons of working for finance corporates?
- Clear schemes mean clear job responsibilities.
- Potential to progress up the career ladder in a defined way.
- Larger pay packets.
- Better benefits schemes.
- Lots of competition in terms of applications.
- Fewer chances to try your hand at a bit of everything.
- More people means more competition to get noticed.
- More structured approach (though this could also be a pro).
What are the pros and cons of working for smaller finance companies?
- Less competition to get on schemes.
- A more flexible approach to your workload. You could work across a lot of different areas in a short space of time.
- Closer relationships with your colleagues.
- Less structure.
- Salaries tend to be lower.
- Less name recognition when you apply for another role