Securities Industry Job Outlook
The securities, commodities, and other investments industry should experience average employment growth between 2008 and 2018, but competition for jobs in the industry will be quite keen.
Wage and salary employment in the securities, commodities, and other investments industry is projected to rise 12 percent from 2008 to 2018, compared to the 11 percent increase across all industries. Employment growth will be driven by increasing levels of investment in securities and commodities in the global marketplace, as well as the growing need for investment advice. However, projected growth rates are expected to be more moderate than in the past due to the financial crisis.
Over the projection decade, the baby boom generation will move from their peak saving years to their first years of retirement. This may continue to boost the stock and bond markets, as well as mutual funds and investment advisory as retirees look for reliable investments.
Another factor contributing to projected employment growth is the globalization of securities and commodities markets—the extension of traditional exchange and trading boundaries into new markets in foreign countries. Recent developments, from the rapid growth of Asian economies to the merger of the New York Stock Exchange and Euronext, will continue to make Americans more eager to invest abroad and, at the same time, encourage investors in other nations to purchase U.S. securities.
Online trading will grow and reduce the need for direct contact with actual brokers, but the number of investment advisors is, nevertheless, expected to increase as many people remain willing to pay for the guidance that a full-service representative can offer. Employment of personal financial advisors is also expected to increase rapidly. As the complexity of financial planning grows, individuals will continue to look to experts to help them manage their money.
Financial analyst positions are also expected to grow rapidly. Globalization and the growth of developing countries will provide a multitude of investment opportunities, and financial analysts with knowledge of foreign accounting standards and economies will be needed to examine these investments. Furthermore, the growth of mutual funds, hedge funds, and other large-scale investments will continue to create jobs in this occupation.
Advances in telecommunications and computer technology will continue to shape the industry as companies look for faster and more secure ways to perform tasks. Computer software engineers and network systems and data communications analysts will continue to have important roles in this industry as trading and the recordkeeping that supports trading become more automated.
Tempering growth in the securities, commodities, and other investments industry, however, will be the substantial stock market losses of 2008. Financial compliance is a rising concern for companies, as various scandals have impacted the industry over the past several years, resulting in large scale losses for many companies and individual investors—some who may never return to investing. While the merger of NASD with NYSE Regulation creating FINRA should provide some relief for companies, the amount of oversight from both private regulators and the Securities and Exchange Commission (SEC) continues to increase. This may lead to greater employment of financial compliance specialists, while investment bankers, top executives, and sales representatives are not expected keep pace with industry growth. Many office and administrative support occupations also are expected to grow more slowly than the overall industry because firms will continue to reduce costs and become more efficient through automation.
Furthermore, the financial crisis may result in more retirement savings being managed by the retirees themselves because most companies have moved from defined benefit plans—such as traditional pensions—to defined contribution plans—such as 401(k) programs and Roth IRAs, plans that often do not require professional advice.
Despite projected employment growth in the securities industry, keen competition is expected for most jobs, largely reflecting the recent financial crisis in which many firms incurred massive losses, were forced to consolidate, or in a few cases, became insolvent. Jobs in the upper echelons of the industry, such as investment banking and fund managing, that have extremely high earnings will particularly be difficult to enter. Jobs in exchanges also will be difficult to obtain as the number of applicants is expected to greatly exceed the relatively few positions available. Positions at regional securities firms and brokerages may be somewhat more accessible.
Prospects will be best for graduates from 4-year degree programs from nationally recognized universities and colleges. Companies value a background in accounting, finance, and economics. Successful completion of a recognized internship program may also be very helpful to beginners. Earning a Master's of Business Administration degree or one of the professional certifications recognized in the industry have become increasingly important assets for both job opportunities and advancement.
Source: Bureau of Labor Statistics, U.S. Department of Labor, Career Guide to Industries, 2010-11 Edition