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The insurance industry

The insurance industry is another large employer. Much of the insurance industry is involved in designing and selling insurance policies on people`s lives and property, but businesses are also major customers. So if you work for an insurance company or a large insurance broker, you could find yourself arranging insurance on a Boeing 767 in the United States or an oil rig in Kazakhstan.

A mutual fund collects money from individuals and invests in a portfolio of stocks or bonds. A financial analyst in a mutual fund analyzes the prospects for the securities and works with the investment manager to decide which should be bought and sold. Many other financial institutions also contain investment management departments. For example, you might work as a financial analyst in the investment department of an insurance company and help to invest the premiums. Or you could be a financial analyst in the trust department of a bank which manages money for retirement funds, universities, and charitable bodies.

Stockbroking firms and bond dealers help investment management companies and private individuals to invest in securities. They employ sales staff and dealers who make the trades. They also employ financial analysts to analyze the securities and help customers to decide which to buy or sell. Many stockbroking firms are owned by investment banks, such as Merrill Lynch.

Investment banks and stockbroking firms are largely headquartered in New York, as are many of the large commercial banks. Insurance companies and investment management companies tend to be more scattered. For example, some of the largest insurance companies are headquartered in Hartford, Connecticut, and many investment management companies are located in Boston. Of course, many financial institutions have large businesses outside the United States. Finance is a global business. So you may spend some time working in a branch overseas or making the occasional trip to one of the other major financial centers, such as London, Tokyo, Hong Kong, or Singapore.

Finance professionals tend to be well paid. Starting salaries for new graduates are in the region of $30,000, rather more in a major New York investment bank and somewhat less in a small regional bank. But let us look ahead a little: Table 1.2 gives you an idea of the compensation that you can look forward to when you become a senior financial manager. Table 1.3 directs you to some Internet sites that provide useful information about careers in finance.