Career Opportunities in Capital Markets – An Overview

If you think that a career in finance means only a traditional type boring job at a bank, you are mistaken. There are a lot of options in finance to choose from. In fact, they are countless, exciting and challenging. Like any other market, this too has risks and rewards. The world of finance includes the capital market too. In this market, there are a huge number of career opportunities for men and women alike.

As most people already know the CM has three parts- investors, issuers and investment dealers. These three are the integral part of the market and play complementary role to each other too.

The main functions of this market is to raise funds for various companies and government by the means of selling securities- equities and bond- in which investors invest a lot of money.

However the good news is all the three parts offers career opportunities. In order to work in such a market, one needs to have math or statistics as their subject combination. Plus, they must have good communication skills, team leading and team playing qualities. The most important thing to remember here is that an aspirant must have an interest in this field. Like any other industry, this one is too a competitive one and grades of the applicant matter a lot. At times, university transcripts are essential. Those who have it get good salary and ample scope to grow up as a professional.

There are various roles played by professionals in the capital market. They are as follows-

Investment bankers, research and economics analysts, portfolio management investment advisory service, institutional sales and trading.

In order to play these roles, one needs to get certified and accredited by an institution. Additionally, there are other roles available especially in marketing operations, accounting, law, consulting and public relations.

When we compare the number of male participants in the market and the female aspirants, the number of the latter is significantly less.

Women in Capital Markets (WCM) is a non-profit organization that promotes the entry, advancement and development of women in this industry. Members, including students, newcomers and seasoned professionals, have opportunities for:

Networking
Mentoring and professional development
Career path insights for students
Forums to share best practices with industry leaders
And much more!
There are many online programs that help students educate themselves and launch a new career in capital markets. One of the major courses available online are Treasury and Capital Markets.

To sum up-

If you are looking for a career in capital market, pursue a professional online course that will save both your time and money. Choose the right institution and get set to embark on this new career.

Bank Sales Management – 4 Steps to Boosting Sales of Corporate Finance-Capital Markets

With notable exceptions, commercial bank efforts to boost revenue by selling corporate finance and capital markets products to middle market have not met expectations. This, despite significant investments in investment banking capabilities, product training, and corporate finance training that have kept corporate finance teachers busy for several decades. Why is this? What can sales team leaders and market managers do?

Two Key Factors Reduced the Growth Rates for Capital Markets Capabilities

While the reasons for under-performance vary bank to bank, there are two universal themes. First, marketing strategies. The “service” organization (i.e. the capital markets group) and the field sales force did not mesh. The groups had different objectives and different compensation plans. Many sales people considered the investment bankers arrogant and transactional. The investment bankers considered the relationship managers dim-witted and antiquated. As a result, the two groups could not collaborate to define effective marketing strategies and to exchange the information each group needed to fully take advantage of opportunities.

Second, sales process. Bank sales managers took the view: “RMs are already talking to these companies. They can cross sell or refer opportunities for capital markets.” The sales managers did not see that customers don’t buy capital markets services the same way they buy more traditional bank products. Loans and other bank products have been sold through a “features/benefits/price” conversation. Capital markets products and services must be sold as if they are “professional services,” where ideas and professional competence are the primary value.

What will it take to close the gap? While much progress has been made, the most critical elements are:

1. better definition of market strategy and sales processes,

2. a new approach to training,

3. more focused sales management, and

4. a recognition and compensation philosophy that, at minimum, does not distract sales people from the task.

Better Definition of Market Strategy and Sales Processes

Market strategy, particularly target selection for each capital markets capability, is critical. Specialists and relationship managers must share a common understanding of “what a qualified prospect looks like” for each capital markets product or service. These definitions should be specific, for example: “Manufacturing companies with sales > $50 million who meet criteria for Bbb debt ratings and that are interest rate sensitive.” RMs must know these criteria for each of the opportunities they’re expected to find. These criteria enable RMs to plan their sales efforts and to forecast prospective business effectively. They also reduce the amount of “noise in the system” from opportunities that don’t deserve attention from scarce investment banker resources.

Crisp sales process definitions will help boost the number of opportunities identified and reduce effort expended in sales process. The field sales organizations and product specialists must define (for each product or service):

Sales process steps (from initial conversations through origination to the end of execution) respective roles in the sales process.
Hand-off points (as from RM to specialist and back again).
Information requirements for each service (what information RM or specialist passes to the other).
Service standards for response times to inquiries, lead times for presentations, and other sales support activities.
These definitions provide a framework for RMs and specialists to work together effectively, each knowing what they can expect from the other and when.

New Approach to Training and Sharing Information

To meet client expectations, bank training must prepare RMs for their roles in the sales processes (which differ by product or capability). Depending on the RMs’ roles in opportunity identification and selling, product training and sales training should be modified.

This is not a new problem. For example, in 1998, describing Merrill Lynch’s initial attempts to generate additional mergers and acquisition advisory business, Fortune magazine reported: “[Clients] wanted bankers who came to them steeped in knowledge of their industry and full of creative ideas…That was a problem for Merrill’s M&A bankers, who were generalists… Many bankers simply didn’t know enough about each of the industries to make provocative presentations…” (Fortune Magazine, April 27, 1998, page 138) Data provided by Greenwich Associates and other firms confirm that clients today expect the same from investment bankers and commercial bankers who want to provide the more strategic capital markets and corporate finance services.

Like Merrill, bank leaders now must make specific decisions around how they are organized and how their bankers are prepared to respond to these client expectations of advisors. The same logic applies in small business, middle market, and large corporate banking. Whether you’re offering M&A advice, Treasury Services, mutual funds, or debt financing, product training should be transformed into “customer training” to focus on:

Owner, CEO, or CFO issues and concerns.
The problems that the bank’s capabilities solve.
Questions that will help the RMs assess a customer’s goals and circumstances and draw conclusions about which investment bank capabilities are appropriate and what potential benefit will be created for the customer.
Answers to customer questions, including:
What does this do (explained in terms normal people can understand)?
When does this approach benefit a company like ours?
What are the alternatives?
Who have you done this for?
What will it cost and how long will it take?
Sales training should shift toward a professional services model in which the value comes from the expertise of team members, of which the RM is one. Clients want counsel from people who have been down particular roads before. They are looking for advisors who can take a view or a position about market conditions and other factors. Sales training should prepare RMs to probe these issues deeply and to offer opinions. RMs must be good representatives of the expertise that will later come from the capital markets professionals.

This begins with intimate customer knowledge. Generally speaking, RMs know their customers well at a transactional level – specific needs which the customer has decided to address. Generally, they do not know their customers well at the level needed to identify opportunities or capital market services. Key missing ingredients include:

Customer goals, strategies, policies and market positioning (which provide the context for proactive opportunity identification).
Ideas and strategies that are in “entering discussions” and have not moved to the “take action” stage.
Variables (such as commodity prices) that bring risk into the customer’ business.
The sales training must also teach the RMs to position the capital markets group’s capabilities and begin prescribing sales processes. Often, this will include the ability to describe “success stories” that demonstrate capabilities and market savvy.

Finally, make sure your RMs are receiving and reading information that they will need to discuss in sales calls and conversations over meals:

Capital markets activity (rates, players, deal structures, etc.) and current trends/opportunities.
Up-to-date information about internal processes, players, and methods.
More Focused Sales Management

Sales managers (from line-of-business head to sales team leader) must decide how their teams will “play the game.” Since all product suppliers in the bank are competing for sales force mind-share, the sales managers must set a strategy and priorities for sales force attention. With the basic direction and expectations set, there are several important goals for sales managers:

First Priority: Field Coaching

Get into the field to observe calls and to coach…even though you don’t have time.Sales management coaching disciplines drive sales results. If you want to identify more opportunities for capital markets and corporate finance, you have to increase the amount of time and attention you pay to them through your questions and through your time in the field. This is particularly true if you want RMs to do more than spot opportunities and toss them over the fence. If you want them to question deeply to reach the pain and the payoffs that will sell capital markets and corporate finance, you have to be there with them, and you have to model it.
Help the RMs learn to anticipate customer issues and present ideas by asking questions about customers’ plans and strategies and prompting them to anticipate needs and generate ideas. The main rule here is: You get what you ask about. If you ask about ideas and customer plans, you’ll get more of them. If you ask about loan renewals and administrative matters, that’s what you’ll get.
Use whatever information you have about products, internal processes, and success stories to drill and coach the RMs. To be confident speaking to business owners or senior officers, they have to master the language and the stories. Use sales meetings, time in the car or on the plane, or phone time to ask questions like: “How do you describe our private placement capabilities?”
Second Priority: Planning and Review

Create good sales process descriptions and measures so that you can accurately determine where RMs are working in the sales process. You should be able to say to an RM: “To be successful in your territory with capital markets, you need to identify 50 opportunities, make 30 idea presentations, submit 20 proposals, and close 15 deals with an average fee of $X”. This knowledge comes from tracking and studying RM activities so you know, for your market, what the guidelines are.
Help the RMs prioritize their accounts – which accounts should get the “financial advisor” treatment, which match the profiles of companies that would benefit from particular capital markets and corporate finance services.
Insist on planning – a 1-year territory business plan and account plans for the top 5 – 10 customers and 5 – 10 prospects. The planning will (1) help focus the RM’s time on accounts most likely to be productive and (2) help the RM think through customer’s goals, strategies, policies, and obstacles.
Review progress toward targets through:
Monthly business review meetings with RMs, to review their short term action items and forecasted business.
Quarterly account reviews, to revisit their one-year business plans and all account plans – where are we versus what we’d planned, why, and what do we need to do to close the gap?
A Supportive Recognition and Compensation Plan

The basic test we apply is: “Do no harm.” Relationship manager recognition and compensation plans are typically complex because of the large array of products and services available for sale and the impact on a bank’s balance sheet and income statement. Separate recognition and incentive compensation plans. The recognition plan should kick in for activities that drive sales. The compensation plan should kick in for sales results. Having said that, our “no harm” guidelines include:

Create a system of immediate and visible recognition to be awarded based on high quality completion of activities – capital markets or corporate finance opportunities identified, proposals submitted, and so on. You want to stimulate and recognize the activities that will ultimately lead to the results. Use personal notes, peer recognition in team meetings, circulation of good proposals to team members, and other techniques that call attention to both what was done and how it was done.
Establish incentive compensation plans that reward RMs for generating capital markets or corporate finance revenue. To shift RM attention toward certain capabilities, make some revenue count for more in the plan than other types of revenue. (Example: private placement fees might count for $1.25 per dollar of fee, while loan commitment fees might count for 80 cents per dollar of fee). DO NOT run sales contests based on product sales (numbers of installations or revenue by product). The dynamics of these approaches are completely counter to the “advisory” approach needed to position and sell capital markets and corporate finance services (and other bank products as well).
Establish incentives for retaining accounts. This compensates the RM for the time and risk associated with working accounts that are worth keeping but not, in a given year, big revenue generators.
Compensation and recognition plans must recognize that RMs must invest time to develop their knowledge, competence, and confidence with their customers’ circumstances and with the services they are representing. The plans must recognize the time RMs invest with their customers, learning far more about them than they had to learn when selling ZBA accounts, loans, or corporate trust services. The plans must recognize the risk the RMs take when selling these services; the risks to their compensation and sales production are higher for capital markets and corporate finance capabilities than they are for standard loans and operations-oriented products.

Summary

Sales management coaching drives sales results. To accelerate sales of capital markets and corporate finance products and services toward optimum levels:

Clarify market strategies and sales processes by product, including the specific roles and hand-off points for RMs and specialists.
Increase emphasis on “customer and industry” training. Make sure RMs see a constant flow of market information (about deals, rates, and market activity) that they need when they talk to customers.
Focus sales management attention and recognition on the activities that lead to the results you want (high sales of corporate finance and capital markets products). Field coaching and planning are the highest two priorities.

Empowerment and Equality and Your Finances

The slogan “girl power” has been used for decades to encourage and celebrate female empowerment, independence, and confidence. The term used most often relates to sports and employment; however, new studies are showing that women need to exert their girl power when it comes to finances and financial planning.

A recent study released by UBS shows that 58% of women worldwide defer long-term financial decisions to their spouses. This study included nearly 3,700 high-net-worth married women, widows and divorcees in nine countries. The results of the study showed that 85% of women were responsible for the day-to-day finances; just not the long-term.

What is really interesting is the generational span of this survey and, most notably, the generation most likely to allow someone else to control their decisions: millennials! Millennials are a generation well known for promoting equality and empowerment. Unfortunately, the survey results indicate the helicopter-style parenting millennials were raised with, where someone else is always ensuring their well-being, has bled into the financial realm. Fifty-nine percent of millennial women aged 20 – 34 are more likely to allow their spouse to take the lead compared to 55% of women over 50. The general excuse from the younger women is they have “more urgent responsibilities than investing and financial planning”. Even more contradictory to the equality movement is they “believe their spouses know more about long-term finances than they do”.

The challenge this arrangement poses is the lack of preparation and understanding should a life event such as death or divorce occur. The report noted that 74% of the widowed and divorced women it surveyed reported “discovering negative financial surprises after a divorce or death of their spouse.” Hindsight resulted in 74% of these respondents wishing they had been more involved in long-term financial decisions while they were married, rather than trying to navigate them while coping with such significant life changes.”

The ideal solution is for both partners in a relationship to be aware of both the short- and long-term aspects of their finances. Whether you are married, engaged, common-law or committed, financial planning is another part of creating a responsible long-lasting arrangement between two parties. In this age, knowledge really is power. So be powerful, take control of your money.

10 Common-Sense Ways to Cut Expenses and Get Rid of Debt

Do you know how much you spend on groceries every month? Do you understand the way your monthly home bills add up? These are just a couple of questions to ask yourself when figuring out how to cut expenses. Better budgeting doesn’t mean you live a boring, restricted life or have to feel weighed down by money. It’s actually the exact opposite! When you have a deeper understanding of your savings and expenses, you’re able to do more with less. You can still enjoy your life within a reasonable means of spending, while also putting more money away in your personal savings. If this sounds like the answer your bad credit score has been looking for, keep reading. Here are 10 simple ways to cut expenses and create more financial freedom in your life.

1. Take Care of All Your Late Payments
First things first, you have to get all of your late payments in order. These will come back to haunt you if you keep putting them off. The longer you wait to pay bills that are past due, the higher the late fees become. Sit down and take care of every single one of your bills. Pay off the ones that are late right away and set a schedule to pay your next cycle of bills ahead of time. This is the best way to keep yourself from falling behind.

2. Avoid Paying Interest on Debt
Keep in mind that your minimum billing payment may not be the total amount you owe. This is common for things like credit cards and other big amounts of debt. Instead of just paying the minimum, commit to paying off all of your debt every month. If you don’t, you risk accruing interest which can sometimes be just as bad as a late fee. Keep in mind that long-term loans – like for cars, homes, and higher education – work a little differently. But, there are still ways to lower your interest rate.

3. See if Some Plans Can Be Lowered
Another option you have is to lower your monthly expenses altogether. You may be paying more than you need to for a lot of your services. Consider how much of your phone plan you really use, for example, or how often you take advantage of having cable. It’s worth talking to your respective providers and seeing what kind of options are available to you. This goes for everything from your phone and cable bill, internet expenses, and insurance plans (for home, health, and auto). Even your water and electric bills can be lowered with smarter habits at home.

4. Refinance Your Mortgage
Speaking of home-related bills like water and electric, how’s your mortgage doing? This is one of the highest average household monthly expenses most people have to budget for. But, it doesn’t have to be as costly as it currently is! You can refinance your mortgage to create a better monthly payment. Keep in mind that this may extend the period of your mortgage loan or change your interest rate. It’s also not a way to cut spending that you should do all the time. Still, it’s an option worth looking into to better allocate your monthly funds.

5. Stop Buying Coffee Every Day
There are the big ways to cut expenses like refinancing your mortgage and avoiding late fees, then there are smaller habits that add up. Your morning coffee doesn’t seem like much if you only spend $2-5 on it. But, if you’re buying coffee every single day (M-F) instead of making it at home, you’re not making the best use of your money. The average American spends over $1,000 on coffee every year. That’s a thousand dollars you could better allocate to your mortgage, car payment, or savings account.

6. Eat at Home More Often
Coffee isn’t the only expense that can sneak up on you. Eating out as a whole is a big expense for most Americans. Between grabbing breakfast on the go when you’re running late and going out to dinner with friends, you’re probably spending more on eating out than you think. It’s not like you have to eat at home for every single meal from now on. But, it is smart to create an eating out and entertainment budget and stick to it. This will help you enjoy yourself without worrying so much about your personal finances at the end of the month.

7. Shop Store Brands
Eating at home means you’re going to be frequenting the grocery store a lot more. You’ll start to learn how to stretch your grocery budget even further and create delicious dishes with seemingly simple foods. More so, you’ll realize just how much you can save by buying store brands! Store brands are equally as good as name-brand products, if not better. They’re cheaper, too – and saving a dollar here or a few bucks there as you go through each aisle makes a difference when you’re checking out at the cashier.

8. Buy Items on Sale or Secondhand
The next way to cut spending is to lower the amount of money you spend shopping for things like new clothes, home decor items, and other miscellaneous goods. Try to shop secondhand for these things before you drive to the mall. You can do so at thrift stores and pawn shops, or you can go online and check out all kinds of re-sell sites that specialize in everything from clothing to auto parts. If you do have to go to the store for something, at least try to find a discount code or go during a sale to make your efforts worth the cost.

9. Set up Automatic Savings
Two of the best ways to start using automatic savings are either with your paycheck or your debit card. If you have direct deposit, you can set up your paycheck so that a certain amount of it goes into savings right away. This will lower your temptations to use your money on miscellaneous things or “splurge” because it will already be put away. With your debit card, you can look into your bank’s cash back options or use a personal finance tool to help you make the most of every transaction you swipe for. These can help you better understand where your money is going and put some more money away, too.

10. Take Advantage of Free Things
Last but not least, don’t hesitate to take advantage of free things when they’re available to you! This goes for everything from free food at work to free flu shots at the pharmacy down the street. But mostly, free entertainment is what you can save the most with. You don’t have to go on fancy date nights every week or do expensive things to treat yourself. There are all kinds of ways to cut back on entertainment spending without lowering how much fun you get to enjoy.

3 Biggest Downsides of Bad Credit

Ideally, all of the decisions we make in life involve consideration of both the pros and the cons of the possible outcomes. For example, the decision to eat a piece of chicken past its expiration date should be based not just on the potential for a tasty dinner, but also the potential for a less-than-pleasant gastro-intestinal reaction.

In other words, most things in life have both upsides and downsides, and our actions should be – though aren’t always – predicated on whether the upsides outweigh the downsides. While many bad decisions can occur as a result of a failure to consider the downsides, just as many poor choices are the result of the failure to understand the downsides, rather than not considering them at all.

Most people know that irresponsible financial behaviors can give you a bad credit score, for instance, but many folks tend to underestimate the many downsides of having bad credit. To help put things in perspective for your next financial decision, here are three of the biggest downsides to having bad credit.

1. You Have a High Chance of Being Rejected for New Credit
At its heart, having bad credit is basically like walking around wearing a sign that says, “I can’t handle debt.” At least, that’s how most creditors are going to interpret your poor credit history and low credit score when you come asking for a line of credit.

That’s because lenders use your credit reports and scores as a means of determining your credit risk, or how likely you are to repay what you borrow. So, if you have a history of missing payments or defaulting on debt, lenders aren’t going to want to give you more money, and they will reject your application for new credit.

Think of it this way: If you loan your neighbor your lawnmower in June but they never return it, how likely are you to lend them your snowblower in December?

Since most major banks have a fairly low risk tolerance, bad-credit consumers are left with limited options for finding a credit card or loan. Namely, you’ll be looking at lists of subprime lenders who specialize in bad-credit, high-risk applicants – lenders who aren’t exactly known for their affordability or top-tier rewards. Which leads us to the next big downside to bad credit: the expense.

2. Creditors, Landlords, and Utility Companies Will Charge You More
It took a few tries, but you finally found a subprime lender that will work with you. Great, hard part over, right? Wrong. Lest you think that qualifying for new credit is the only big downside to having bad credit, just take a look at how much that credit is going to cost you.

As we mentioned, your credit score is what lenders use to determine your credit risk. High-risk applicants are the most likely to default on their debt (not pay it), so lenders willing to work with bad-credit consumers have to find some way to balance the risk. They do this by jacking up interest rates and adding on extra fees.

As an example, consider a $10,000 car loan repaid over three years. Applicant A, who has a great credit score of 750, will likely be offered an APR of around 3.5%, which means Applicant A will pay around $550 in interest over the three years.

At the same time, Applicant B, who has a low credit score of 580, had to use a subprime lender to get the same size auto loan. The subprime lender charged Applicant B an APR of 10%, which means Applicant B will pay over $1,600 in interest over three years.

What’s worse, it’s not just lenders and credit card issuers that will charge you more for having bad credit. You’ll likely face a credit check when applying for a new apartment or when you set up utilities in a new location, and having bad credit can result in being charged a larger security deposit than you would otherwise need to provide.

3. You May Miss Out on Valuable Financial Opportunities
An important part of finance and accounting, opportunity cost is basically the consideration of what you’re missing out on when you make a decision to do something else. For example, if you choose to spend your last $5 on a fancy coffee, the opportunity cost could be that $5 hamburger you don’t get to eat later.

When it comes to your credit, having bad credit is rife with opportunity cost. Take credit cards, for instance. With bad credit, you’re stuck using subprime or secured credit cards that likely cost a lot without offering very much. In contrast, if you had good credit, you could potentially earn hundreds of dollars worth of credit card rewards and perks every year simply by using the right credit card.

And it goes beyond credit cards. Drivers with good credit can get dealer incentives when shopping for a new car, and you can even earn insurance discounts for having a healthy credit profile.

Don’t forget the extra cash you’ll likely be required to provide when renting a new apartment. Say you’re required to make a $1,000 security deposit when you move in because of your bad credit. That money could easily be earning you dividends in your retirement account if it weren’t being wasted in your landlord’s bank account.

Don’t Let Bad Credit Hold You Back
Although it’s our own decisions that often lead us to bad credit, few of us actively choose to tank our credit scores. You can wind up with bad credit as a result of a series of seemingly minor decisions that are made without full consideration of the consequences. Hopefully, however, knowing these three major downsides of bad credit helps give you perspective when making your next financial decision, be it large or small.

For consumers already struggling with bad credit, these downsides are likely daily considerations. But they don’t have to be lifelong obstacles. You can rebuild bad credit over time by practicing responsible credit habits. You can also use credit repair to remove any errors or unsubstantiated accounts dragging down your score.

The most important rule for building credit is to always, always, always pay your bills on time. Your payment history is worth up to 35% of your credit score, and delinquent payments can cause you to lose dozens of points with a single mistake. You’ll also want to ensure you maintain low credit card balances and only borrow what you can afford to repay as agreed.