A Comprehensive Guide to Financial Services Management

Financial Service Management refers to the planning, directing, controlling and managing of the financial procedures of an institution/enterprise. General management principles are used to provide financial resources to the enterprise. Here’s a comprehensive guide for the ones planning a career in financial service. 

What are the elements of financial management?

• Decisions in terms of investment: 

Also referred to as capital budgeting, it indicates investment with fixed assets. Investments dealing with current assets also fall under the section of such decisions. These are known as working capital decisions. 

• Financial decisions: 

Various resources are involved in order to raise the finance, which highly depends on source types, financing periods and costs etc. 

• Dividend decisions:

Finance managers focus on decisions that are related to net profit distributions. These can be differentiated in two ways:

1. Dividend by shareholders: The rate of the dividend must be decided.
2. Retained profits: The finalisation of retained profits deals with the expansion of the enterprise. 

What are the functions of financial management?

• Evaluation of capital requirements: 

The role of a finance manager is to understand relations to the capital requirements of the specific company/institution. This includes certain costs and profits for further programmes. It needs to be presented adequately, increasing the financial capacity of the enterprise. 

• Capital composition determinants: 

After the estimations are completed, capital requirements can be managed more efficiently. Certain levels of costs and estimation are adequately represented, providing a wider earning capacity for the enterprise. 

• Choices related to funding sources: 

In order to procure additional sources, a company builds in certain choices such as:

1. Issuing shares and debentures
2. Taking and receiving bank loans or institutional loans
3. Public deposits are drawn in versions of a bond

• Investments related to funds:

The finance manager has to make decisions related to the allocations of funds focusing on profits, hence leading to the safety of investments and regular returns.

• Surplus disposal:

One of the major roles played by the finance manager is the disposal of surplus. It can be regulated by the two ways of dividend declaration and retained profits.

• Finance management: 

Cash management is another major function handled by the Finance Manager. These finances are mostly in terms of wages, salaries, electricity payments, water bills, etc. 

• Financial control:

Financial control also plays a vital role similar to the other functions. Several functions such as forecasting, ratio analysis, and cost and profit control are applied when it comes to financial control.

What are the career opportunities in financial management?

A career in finance can enrich one in several ways such as in terms of diversity and a hefty salary. Here are the top 7 careers you can pursue after a financial service management course:

Public accounting: 

 Accounting can be regarded as diverse in terms of scope and practice, dealing with various elements of financial management. It focuses on recording and maintaining the flow of cash for a public/private enterprise. They also provide suggestions related to reports to boost revenue, cancel excessive expenses and improve the health of finances.

Corporate finance:

Although a sub-section of finance, the main role of corporate finance is related to business purposes. It focuses highly on funding sources, decisions on investment and restructuring of capital, etc. The profession focuses on:

• Balance of risk and profits
• Analysis and forecasting of economic trends
• Reviews related to company reports and suggestions related to improvement measures
• Focuses on stock values
• Performance of tasks related to financial service management

  Investment banking:

This profession focuses on tasks related to the remodelling of finances. Investment modelling mostly deals with numbers and the introduction to decisions related to the improvement of business procedures. A highly insightful knowledge is provided by these practitioners when it comes to economic trends and financial markets. 

Management of portfolios:

Portfolio management can be regarded as a combination of science and commerce as it also requires the elements of mathematics, science and business analytics. The role of a portfolio manager is to focus on an overall investment related to individuals or institutions. 

Management of risk:

Professionals focus on identifying market risks and recognise poor outcomes related to investment. They mainly deal with the maximisation of returns with minimal risks. 

Financial planning:

Both individuals and enterprises deal with the services to maintain financial stability. It centres mostly around financial statement reviews and cash flows related to savings. 

Commercial banking:

This profession maintains a range of services when it comes to both individuals and institutions. It deals with the analysis of financial statements related to industries. 

Conclusion

To learn more about financial service management, the best solution is to enrol in the financial services and capital markets course. The Advanced Management Program in Financial Services and Capital Markets by Imarticus can be considered the best financial service management course for all. Taught by the faculty of IIM Lucknow, this course takes place for over 6 months and offers a range of job opportunities after completion. The application deadline is the 16th of September, 2022 so grab your seats to venture into this wonderful journey of financial services management!