Talking about careers in finance, there are endless opportunities in every sphere. We all know about Investment Banking, Equity research, and Financial Analysis, and project Finance, but careers in Capital Markets is also one such arena which offers many rewarding options.
However, before opting for careers in Capital Markets, let us understand how the Capital Market works.
What are Capital Markets?
Capital Market is a market where Financial Products such as debt and equity-backed securities are issued as well as sold and purchased. Capital Markets mobilize the saving of the investors and puts it to productive use in long-term. Investors can be retail or institutional.
Retail investors are those who put in small portions of the money and have limited stakes. Institutional investors are the big entities who put in huge sums of money into the Capital Markets. Usually, their stakes are more and the risk shouldered by them are also higher. There are two components of the Capital Markets:
(1) Primary Markets: Primary market is a place where new securities such as equities and bonds are issued to investors
(2) Secondary Markets: In the Secondary markets, these securities such as equities, bonds and other investments are traded amongst the investors.
In a nutshell, all the financial products are created in the primary market and then traded in the secondary market by intermediaries, bank salespeople and traders.
Skills required to pursue a career in Capital Markets:
The skills required for a career in Capital Markets is very similar to that of Investment Banking and Equity Research.
Today, it makes even more sense to pursue a specialised course for careers in Capital Markets. Such kind of specialization offers a holistic learning regarding the various aspects of Capital Markets.
A strong knowledge of financial systems and the market, good negotiation and communication skills as well as good listening skills are the qualities that will help you to gain a strong grasp in the Capital Markets.
What are the various options for careers in capital markets?
Relationship Manager: A retail Relation Manager manages the accounts of the individual customers of a bank or financial intermediaries and educates them to purchase suitable products sold by the financial institution. On the other hand, a wholesale Relationship Manager caters to the corporate clients like multinational companies or SMEs.
To be successful as a Relationship Manager, you should strategize well, be a good listener, communicator, offer reliable advice, and have in depth knowledge about the financial markets and products.
Stock Broker: If a retail investor wants to buy stocks via exchanges like the BSE, NSE, they will require the help of a middleman to execute the trade. This middleman is known as a stockbroker. One of the most prominent careers in capital markets, a stockbroker can operate individually or through an established firm.
As a stockbroker, you need to be very well-versed in the markets and have the latest information about stocks on your fingertips. You also need to very confident about the future movement of the stocks so that you can offer advice on the right time to buy or sell.
Capital Market Consultant: Consultants in Capital Markets are mainly for institutional investors. These Consultants help many leading banks to automate their operations, thus enabling them to reduce their costs, improve customer service, grow revenue, and gain competitive advantage.
As a Consultant of Capital Market, you must possess deep specialist knowledge in Capital Markets business, functional and technical areas. This also includes Innovative practises and understanding of predictive analytics, robotics, artificial & communication intelligence, digital transformation capabilities Blockchain, etc.
Portfolio Manager: A Portfolio Manager is a person who manages the accounts and investments of High Net Worth Individuals. He advises them on the optimal investment mix and cherry picks the right assets for their portfolio.
The portfolio will be a mix of stocks, bonds, mutual fund, insurance policies and other precious metals. Hence, profound knowledge of financial planning and ability to give genuine advice is a must have skill.
Commercial Banker: Being a Regional Manager of a Commercial Bank is not only a matter of great honour but also brings in lot of responsibilities. Leading the team towards achieving the business of the branch and overseeing the entire operations of the bank are some of the key deliverables of the Commercial Banker.
To make your mark as a Commercial Banker, you must-have an analytical mindset, knowledge of banking products and the regulations, strong negotiation skills and the ability to work under pressure.