Roles, Responsibilities, Licensing, and Certification Programs

The professional field of Risk Management is vast, and includes insurance, banking, energy, asset management, weather, and other industries. Besides necessary degrees in business, finance, management and economics, certifications in Risk Management are becoming more relevant. Professional organizations such as the Professional Risk Managers' International Association (PRMIA) offer comprehensive certification options such as the Professional Risk Manager (PRM) program. Additionally, they provide professionals with continuing education opportunities via classroom training sessions like 'The Essentials of Risk Management', 'Enterprise Risk Management in a New Environment', and 'Structured Products: Risks, Rewards, and Valuation'. Wondering what your day-to-day work life would be like in the Risk Management field? Below, specific roles and responsibilities are outlined for careers in Risk Management.

 

• Financial planner: A financial planner is one who uses proper planning to deal with various financial issues that include areas such as cash flow management, education planning, retirement planning, risk management, tax planning, estate planning, cash flow management, business succession planning, etc. A financial planner involved in risk management manages cash flow risks through insurance and sound risk management practices. To become a certified financial planner one must meet the standards set by the Certified Financial Planner Board of Standards, Inc.

 

• Financial manager: A financial manager's role includes preparation of financial reports, direct investment activities and implementing cash management strategies. They look at the long term goal of the organization and come up with a strategy to accomplish that goal.They play important roles in mergers and acquisitions as we discussed in previous chapters. Financial managers oversee the preparation of financial reports and investment activities.

  

• Financial analyst: A financial analyst is one who performs financial analysis for external or internal clients, and is also known as a securities analyst, research analyst, equity analyst, or investment analyst. Since financial managers are involved in helping their clients make investment decisions they are often employed by mutual and pension funds, hedge funds, securities firms, banks, insurance companies, and other businesses. Financial analysts often use statistical software and spreadsheets to analyze financial data, sport trends and develop forecasts for their employers and or clients. They work in mergers and acquisition departments compare the cost and benefits of a proposed merger or takeover. A financial analyst will focus on a credit analysis when they are involved in risk management.

 

• Controller: A controller is responsible for managing the quality of accounting and financial reporting of an organization. Many times a controller works alongside a CFO and COO and advises on potential acquisitions and other business decisions made by the organization. Controllers will be involved in all areas of accounting including forecasting and other specific projects designed by the organization.

 

• Risk manager: A risk manager is one who identifies and measures risks faced by an organization. Risk managers may cover a broad area or specialize in one single area. Experience and knowledge in the areas of accounting, law, insurance, compliance and operational areas of the financial services industry are very important. Strong quantitative skills are a must. Risk management may be part of several fields such as securities trading, loan origination, and compliance function.

 

• Cash manager: A cash manager is a person who handles the financial transitions for an organization or clients. Those duties may include: bill payments, authorizing loans, taxes, collections, financial strategies, etc. A cash manager watches for a company's profitability as well as risks and losses. They make recommendations on how the organization's money may be best spent or invested. This type of manager may work for banks, medical offices, government agencies or legal firms.

 

• Treasurer: The treasurer when referring to corporations is the head of the corporate treasury department and one who typically advises on matters relating to corporate finance. They are responsible for many areas including cash management, foreign exchange, liquidity risk management, issuing debt, interest rate hedging, pension investment management, securitization, capital structure, etc.

 

• Chief financial officer: The chief financial officer (CFO), also known as the finance director is responsible for managing the financial risks of an organization. They are responsible for financial planning, record keeping, and financial reporting and in some cases analysis of data. The CFO will report to the CEO and the board of directors. To be a CFO an MBA or strong accounting background is required.

 

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