With a 7 trillion market cap, India is the 7th biggest market in the world, and it is growing leaps and bounds every year. Peoples are now shifting their investment habits from Fixed return products (like FDs) and participating in the stock market through direct investment and mutual funds.
As per a recent report from market regulator Securities and Exchange Board of India (SEBI), the number of Demat accounts (compulsory for trading) in India has crossed the 44 mn mark. However, on the flip side, in comparison to India’s population, it amounts to only 3 percent. Moreover, it is only 11 percent of the total bank accounts in India, which stand at 440 mn at present.
Therefore, there exists a huge gap as well as a huge potential in this industry and makes way for the new entrant to make a career in security markets.
A career in the stock market
The stock market incorporates various participants such as Stock Exchanges, Stock Broking Firms, Custodians, Clearing corporations, Registrar, Investment Banking Firms, Mutual Funds, and Pension Fund Companies, Research institutes, etc.
These institutes provide various job opportunities such as Fund Manager, Customer Relationship Manager, Research Analyst, Equity or Commodity Dealer, Risk Manager, Compliance Officer, and Back Office Manager, among others. Although these roles do not require a specialised degree, having a stock market certification or a commerce background might boost your credentials and career prospects.
As far as remuneration is concerned, based on your qualification, starting salaries in the stock market range from Rs 2-3 Lakh per annum, and it can go up to any level depending upon your experience and expertise in the stock market.
If a person is very clear about making a career in the stock market, then he should start by opting for commerce/account or finance subjects for graduation after the 12th standard.
Then a person can choose from various subject options available. Some of the commonly opted streams are CFA, FRM, Master in Finance, and NISM Certifications, among others.
Let us analyse some of these finer details-
Chartered Financial Analyst (CFA)
CFAs are the most preferred and paid candidates in the stock market industry. CFA is offered by the CFA Institute, US. This course gives exposure to various verticals of financial analysis such as portfolio management, reporting, qualitative analysis, ethics, and other must-have general knowledge in the area of Finance.
For perusing this course, you are not required to go to the US. This is actually a certification program like Chartered Accountant (CA) in India, where you can prepare by yourself or can take professional help from any private institute and can give examination on CFA certified exam centres across India.
This is an international certification and accepted across the world. CFA opens a plethora of career options and makes a candidate ready for various positions such as Fund Manager, Research Analyst, etc.
To pursue this course, it is advisable to have good analytical and numerical skills backed with an accounting or finance background. However, it is not mandatory, and anyone having a bachelor’s degree in any stream can opt for this professional certification.
Financial Risk Manager (FRM)
FRM is a globally recognised certification program provided by the GARP organisation of the USA. FRM gives you a strong understanding of the Risk Management concept. Both FRM and CFA provide insight into financial analysis. However, FRM is a more specialised program that focuses on Market Risk, Credit Risk, Operational Risk, and Risk management aspects of the financial market.
For FRM, you do not need to have a Bachelor’s degree; you can give this exam straightaway. After this, you will have to work full-time for two years on a Financial Risk portfolio to get the certification.
FRM certified candidates are the most preferred candidates for Risk Management roles, not only in the stock markets but also in other financial institutions such as Banks, NBFCs, and insurance companies.
Master in Finance
One can choose from various options available for a master’s degree, such as MSc Finance or MBA Finance. Master in Finance is also a preferable credential chosen by the candidates aspiring to make a career in the stock market.
Master in Finance gives you exposure to almost every aspect of the financial market, and if you do it full time from a recognised institute, you will get a definite advantage over other candidates in job selection for profiles such as Customer Relationship Manager.
The National Institute of Securities Market (NISM) is established by the SEBI in 2006. NISM provides various certificates in the securities market at a very nominal cost. SEBI has made it compulsory to have a NISM certificate for various job-roles in the security market organisations. These certifications will also help aspiring candidates to have domain knowledge of a particular subject. Therefore, the NISM certificate adds excellent value to your resume.
NISM has certified test centres across India, so one can choose the domain as per their interest and clear the NISM exam accordingly. Owing to the dynamic nature of the capital market, these certificates remain valid for three years only. Someone interested in Equity or Commodity dealings and Back Office Management must go for NISM certification.
Authored by – Mr. Ravi Singhal, Vice- Chairman, GCL Securities Limited.