Whatis a financial manager? Well, a financial manager is a type of manager whooversees finances and budgets, also collects financial date while assessingpast performances of an organization or company. Their primary job is to anticipate trends and development and plansaccordingly. (All About Careers, 2018) Financial managers are also the peoplewho decide where a company will invest their funds, it’s even his decision to determine how to distribute surplus of money that would distribute amongst shareholders. Financial managers study the economic progression of a company and decide where to borrow orgather money from within an organization to meet financial needs.
Producing financial reports, direct investmentactivities, and develop strategies while planning for the long-term financialgoals. Financial managers work in different places such as banks and insurancecompanies. Nowadays financial managers do more analyzing of businessreports and forecasting, they monitor financial details and meet all legalrequirements. They supervise employees to ensure all financial reporting andbudgeting done correctly.
They also provide the review of company financial reportsto reduce cost, saving the company money. Most financial managers work with seniorexecutives and with the heads of departments to develop data that any of themanagers might need. They can be employedin the private or public sectors such asmultinational corporations, retailers, financial institutions, charities,manufacturing companies, universities, and business companies. (FinancialManager, 2018) Financial managers are required tohold the highest ethical standards because of the internal and externalstakeholders depending on their decisions. They need to be accurate, the integrity of the most senior, timeliness, and transparency. Due to Enron andWorldCom, financial managers are under the microscope more than ever to ensuretheir customers or business are grantedthe complete, correct information tosucceed.
Financial managers are not to hide or obscure information that wouldrender relevant financial detailsimpossible for shareholders to understand. (Ethical Issues, 2018) Financialmanagers should not be prejudice, show any bias, or conflict of influence whenit comes to any of their actions. They should be comfortable disclosing any conflicts when it comes to investing, thismeans not lured into manipulating theircustomers. Most large companies haveinstituted a code of ethics that are general guidelines to encourage employeesto behave ethically and responsibly. Italso calls for a group to have a specificcode of ethics that professionals are bound by and are to conduct themselves asprofessionals.
Dueto, companies such as Enron and WorldCom embezzling and inaccurately reportingfinancial statements to ensure profits for top executives. Such safeguards arein place to protect investors such acts as Chief Financial Officers Act of 1990(CFO Act), Government Management Reform Act of 1994 (GMRA), and Accountabilityof Tax Dollars Act of 2002 (ATDA). The CFO Act lays the foundation forcomprehensive reform of the federal financial management system.
It’s also appropriatebecause it establishes a leadership structure that audits financial statements. The other federal safeguard is the GMRAwhich reduces reporting abuse; it expandsthe number of agencies that the CFO Act must report too. ATDA is the finalsafeguard since it requires reporting all executive branches of an organization to submit audited financialstatements. In 2002, the Sarbanes-Oxley Act protectedinvestors from fraud by corporations while adding felony criminal chargesagainst the culprits involved. These are considered some of the leading safeguards since they watch over the board of directors and any otherfinancial officers while ensuring no other financial officers are involved inany malpractice dealings. There are two U.S.
Stocksmarkets; they are the New York Stock Exchange (NYSE) and the NationalAssociation of Security Dealers and Automated Quotations (NASDAQ). Thedifference between the two is NASDAQ takes place electronically while the NYSEtakes place on the floor of exchange in person. Another difference is the NYSEstocks are well-established companies with more significant turnover comparedto NASDAQ which stocks are primarily technological companies.
The best privateinvestment option would be the NASDAQ due to there merger with the AmericanStock Exchange (AMEX). Investing one’s hardearned money is an important decision, which includes many ways to invest. Few of the investment products that areavailable are bonds, stocks, mutual funds, money markets, capital markets, andexchange-traded funds. Bonds are investment security which obligates the issuerto pay the bondholder a specific amount of money. These types of bonds includeU.
S. Treasury bonds, agency, municipal, corporate, and high yield bonds. Stocksgive ownership of a company with shares that are also called equities, theseshares once bought by a person are called shareholders.
However, mutual funds aredifferent in which a company pools money from multiple investors than investsthat money into securities which can include stocks, bonds, or short-term debt.The exchange-traded funds (ETFs) are funds which track indexes from theNASDAQ-100 Index, and the Dow Jones. Buying sharesof an ETF mean buying shares of a portfolio that tracks return and yields. The different types of institutions that sell investment products are investment banks,stock exchanges, brokers, and businesses. Investment banks are a financialinstitution which helps assist wealthy individuals, corporations, andgovernments while the stock exchange allows for investors to purchase and sellstocks on the stock market. The brokers are individuals or firm employed byothers which negotiate contracts for commissions or plan and organize sales.
There are multiple types of brokers such as commercial or merchandise broker,insurance, real estate, and stockbrokers. A business will sell stocks toinvestors to raise capital for the company.All these institutions that sellinvestment products will help investors invest their money responsibly.
Some of theinvestment products available include ownership investments which are all aboutowning an asset, and they include stock,precious objects, real estate among others. There is also lending investmentswhich are about buying a debt that is expected to pay, and they include bonds,certificate of deposit and TIPS (treasury inflated protection securities).Other products also include cash equivalents, REIT(real estate investment trusts), mutual funds and exchange-traded funds. These products are offered by institutions such as the government which can provide bonds and public companies that offershares