Over the last few weeks we have been recruiting to fill two positions as Analysts at Corality specialising in financial model audits. While reviewing, short listing and interviewing candidates it has become clear that the majority of candidates are from three distinct categories: I have below tried to outline typical strengths of the different background when it comes to working successfully as a financial model auditor. Clearly everyone is different and I have generalised a fair bit to arrive at the conclusions below.
Accounting / audit / finance
The most common background by far in the field of financial modeling and model audit is accounting, audit or finance. The strength of this background is pretty clear given the similarities in process, structure and work performed in financial audit compared to financial model audit and this is also why it is so common to see auditors moving into the field of model audits.
The shortcomings of this particular background is in my view that other backgrounds may have stronger financial mathematics and numerical skills (actuarial), and stronger technology skills including Excel coding, tools, tricks (science, computing).
Science / computing / technology
A lot of people start out studying science and then working in a technical role for a few years before getting into financial modeling (often via an MBA, CFA or similar). Once the financial skills have been absorbed the result is candidates that have a ‘complete package’ of numerical excellence and financial awareness. Sure, I would agree that I am terribly biased here given my own background of a M.Sc. in Physics and a M.Bus.. in Finance, but anyways…
The main shortcoming of this group of candidates in general is the lack of client interaction, presentation of work outputs and customer service. (again, I have been guilty of all of the above when starting out in finance)
Actuarial studies
Actuarial studies give students a good mix of financial knowledge and ability to solve complex problems. These skills give them a great starting platform for a successful career in financial modeling and financial model audits.
The shortcomings are not too dissimilar to the science category and for similar reasons. Students opting for actuarial studies tend to be more on the geeky side of life given their interest in mathematics etc. Trust me, I have a genuinely geeky background and know one when I see one.
A combination of actuarial studies, an outgoing personality and a couple of years in a role where complex problems are mixed with client interaction and written presentations generally result in very strong candidates for a financial modeling career.
Programmers - Good financial model audit material?
I would encourage more programmers to look into the financial model audit sector, in particular those who have been involved in structured software testing where the concepts of ‘release version’, bug control, bug reporting etc. These concepts are related to programming as well as model audits and in my view programmers have a lot of the core skills required to do a good job in financial modeling. Sure, these skills would have to be coupled with studies in finance to be able to make sense of the analysis, but this shouldn’t cause too much of a problem.
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