It is helpful to have a mental framework of what functions financial services firms do when looking at job possibilities in this area. Professors Zvi Bodie and Robert Merton of Harvard Business School argue that financial service institutions, systems and products can be understood by providing the following functions: a payments system for exchange of services; a mechanism for the pooling of funds to undertake large-scale enterprises; a way to transfer resources; a way of managing uncertainty and controlling risk; a body of price information to help coordinate decentralized decision-making; and a way of dealing with agency problems created by asymmetric information.

U. S. News and World Report listed the position of financial planner as one of the twenty hottest professions for the future. They note that the entry of baby-boomers into middle age with a bewildering array of investment choices will make financially planning a really hot profession in the future. This said, financial planners interviewed recently point out that getting a solo practice going as a financial planner today can be difficult and highly competitive.

If you are thinking of going into money management be sure to train yourself well in fixed-income analysis and strategies. You are most likely to be employed in a job analyzing bonds so be sure that you are familiar with measures of bond price volatility, factors which affect bond prices, valuation of bonds (especially with embedded options), yield curve strategies and institutional details of the Treasury, agency, corporate, municipal, euro, mortgage-backed and asset-backed markets.

To make it in financial planning you need to know the details of various investments, tax law, estate planning strategies and you need to be good at marketing yourself and listening to your customers.

The field of financial planning is expected to experience substantial future growth, but it's a hard field to start in because most financial planners work in entrepreneurial one or two person shops and have difficulty affording new hires. Getting that crucial starting experience is the hardest part.

According to the Consumer Federation of America there are over 250,000 financial planners. The largest company in the field is IDS Financial Services, a division of American Express.

Financial planners are increasingly called on to have the CFP (Certified Financial Planner) designation. To become a CFP, you must past an exam approved by the CFP Board of Standards which covers over 175 topics in investing and financial planning. Today, there are approximately 23,000 CFP's. For more information contact the Certified Financial Planners Board at 1660 Lincoln, Suite 3050, Denver, CO 80264 or call (303) 830-7543.

Financial planners can be compensated on a flat per-hour fee basis, a commission basis or both. The way you are paid in this business clearly affects the incentives you have with your customers.

It is hard to break into the business of money management. A good place to start is at a commercial bank in its trust department or at a state-run pension fund. Insurance companies can also be a good starting point if you are a strong student. .

Hedge funds are a growth area in money management. Hedge funds are opportunistic, private funds which invest in stocks, bonds, currencies and derivatives often using significant amounts of leverage. Hedge funds management approximately $50 billion in assets according to MAR Hedge. But because they use extensive leverage, they manage positions in excess of $250 billion.

Mutual funds are pools of financial resources managed by a professional money manager. The Investment Company Institute reports over 20 types of funds ranging from growth funds to precious metals funds. Key mutual funds activities fall into trading and order execution, investment analysis, marketing, record keeping and customer services.

Sanford Bernstein and Co. estimate that over $9 trillion is entrusted to professional money managers. The business of money management is enormous.

A new trend in money management is towards pay for performance. This means your pay will be high when times are good, but barebones in bad years.

A growth area in financial planning and money management is targeting the high net worth individual. PSI, a financial services consultant, estimate that over 4 million US households have a net worth in excess of $1 million.

Another growth area in money management is global investing. According to Pensions and Investments [1/24/94], the fraction of international investments by the Top 200 US pension funds increased by over 25 percent.

The money management business is highly profitable. Fortune in "The Investor Revolt"; [10/31/94] reported that take home profits in money management amount to approximately $3 billion a year.

There are two basic types of pension plans: defined benefit and defined contribution. Defined benefit plans guarantee workers a level of benefits whereas defined contribution plans do not guarantee a level of benefits but they do provide for fixed contributions. Roughly 80 percent of pension fund assets are in defined benefit plans.

The mutual fund business is facing hard times and ferocious competition. There are now over 6,000 mutual funds in business. However, no-load funds (which do not charge customers an up-front fee) are growing very rapidly.

Money managers aren't known for superb investing records. In the last ten years 74% of money management professionals did not beat the S&P 500 index. If you go into this business, then, it is essential to be aware of the difficulties of building a good record and beating the market