thick skin essential in financial modelling
Nkanyezi Ngobese is a financial modeller at Consilium Securities in Johannesburg and has this to say about life in the world of stocks and financial markets
What does a day in the life of a financial modeller entail?
First thing in the morning I drink coffee. Seriously, one cup of coffee before I start the day otherwise I don't function.
My core responsibility is to create and modify valuation and financial models for a stockbroking firm. The models vary from general models that indicate what shares or derivatives we can buy or sell on a daily basis to specific ones that are company or situation specific. On any day I can be asked to create or improve on any of the existing ones. Models are mostly based on spreadsheets and related platforms so at times one needs to troubleshoot when there are problems.
Why did you decide on this career?
What I do fell in my lap. At university I did financial mathematics, statistics and investments. I started my career with an asset management company and then moved to a securities company as a stockbroker. What I do now is a combination of what I studied and where I ended up working.
What is most challenging about the job?
What is most challenging is that one should be an all-rounder. You should understand investments and financial analysis and also understand modelling.
On financial analysis one needs to understand financial statements and stock valuation fundamentals. On modelling you have to be good in programming or at least be very fluent with spreadsheets.
What do you enjoy the most about it?
Financial modelling, specifically within the banking, financial and investments sector, is very dynamic, no day is similar to the next. I enjoy the creative aspect of my job.
What type of person will make it in this industry? Characteristics and personality
Primarily you will need to be dedicated. You will need to be creative. The end user can only tell you what they would like or need to see. You need to figure out from the resources and data you have how you bring that about. A thick skin is essential. You are only responsible for a middle process and any mistake in the model will be attributable to you.
What subjects do you need to pass in high school to be able to study towards this career?
For matric, science subjects and maths are essential.
What does one study at tertiary level to be able to get into this career?
The best approach is to do a combination of mathematical and financial subjects. Geniuses can apply for actuarial subjects. The rest of us can do mathematics, applied mathematics, statistics and investments analysis courses.
A lot of universities offer degrees in Business Sciences or Economic Sciences where you can do a combination of these subjects. Another approach would be to do Computer Science where you learn programming and then financial analysis at a postgraduate level.
A postgraduate degree will give you an advantage as you can then supplement for courses you could not take at varsity. One can do, for instance, a chartered financial analyst qualification if they feel that their programming and IT skills are strong, but financial analysis skills are weak.
What growth prospects are there for this career?
There is a huge scope for financial modelling. The skills that one acquires transcend industries. It is not only limited to the financial sector.
Whatever industry needs financial planning or risk management can employ a financial modeller.