How to Become a Risk Manager

Mar 04, 2020

Research the requirements to become a risk manager. Learn about the job description and duties, and read the step-by-step process to start a career as a risk manager.

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Should I Become a Risk Manager?

Risk managers analyze and measure an organization's exposure to financial uncertainties. They identify ways to reduce and control risks, such as those caused by changes in currency or commodity prices. These professionals might work in banks and private businesses, among other settings. Long hours are often worked by these financial managers.

Career Requirements

Degree Level Bachelor's degree; master's often preferred
Degree Field Business administration, finance, accounting, or another related major
Certification and Licensure Healthcare-related positions may require healthcare risk manager licensure; voluntary certification available
Experience 5+ years of business or finance experience
Key Skills Analytical, organizational and communication skills; detail-oriented; proficiency in math, accounting; use of financial analysis and credit management, enterprise resource planning, and spreadsheet software
Salary $127,990 (2018 median annual wage for financial managers)

Sources: U.S. Bureau of Labor Statistics, Job postings from August 2015, O*Net Online.

Getting into this field requires a bachelor's degree, but some employers prefer candidates with master's degrees. Fields of study include business administration, finance, accounting or another related major. Healthcare-related positions may require healthcare risk manager licensure. Voluntary certification is available from organizations like the CFA Institute. Typically, risk managers have at least five years of business or finance experience. Key skills for risk managers are the ability to think analytically; excellent organizational and communication skills; a strong eye for detail; and proficiency in math, accounting, financial analysis and credit management software, enterprise resource planning software and spreadsheets. In 2018, financial managers earned a median annual salary of $127,990, stated the U.S. Bureau of Labor Statistics. Now let's check out the career steps for risk managers.

Career Steps

Step 1: Earn a Bachelor's Degree

The minimum requirement for becoming a risk manager is generally a bachelor's degree in a field related to finance or accounting. A 4-year degree in economics or business administration may also be suitable. Some colleges and universities offer degrees in financial services and risk management specifically geared for entrance to this career. Classes in these programs cover topics like financial markets, taxation, derivatives, risk management, portfolio management and investment analysis.

To get the most out of your education, complete an internship. Experience is essential to becoming a risk manager, so students may benefit from gaining some practical experience through internships at the undergraduate level. Along with learning from seasoned risk management professionals, interns might use these opportunities to get their foot in the door of a financial company or business.

Step 2: Consider Earning a Graduate Degree

Many employers prefer candidates who have graduate degrees in fields relevant to risk management, particularly in business administration or a similar major, like finance or economics. Some Master of Business Administration programs allow students to focus their studies specifically in risk management. Such programs might include coursework in healthcare finance, business operations, enterprise risk management and corporate finance. Students can also expect to complete capstone courses in risk management.

Step 3: Gain Relevant Experience

Employers usually seek risk managers who have at least five years of experience working in a field related to risk management. Aspiring risk managers might gain such experience by working entry-level positions in the business or finance sectors. Many start out as accountants, auditors, financial analysts or loan officers. Select companies will hire risk managers directly out of college and train them for the job, though this is less common.

It can also help your career to get certified. Certification is not mandatory for this career, but it can help risk managers demonstrate proficiency and dedication to the discipline. The CFA Institute, for example, offers the Chartered Financial Analyst credential to candidates with bachelor's degrees or four years of experience in the field (or an equivalent combination of education and experience). Candidates must also pass an exam. Other certification options include the Associate in Risk Management credential offered by the American Institute for Chartered Property Casualty Underwriters as well as the Certified Professional in Healthcare Risk Management credential offered by the American Society for Healthcare Risk Management.

Step 4: Obtain Necessary Licensure

Some risk management positions may require licensure. In some cases, employers looking for risk managers in a healthcare setting may require applicants to hold state licensure as a healthcare risk manager. In fact, some states, such as Florida, require this licensure for such positions. Depending on the state in which they live, candidates for licensure may be required to complete a training course and pass a state exam.

Step 5: Advance with Experience

After acquiring several years of experience in the business or finance industry, individuals may become eligible for risk management positions. Those who demonstrate a solid grasp of a variety of departmental operations can go on to become supervisors within their companies. Additionally, highly experienced risk managers sometimes choose to open their own consulting firms.

To recap, with an undergraduate degree and experience, along with voluntary certification and possibly licensure, risk managers can earn about $118,000 to analyze and measure organizations' exposure to financial uncertainties.

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