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Risk Manager

Risk Managers identify and reduce financial risks for their clients or their employers. This is a position that can be found throughout the financial services industry, in banks, investment dealers, investment fund companies and insurance companies. You'll also find risk managers working within corporations, governments or any organization exposed to financial risk through their treasury or investments. Some even work for specialized risk management firms that consult and provide services to other organizations.

While there are many different types of risk management jobs, the fundamental task of a Risk Manager is to monitor, identify, measure and then take steps to modify or mitigate risk. This requires a good understanding of quantitative techniques, financial and/or commodity markets and derivative products that are often used as risk management tools.

A Risk Management job varies with the nature and scale of responsibilities:

  • A trader may manage risk associated with an investment dealer's fixed-income investments.
  • A portfolio manager uses strategies to hedge investments against market risk.
  • A corporate treasurer finds techniques to minimize credit risk.
  • In a firm's compliance department, a Risk Manager takes a firm-wide approach to evaluate business processes and analyze operational risk.
  • Specialized Risk Managers may be financial engineers who design and build complex structured risk management products for clients to help them mitigate their interest rate, foreign exchange, equity, credit or general market risk.

You need a strong mathematics background to become a Risk Manager, preferably supported by a related university degree. There are a number of additional routes to obtain training in risk assessment, derivative markets and products. One is through CSI courses, including Derivatives Fundamentals, Financial Risk Management and Energy Risk Management courses. More specialized training, particularly in the area of measuring risk, can be obtained through the Professional Risk Managers' International Association.

The salary range for risk managers varies depending on the position and years of experience. Entry-level risk management salaries are around $50,000. Senior risk managers can earn $150,000 or more, plus a bonus.