Risk Management Degree

By Henry R. Steele - May 2, 2017
Reading Time: 7 minutes

Life is filled with risks, and that is something that society as a whole has to accept. In fact, we all have to be willing to take risks if we want to develop and grow. This is true everywhere, from infrastructure to energy, from airport security to supply chain, and from housing to hospitals. The world is incredibly fast-paced, and this also affects the risks that society faces. Risk management is about minimizing threats, while maximizing potential at the same time.

A risk manager analyzes, understands, and address risks so that the organization is able to reach its objectives in spite of the various hurdles that it has to face. This means that risk managers have to do their work in a manner that is proportionate to the type and complexity of the company that they work for. They do this in an integrated manner, working with all elements of the organization itself and the external networks at the same time. This is a hugely diverse field of work, which is why risk managers can be found everywhere, from financial services to planning, from engineering to corporate governance, from health and safety to business continuity, and from education to insurance.

Opportunity

According to the U.S. Bureau of Labor Statistics (BLS), risk managers are classed as financial managers. As of May 2016, there were 555,900 financial managers employed across the country, earning an average of $121,750 per year at the bachelor’s degree level. The BLS has also reported that there will be a 7% growth in demand for these professionals from 2014 to 2024, which is as fast as the national average. This will translate into some 37,700 new jobs.

That said, the BLS has reported that there will be significant variations in demand, depending on the industry in which they are found. Because the economy is growing, but people are still very fearful of a second recession, the demand for risk managers in financial and insurance services is likely to continue to be very strong. Additionally, because businesses are becoming increasingly global, new risks have started to develop, which is also leading to new demand for risk managers who have an excellent international perspective.

At the same time, the BLS warns of intensive competition for jobs, as there continue to be more applicants than available positions. They recommend, therefore, that people aim to achieve a master’s degree, as well as various certifications that prove they have an enhanced understanding of complex financial documents, international factors in finance, and risk.

Career Paths

The BLS has stated that the most common industries for financial managers to work, and their average annual salaries, are:

  • Professional, scientific, and technical services, with average annual earnings of $142,300. 11% of all financial managers work in this industry.
  • Management of companies and enterprises, with average annual earnings of $140,650. 12% of all financial managers work in this industry.
  • Manufacturing, with average annual earnings of $121,270. 8% of all financial managers work in this industry.
  • Finance and insurance, with average annual earnings of $117,870. 29% of all financial managers work in this industry.
  • Government, with average annual earnings of $109,230. 8% of all financial managers work in this industry.

According to a report by Salary.com, risk managers can expect to earn an average annual salary of $106,426, ranging between $92,284 and $122,498.

Meanwhile, Indeed.com has reported on a number of popular job titles for risk managers, which are:

  • Security Supervisor
  • Operations Manager
  • Credit Risk Manager
  • Manager, Risk Investigations
  • Risk Management Specialist
  • Senior Risk Manager
  • Director, Enterprise Risk Management

Career Paths by Job Title

Salaries

The BLS has reported that the average annual earnings for all financial managers stood at $121,750 as per May 2016. They have also stated that the bottom 10% earned $65,000 or less, while the top 10% earned $208,000 or more.

Geographical location is a key factor in terms of how much risk managers can earn. That being said, it is important to understand that areas with higher salaries also often have a higher cost of living.

The BLS has reported on the top five states to work in as a financial manager. These are:

  • New York, with an average annual salary of $193,470.
  • Delaware, with an average annual salary of $167,750.
  • New Jersey, with an average annual salary of $165,560.
  • Colorado, with an average annual salary of $159,070.
  • District of Columbia, with an average annual salary of $157,530.

Employers

Of greater importance than geographical location when predicting the salary, is the company that someone works for.

A report by Indeed.com has shown some of the most popular employers for risk managers, and their associated salaries. According to this report, those working for:

  • eBay Inc. can expect to earn $142,973 per year.
  • IBM can expect to earn $132,952 per year.
  • PwC can expect to earn $137,781 per year.
  • Deloitte can expect to earn $130,448 per year.
  • Sapient can expect to earn $133,294 per year.
  • HSBC can expect to earn $132,704 per year.
  • AXA Equitable Life Insurance can expect to earn $119,059 per year.
  • Deutsche Bank can expect to earn $97,429 per year.
  • PayPal can expect to earn $119,603 per year.
  • Federal Deposit Insurance Corporation can expect to earn $109,366 per year.

Bachelor’s Degree

Most people already know that in order to gain a lucrative career, you will need to get a good education. In the field or risk management, this starts with a bachelor’s degree. Fortunately, many schools now offer their degree programs online, making it much more convenient and easier to get the education that you require. One example of a bachelor’s degree in risk management is offered by Franklin University.

The curriculum of this degree, which is offered online, includes:

  • English Composition
  • Mathematics
  • Sciences
  • Social and Behavioral Sciences
  • Arts and Humanities
  • Introduction to Spreadsheets
  • Introduction to Databases
  • Learning Strategies
  • Speech Communication
  • Financial Accounting
  • Managerial Accounting
  • Business Law
  • Introduction to Microeconomics
  • Principles of Finance
  • Principles of Management
  • Marketing
  • Principles of Risk Management & Insurance
  • Property and Casualty Insurance
  • Individual & Group Life & Health Insurance
  • Employee Benefits & Retirement Planning
  • Insurance Company Operations
  • Risk Management & Insurance Capstone
  • Fraud Examination
  • Interviewing Techniques for Fraud Investigations
  • Legal Elements of Fraud
  • Corporate Government & Internal Control Assessment
  • Intermediate Microeconomics
  • Intermediate Macroeconomics
  • Forecasting
  • Foundations of Entrepreneurship
  • Advanced Financial Management
  • Investments
  • Global Finance
  • Principles of Financial Planning
  • Tax Planning
  • Risk Management & Insurance Planning
  • Estate Planning
  • RMI Internship

Master’s Degree

To really advance your career, you should consider completing a master’s or MBA degree. This will give you the opportunity to gain advanced skills and knowledge in your field, and set yourself apart from the rest of the crowd. And just like with the bachelor’s degree programs, many master’s degrees are now also offered online, which makes it easier than ever to complete a degree without having to completely stop working.

An excellent example of such a degree is offered by Columbia University, School of Professional Studies, who have developed the Enterprise Risk Management Master of Science. The curriculum includes the following core courses:

  • Traditional Risk and ERM Practices
  • Value-Based Enterprise Risk Management
  • Introduction to Finance
  • External Stakeholder Requirements
  • Strategic Communications for Risk Professionals
  • Managing Human Behavior in the Organizational
  • Capstone

Students of the MS Enterprise Risk Management should choose two from the following:

  • Operational Risk Management
  • Strategic Risk Management
  • Insurance Risk Management
  • Financial Risk Management

Electives can be chosen from the following:

  • Systemic Risk
  • Company Failures
  • Information Technology Risk Management
  • ERM Modeling
  • Bayesian Data Analysis
  • Enterprise Information Security: Threats and Defense
  • ERM Internship
  • Organizational Strategy and Learning
  • Financial Accounting
  • Data Visualization and Design

Admission Requirements

Each school can specify its own admission requirements. However, they are usually quite similar across the board due to the fact that these requirements are designed to demonstrate whether or not the applicant has the academic capacity to complete a program at graduate degree level. The admissions requirements for Columbia University School of Professional Studies are:

  • A bachelor’s degree from an accredited institution
  • All official transcripts
  • A resume
  • Two letters of recommendation
  • A statement of academic purpose
  • An interview
  • GMAT/GRE
  • TOEFL/IELTS for non-native English speakers

Curriculum

Schools are allowed to set the components of their curriculum as they see fit. This is why it is very important to study with an accredited university, as this assures prospective employers that your degree included courses that meet the minimum requirements for the profession.

For instance, the curriculum for the Enterprise Risk Management Master of Science offered by Columbia University School of Professional Studies includes:

  • Value-Based Enterprise Risk Management
  • Traditional Risk and ERM Practices
  • External Stakeholder Requirements
  • Introduction to Finance
  • Managing Human Behavior in the Organization
  • Strategic Communications for Risk Professionals
  • Capstone
  • Strategic Risk Management
  • Operational Risk Management
  • Financial Risk Management
  • Insurance Risk Management
  • Company Failures
  • Systemic Risk
  • ERM Modeling
  • Information Technology Risk Management
  • Enterprise Information Security: Threats & Defense
  • Bayesian Data Analysis
  • ERM Internship
  • Financial Accounting
  • Organizational Strategy and Learning
  • Data Visualization & Design

Financial Assistance

Obtaining a good higher education, particularly the master’s degree, is very expensive. This will require substantial investments in terms of both time and money. Fortunately, the university or college will be able to signpost you to financial aid, and they may also have scholarships and grants available that you can apply for. At the same time, there are a number of external scholarships that you may want to consider. These include the:

  • Deloitte Graduate Entrance Scholarship
  • Cass Business School Scholarship
  • Disaster Risk Management and Climate Change Adaptation
  • Commonwealth Distance Learning Scholarships 2017
  • Griffith Foundation Risk Management and Insurance Scholarships
  • Spencer Educational Foundation Risk Management And Insurance Scholarship
  • Insurance and Risk Management Scholars Application
  • PACIF Scholarships
  • Prizes, Awards, and Scholarships for Actuarial Students at Wharton University
  • ISACA SA Scholarship

Generally speaking, it should be noted that applying for a scholarship means that you have to meet certain requirements. These include studying at a certain school, taking on a certain concentration, aiming to work in a certain field, demonstrating financial need, holding a minimum GPA, belonging to a certain minority group, being a member of a professional organization, or being of a certain gender.

Certifications

It is not actually required to become certified in the field of risk management, but this is recommended. Through certification, you demonstrate that you are committed to your own professional development, and to the advancement of the field in general. Nevertheless, getting a certification does require a further investment of time and money, and you often have to maintain certification through continuous education credits. However, this is a very worthy investment, as it opens new career opportunities for those who are certified. Some certifications that you may want to consider in the field of risk management are the:

  • Chartered Enterprise Risk Analyst (CERA)
  • Certified Risk Manager (CRM)
  • Financial Risk Manager (FRM)
  • Professional Risk Manager (PRM)
  • Risk and Insurance Management Society Fellow (RIMS Fellow)

Associations

It is recommended that you become a member of certain professional organizations as soon as you decide to study towards a risk management degree, even at the bachelor’s degree level. This is because professional associations and organizations often offer scholarships and grants, you will always be at the forefront of new developments within your field, you may be able to complete certifications and continuous education credits, you can build a professional network that will help you in your career.

Some of the associations in the field of risk management you may want to consider becoming a member of are the:

  • Institute of Risk Management (IRM)
  • Professional Risk Managers’ International Association (PRMIA)
  • Risk Management Society (RIMS)
  • Global Association of Risk Professionals (GARP)

References

Henry R. Steele
Henry R. Steele
Managing Editor
Henry is Managing Editor of BusinessStudent.com. He is a seasoned business professional who regularly consults with local business's throughout Southern California. Henry pursued his undergrad in Business and Economics at the University of San Diego and gained valuable life changing experience through a unique internship upon graduation.Follow on Twitter.com

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