Written by Amanda Newman Smith, Features Writer for Money Marketing

We all know the jobs market is tough for UK graduates. Research suggests this is steering many towards financial services.

The latest Graduate Outlook Study from CFA Institute, the global association of investment professionals, shows that nearly a third of university students and recent graduates are most confident about their career prospects in finance.

This is streets ahead of the next highest-ranked sectors, STEM and healthcare, both at 9%.

The more people learn about financial services, the more attractive it becomes

The research found that many university students and recent graduates were prioritising earning potential and stability, with financial services earmarked as a sector that could deliver both.

A robust sector

CFA Institute senior director, University Programmes, Peter Watkins says financial services is a “very prominent service sector” that graduates are increasingly aware of.

“The big boom area was tech for so long, but I think it's transparently obvious that it's swings and roundabouts the whole time in the IT sector, where there’s been a lot of boom and bust in tech bubbles,” he says.

“If that’s the comparison, although financial services has been hit by challenging economic conditions along with other sectors, it just looks more stable, I think."

We're doing a lot of work on trying to help students, in particular, get a better understanding of the variety of roles

Finance was the highest-ranked sector in the CFA’s work when graduates and university students were asked which sectors they considered stable and attractive. Salary was also found to be the number-one priority for 59% of those surveyed.

However, Watkins does not think graduates are turning their backs on things like a prospective employer’s environmental, social and governance (ESG) credentials and becoming more materialistic.

“I've been impressed with what ESG is to them; it’s been right up there and I don’t think it’s gone away,” says Watkins.

“I just think, in a time of real economic crunch, salaries inevitably creep to the fore. If you can't afford rent to live where you want to live, you're going to need a job with a high salary.”

Employers are less focused on whether somebody's had their head in Excel spreadsheets for three years at university

In Watkins’ view, starting salaries in financial services are “reasonably sound”.

He adds: “Employers select carefully, but the package on arrival tends to be pretty good and probably compares very well with fellow graduates in other sectors.”

Finding the best fit

One issue is that even those studying finance-related subjects at university are not necessarily aware of the variety of roles within the sector, such as financial adviser. This is something the CFA Institute is trying to change.

“We're doing a lot of work at the CFA Institute on trying to help students, in particular, get a better understanding of the variety of roles,” says Watkins.

It was interesting how many of them were studying finance and weren't sure what they wanted to do

“I think the more people learn about financial services, the more attractive it becomes. If you think of it as a very hard-nosed, brutal working environment that you might see in films or in TV shows, that's going to be offputting for many people – though some might find it appealing,”

Watkins thinks doing some research on “the sheer breadth of roles – from people facing to more analytical” – will help dispel the myths. Students may need to dip their toes in the water to find out which particular areas gel with them.

“We run a global finance competition for students and, talking to the finalists, it was interesting how many of them were studying finance and weren't sure what they wanted to do,” says Watkins.

The students did a deep equity analysis for the competition, looking at a particular firm in huge detail and giving a buy, sell or hold recommendation on shares.

In a time of real economic crunch, salaries inevitably creep to the fore

“They hadn't realised how interesting this could get and how much they would learn about the sector,” says Watkins. “They were saying, ‘I’ve found out what [job] I want to do by getting deeper into it.’”

A broad church

A related point Watkins makes is that the kinds of role available to graduates within the broad financial services spectrum may depend on where they live.

“My family is from Yorkshire and, if you grow up in Bradford or Halifax, your concept of financial services – a good, stable, attractive career - is probably going to be much more around building societies, mortgage advice, and somebody you know or school careers advisers talking about the local community,” he says.

“But just up the road in Leeds it's a major financial hub for the investment profession. And if you’re in the home counties - commutable to London – you probably think of the City of London when people talk about finance.”

Although financial services has been hit by challenging economic conditions along with other sectors, it just looks more stable

Regardless of whether the aim is mortgage advice or wealth management, graduates who brush up on their soft skills will have a competitive edge.

“Employers are definitely looking to recruit from diverse backgrounds and are less focused on whether somebody's had their head in Excel spreadsheets for three years at university,” says Watkins.

“Because of the impact of AI, that is likely to be less interesting than it used to be to a firm that's now looking for team players and good communicators.”