How engaging is FP&A really?
I’ve just gotten an offer for Senior Analyst FP&A in an F500 company. I’ll mostly be in charge of analysis and projections for their opex. The offer is great in terms of compensation, benefits and WLB however I am only left wondering about how engaging the work actually is.
I come from a pure mathematics background and my hope would be to at least get to apply intricate statistical techniques to get good projections and also keep myself engaged. But how likely is this really? Is the financial modeling in this kind of role really open to this level of sophistication or will I get bored in a couple of months?
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It isn't. It's actually quite repetitive but it will develop your executive presentation skills and give you oversight over large areas of the business, so there's that.
In terms of forecasting techniques, chances are that what you have planned is overkill, but I sort of wish I'd had that toolkit for forecasting back when I did FP&A. The more precise your forecasts the better, and oftentimes it would end up either being a complete guess using historical data/simple regressions or assumptions related to things we foresee, or you got stuck with a GIGO result. I expect you'll get bored fairly quickly but you might get a kick out of challenging yourself to improve the level of precision with each subsequent forecast. But still, diminishing returns will be inevitable. It's just a role that isn't really conducive to creativity - you plan/budget, update forecasts, and investigate then craft explanations wherever you see variances or outliers. Update deck for weekly/monthly reviews. The end.
Any time you come across something highly unusual that might make for a decent story and keep you entertained or intrigued, but that's been more the exception in my experience. But I actually happen to enjoy FP&A due to the access and visibility to decisionmakers, the development of your presentation and trend analysis skills, and the knowledge you gain about multiple aspects of a company's operations. It's opened many doors for me into other areas. Best of luck!
Thank you all for your explanations. I guess I'll get ready to get paid like a doctor for essentially being an Excel monkey. I'll try to make it fun for myself though.However I do believe that this indicates this position should be a learning experience and a stepping stone for me to get relevant finance experience and in a few years find a good exit. What are some interesting paths that would follow from FP&A as a senior analyst? What are the odds of landing a more direct investment role? Would spending time getting the CFA be a worthwhile investment?
If you stay on the path and do well, and are willing to move around (both geographically and within company), you'll be part of the small talent pool from which the company draws talent for exec roles. Mostly because you'll be able to speak intelligently about strategy and operations in addition to Finance and will be well known by leadership by then. Outside companies will also poach you aggressively as you move up.
If you decide on an MBA then the standard IB/Consulting options apply. I consider an FP&A background advantageous for these roles due to the level of analysis and KPI tracking, your presentation experience, relationships w/ management, and all the ad-hoc projects you'll have been assigned. You'll be able to speak to these experiences on a value added basis (IB and Consulting are basically project management roles immediately post-MBA). It also makes for a very easy "why IB/Consulting?" story
Some operationally focused PE companies recruit FP&A professionals (typically Senior Manager - Director level within F100) to help w/ their portfolio companies (This was one of the doors opened to me). I haven't updated my Linkedin yet to reflect the result as I'm still new, but I've since moved on to my dream role.
If you're after direct investment roles the CFA would be a good signaling tool, but you'd still also have to go through the usual networking marathons, have a perfect story, and hope someone takes a flyer on you. Not impossible as I managed to successfully help someone when I was in role - but I can count on one hand the number of times I've seen it successfully done start to finish. It's far too networking dependent.
Bottom line: kill it and you will have options.
This is a great overview of FP&A. I enjoyed the two years I was in FP&A but left to explore a new career path. The things I found most fulfilling about FP&A was the exposure to executives, improving processes (startup company) and having knowledge on every function. With regards to forecasts, accuracy is not exactly what companies seek when running strat plan for the following year. It is more along the lines of "where do we want to be" next year and, depending on culture and market expectations, assume a conservative (to beat) or aggressive (to keep stock price high in near term) growth number.
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Thanks for your insight. From FP&A where did you go?
Its quite boring. Just refreshing excel templates for hours on end.
The great thing is you usually only work 40 hours a week and maybe 50 during earnings calls.
You do get close to executive management and how they think about the business.
FP&A's primary role is to make forward looking numbers whatever management wants them to be.
Can confirm this
Are most of these positions fully remote?
Wow that's awful (at least for me) better in IB than that we have 2 days WFH mandated. I would be wanting something fully remote for the most part. Is it really that hard to find without taking a major paycut?
That is brutal. I would be looking for another job immediately if I were in your shoes.
No. Look for data scientist roles. Thank me later
Any insight on career path and compensation for data scientists compared to FP&A?
I've considered this however what discourages me is that
1) Data Science is actually a code monkey job. As in implementing stuff in python 24/7.
2) The comp is very similar
Back in my uni days I did an internship as a developer because I thought I liked programming. I learned the hard reality is that no one likes programming, what you actually like is having the ideas. When I implemented my own ideas for fun, that was engaging. When I had to implement someone else's ideas it was routine and boring (and trust me, with the level of sophistication of python packages nowadays data science IS routine and boring). I would still like to one day head a tech company focused on big data/machine learning but definitely not as a developer. I would like to be in the finance/corporate strategy team calling the shots. I suppose that being a data scientist would put me on track for eventually managing data scientists but then I look at the head of my bank's data science team and he has a 100% finance background: finance undergrad -> IB -> MBA -> Head of Analytics.
I laughed because incidentally I’m currently in a similar role-Director, FBIA (Finance, Business Intelligence, and Analytics).
Similar path to the example you gave at your bank, but substitute IB with FP&A. Hopefully that gives you an idea of just how varied these outcomes can get.
If you have the background for data science, I would suggest this as well. Pay is much better and there is high demand for them at the moment.
Do you have any insight on the long-term career path in data science? I like the structured FP&A path of Analyst -> Sr. Analyst -> Manager, and so on, so is there a comparable path in data science?
Try to find strategic finance roles. They are more creative since you deal with strategy from a finance lens.
Thank you. I believe this would be my first career role. I’ll try to kill it in FP&A and then try to move to a strategic finance role. What would I need to stand out as a candidate for this kind of position?
As someone trying to make this switch now, I'll tell you that having a strong quantitative foundation is paramount.
The key with FP&A is being good at crunching the numbers, but also telling the story (I get stuck in the weeds a lot).
Usually the Director will ultimately "own" the story but the more you know the story, the more valuable you become to the Director and upper management.
Knowing the underlying operations of the company will helps in a more strategic role as you will need to asses the capabilities of your company before moving forward with any deal or initiative.
Presentation and communication skills will be important in both.
The concept of "Strategic thinking" is a bit nebulous, but think of it as the way you approach problems (not problem solving itself).
+1 totally agree here
I am trying to do this right now
finding a more quantitative role on a Corporate Strategy team is ideal but they are hard to find
One of the most important skills for a CFO is strategic thinking
@associate 1 in CB - what’s your comp? I’ve been in FP&A for a while and I haven’t seen doctor salaries for FFA roles before. You must be in the top 1% for this title.
What is strategic finance's role in shaping a strategy for a company that also has corporate strategy / growth / strategy & biz ops teams? Who really drives the strategy?
FP&A is going to be as engaging as the firm makes it. If you're at a firm that uses FP&A to explain monthly variances to budget, you're going to have a fairly predictable and mundane role. If, on the other hand, you are at a firm that not only wants FP&A to explain monthly variances to budget, but also make analyze how that affects future months, make recommendations on capital investments in areas like IT, etc., you will probably have a bit more variance to your role.
The key is looking for firms that categorize their FP&A group as "strategic finance". Try finding firms with ex-bankers, ex-PE professionals, etc. as well. If you interview somewhere and every FP&A professional is a former auditor, controller, etc., you are most likely going to spend a lot of time on reporting. Nothing wrong with that, but that tends to be why FP&A gets a "boring" rap on WSO and elsewhere.
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