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Financial Risk Specialist

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AVG. SALARY

$73,480

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EDUCATION

Bachelor's degree

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JOB OUTLOOK

Stable

What They Do

Insider Info

Risk managers balance worst-case scenarios against the risks involved in doing a job and doing business. Their insurance planning, environmental assessing and safety monitoring efforts protect companies and governments against lawsuits and other financial losses.

A risk manager's role cuts across almost every discipline that involves some kind of risk. This jack of all risky trades has knowledge of areas like health and safety, insurance and disaster recovery. They may also know about security, commercial law, ergonomics, internal affairs and other sources of business risk.

James Coyle is the director of the Public Risk Management Association (PRIMA). "It's an extremely comprehensive position," he says.

"If you're the risk manager in a community, you work with every other person in that community, from the bottom to the top, to establish exactly what their risks are. You want to define them very clearly so you can purchase the right insurance to cover them and put in the right training and education programs to prevent them."

It's a risk manager's job to protect a government or company's assets -- meaning employees, property or money -- from any kind of loss. Losses could be in the form of injury to a worker. It could be financial mismanagement or bad investments. It could also be property loss due to theft or natural disaster.

Risk managers ensure protection of assets through a number of ways. First, they buy the right insurance. That way, if there is a loss, whether through workers' compensation claims or civil lawsuits, they make sure their organization is well covered.

They also carry out a lot of prevention litigation (defending against unreasonable claims) and other preventative approaches to try to keep most losses to a minimum.

"You have to follow the wording of your company's insurance policy as you go out and investigate to see what's happened," says Silvana Facciolo. She works with risk managers on insurance claims.

"Depending on what the cause of loss is, you go through your wording and make sure there's coverage afforded for whatever caused the loss," she says. "Sometimes it's a gray area -- the insured might think they were covered for something they're not. You have to read it, analyze the situation and tell them so."

Dealing with insurance claims remains the biggest part of a risk manager's day. But the field is starting to deal more in other areas of loss. The hot trend in this profession is financial risk management. That's advising a company to be careful about its cash grabs.

"It's huge. And it's certainly the future of risk management," says John Shortreed. He is the director of the Institute for Risk Research.

"Financial institutions have found there's a big payoff in managing their risks right. These risk managers balance benefits against risks like interest rate and currency fluctuations, bad loans and the probability of being left in the dust by your competitors. They analyze and monitor any risk that can make your business go broke."

Another growing issue facing risk managers today is environmental risk. As society pays more attention to the environmental effects of doing business, risk managers have their work cut out for them.

"Ten years ago, we didn't talk a lot about environmental risk management," says Coyle. "Today, it's become a major risk management issue because there's more and more contentious issues in communities about industrial development and watersheds, water quality and air pollution."

There are important differences between the work risk managers do in the public and private sectors. The split is even reflected in the mandates of their professional associations.

PRIMA represents public risk managers. The Risk and Insurance Management Society speaks for those in the corporate world. Coyle says risk managers working for the government deal with a wider scope of situations than their private counterparts.

"The responsibility is broader because risk cuts across any service or issue that a state or local government might have to deal with, as opposed to a private company who might make a single product," he says.

Risk management is generally a 9-to-5 desk job and could easily include people with special needs in its ranks. Very little travel is involved, as risk managers tend to stay close to the companies and communities they work for. Depending on how much safety monitoring is involved in a job, physical requirements are minimal.

"If you're doing some safety inspections, you might have to be crawling around on ladders and getting up on roofs, but that's rare," says Ruth Unks. She is the risk manager for the Maricopa County Community College District in Phoenix, Arizona. "Someone with physical disabilities could definitely do the job. I know of a colleague in a wheelchair who's worked as a risk manager for 15 years."

For those more involved in the technical analysis of risks, the work may take them away from an office environment and into more fieldwork. This is especially true for environmental risk managers and those working in a public community.

"It's mostly analysis-based desk work, but certainly if you're working with auto safety, there's a lot of field and laboratory work. And especially in your assessment of environmental pollution or water quality, there could be a lot of lab work...there as well," says Shortreed.

"It's a lot of desk work, but it's also dealing with the various departments of the community," says Coyle. "You could go out to work with the police department on their safety issues. You might go to the sewage treatment or water treatment plant to identify workers or financial or property issues that they have to be concerned with.

"Or with the planning and development community -- you'd be out talking to them about environmental risks that might be inherent in their development plans."

Just the Facts

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At a Glance

Protect companies from lawsuits and other setbacks

  • Financial risk management is the hot trend in this field
  • The work you do varies depending on whether you're in the public or private sector
  • Certification is available, but not mandatory