2 answers

What is the difference between consulting and finance?

Asked Cambridge, Massachusetts

The two both seem popular and I know they're both taught at the business school. #business #consulting #finance

2 answers

Samantha’s Answer

Updated Raleigh, North Carolina
Hi Danilo! Great question! I would say that there's definitely some overlap between the 2, but they're also a bit different. Consulting is when an expert in a field (could be finance or any other field) comes to an organization and uses his/her expertise to help that organization solve a particular problem. For example, a finance consultant might help with ways to better forecast revenue or estimate costs, or an HR consultant might help a business's HR department develop and implement a new hiring policy. So, if you work as a consultant, it might be in finance or it might be in a different field. Similarly, you can work in finance as a consultant, or in an internal position within an organization. Whereas with consulting you are employed by a consulting firm and visit different clients, with an internal finance position, you are employed by 1 company and you work in their finance department, helping the business make appropriate financial decisions to maximize profits and minimize risks. There are also other options within the finance field, such as personal finance, where you help individuals invest their money; or public finance, where you help governments or schools manage their money and investments. Best of luck in your career!

Colin’s Answer

Updated
Hi Danilo, good question. My colleague, Samantha, did a great job of answering this question above...especially from a consultant's perspective. I have worked in both finance and consulting and agree with her that there is a significant amount of overlap in the day to to day work. Many of the skills you need in finance (being comfortable with numbers, communicating difficult concepts, and being adept at dealing with clients) are also very important in consulting. Let me focus my answer a bit more on finance though as Samantha has already covered the consulting side. Finance is a VERY broad term and it can mean a number of things. Many people think of "finance" as jobs at investment banks or asset managers where money is ultimately being invested into assets (stocks, bonds, private companies, etc) with the hope of a financial return being made on those investments. The financial system was built to provide economic participants (think of the companies you buy goods from each day) with the money they need to continue doing business and growing every day. As you can imagine, it takes a lot of people with different job functions to make this all work...and these roles go beyond just investment banking or working for investment managers. Business schools teach you the fundamentals of how this economic system works and gives you the foundational finance education you would need to be part of this system in one way or another.