Strengths identified in the SWOT outline personal qualities compatible with recommended characteristics associated with successful financial risk analyst consultants:
- Adequate Distance – an expert risk analyst is able to merge disparate information, including factors that may be causing immediate conflict with a client’s strategic goals. As an external party hired to provide services and advisory, a consultant’s representation of an organization on a project can often clear the way for a company seeking investment and other contribution.
- Closer – bring the project to completion so that the client may proceed with a strategy according to schedule is fundamental to meeting practice criteria.
- Communicator – continuous and precise communications are priority for most organizations working with a financial risk analyst consultant. This is a weakness for me at present, as I have limited reporting experience.
- Confidence – to work with a number of stakeholders is an opportunity that also esteems assertiveness. The effective and efficient consultants communicate confidence so as to leverage resources and professional relations to their benefit.
- Creative thinker – seeking solutions out of the box is my specialty. Risk analysis is requires problem solving techniques.
- Cynicism – otherwise associated as reasoned duty to a client, cynicism is not necessarily a negative tool where risk is concerned. Cynics make for moderation in decision.
- Listener – consultants that are reserved in approach and good listeners are most often cited as professionals that can make a difference in an organization’s mission and bottom-line. By placing client needs first, it is also far easier to conduct sufficient analysis of assets and values that might otherwise not be made available to a consultant. If a risk analyst fails to listen well enough to a client, the consultation is likely to result in certain failure.
- Mathematical Competency – this is an obvious quality essential to professional performance on a financial risk analysis project. The right credentials verifying mathematical competency exhibit the consultant’s commitment and credibility as an analyst.
- Neutrality – the ability to discern the status of a client’s actual financial situation and the potential for investment without subjective criteria.
- Pragmatic – the ‘buy-in’ that best practices and knowledge sharing guide ethical conduct, standards in instrumentation of modeling and in reporting allows for update to current practice and reinforces confidence of clients as co-decision makers in the risk reporting process.
- Proficient – precise and practiced, the risk analyst must perform consistently and with skill.
- Team Player – a consultant is not an island unto themselves. This is the area in which I must develop further skill. Communication is connected to this quality and will serve in leveraging contracts and creating client confidence and market reputation.
Understanding and managing my own exposure to risk as a consultant is essential to professional success as a financial risk analyst (KPMB, 2013). Legal liabilities posing clients risk are a serious concern. Financial risk analysts offer advisory on liquidity and real property assets in the course of recommendation on capital and other finance projects.
Clients affected by losses to property or as the result of other liabilities to an organization are high risk to consultants in joint and several liability tort lawsuits. In order to ensure protection from client and third party liabilities, contract agreements must provide full disclosure of consultant immunities from any sort of obligation to a client’s portfolio and assets.
Informed consent on projects by clients at time of contract establishes the basis to mutual assent and terms and conditions to performance on agreement. The obligation of a consultant to duty to a reasonable professional standard of care should be articulated prior to commencement of performance. Such a threat places a consultant in a position of weakness where not adequately accounted for in writing.
The “ability to communicate complex actuarial and risk management concepts in a clear, concise, and understandable fashion” is part of the obligation of forewarning in contract with a client (KPMG, 2013).All business transactions pose risk. Acquisition, market entry and capital campaigns are high risk ventures that require the expert and informed guidance of a financial risk analyst.
A consultant reduces the internal risk of liability to a corporate, as those services are in effect rendered as part of a trade agreement and not direct liability ascribed to the entity as a legal party. Insurance offers a mechanism for controlling risk transfer. Risk transfer mechanisms are not only advisable to clients, but a source of protection for consultants providing risk analysis as well. In this manner the threat of risk to clients is reduced, and consultant exposure to any future loss is fully covered by indemnity.
- Are you ready to be a consultant?
Preparation for a career as a financial risk analyst consultant is normally prefaced by an education in “in auditing, accounting, compliance and finance” (Codija, M. (nd.). Most risk consultants hold a Bachelor’s or Master’s degree, and preferably a MBA. Professional interest in financial risk analysis is primarily based on the freedom to expand my opportunities through partnership with growth organizations.
Risk management is a field at the forefront of change. If change organizations are keenly focused on acquisition and market entry, capital projects are a key source of liquidity to realize those objectives. Financial risk analysis is a growth segment of the labor market (Codija, M. (nd.).
The rise of the consultant as solution is in measure to the exceeding demand of the labor market. This circumstance has opened the door for financial risk analysts to work as entrepreneurs rather than employees. Legal liability is another important reason corporations hire financial risk analyst consultants to conduct review on the viability of a strategy, an organization’s solvency and market potential of a venture.
The possibilities for success as a consultant in the field of finance is exceptional I would argue. Businesses seeking competitive advantage look to financial consultants to bridge the gap between core investment advisory and operational allocations. The initial job of a financial risk analyst is to conduct capital structure analysis on a client organization.
Additional risk analyses on a client’s portfolio of investments and future market prospectus follow. Training in financial risk analysis (i.e. actuarial analysis, financial modelling, environmental risk assessment) is an objective for the near future. With sufficient education at the MBA level, I will be able to provide consultancy to firms on their capital projects.
Foreign market entry creates another area of financial risk for businesses interested in advancing profitability. Consultancy on market entry investment and in coordination with client’s and their third party financial service providers will enable me to advance my professional interests by providing audit, reporting and advisory on strategic financial planning.
At times, financial risk analyst consultants are hired on temporary contract designated for specific purposes. Prospective contract as a financial risk analyst consultant requires a quantitative background (Codija, M. (nd.). The best qualified consultants offer clients experience that can be modeled. Replicable models of evidence based practice illustrate proven methods of analysis, performance and results. Applied statistics and operations assessment as part of the risk analysis equation allow consultants to attribute value added services, recognized as industry standard.
Risk analysts apply higher algebra or calculus in computation of financial formulae. This constitutes financial analysis risk analysis activity, along with reporting and advisory. Lessons learned from the field of risk analysis support evidence based practice standards in professional consultancy, and serve as a field of knowledge sharing for analysts.
The study of Bayesian statistics techniques is particularly important to determine factors in risk analysis. Monte Carlo casino risk analyses exhibit the type of probability modeling used in calculation of standard deviation of risk errors in relation to mean average performance. At present, I am perfecting my skill in the area of statistics in preparation for professional practice.
Contract law knowledge is the other main requirement for expert service provision of financial risk analysis consultancy. Although I do not plan to train to become an attorney in my pursuit, investigation into top financial risk analyst consultants persistently reveals both MBA and LLM or Executive JD training. Legal training may take the form of business law courses within a MBA program, or may include external certification or degree training in a separate program.
Example of the Business Consultant Agreement used in consultancy of client firms (Sample, nd.):
“This Business Consultant Agreement is made and effective September 1, 2013
BETWEEN: Name an individual with his main address located at or a company Organized and existing under the laws of My County of State with its main address located at:
AND: Global Finance, a company organized and existing under the laws of County of State with its head office located at:
- CONSULTATION SERVICES
Global Finance hereby employs Name to perform the following services in accordance with the terms and conditions set forth in this agreement. Name will consult with the officers and employees of Global Finance concerning matters relating to the management and organization of Global Finance, their financial policies, the terms and conditions of employment, and generally any matter arising out of the business affairs of the company.
- TERMS OF AGREEMENT
This agreement will begin September 1, 2013, and will end October 1, 2013. Either party may cancel this agreement on 14 days’ notice to the other party in writing, by certified mail or personal delivery.
- TIME DEVOTED BY CONSULTANT
It is anticipated Name will spend approximately (160 HOURS) in fulfilling its obligations under this contract. The particular amount of time may vary from day to day or week to week. However, the consultant shall devote a minimum of (90 HOURS) per month to its duties in accordance with this agreement.
- PLACE WHERE SERVICES WIL BE RENDERED
- PAYMENT TO CONSULTANT
The consultant will be paid at the rate of $500.00 per hour for work performed in accordance with this agreement. However, the consultant will be paid at least $15,000.00 per month regardless of the amount of time spent in accordance with this agreement. The consultant will submit an itemized statement setting for the time spent and services rendered, and Global Finance will pay the consultant the amounts due as indicated by statement submitted by the consultant within 14 days of receipt.
- INDEPENDENT CONTRACTOR
Both Global Finance and Name agree that the consultant will act as an independent contractor in the performance of its duties under this contract. Accordingly, the consultant shall by responsible for payment of all taxes including Federal, State and local taxes arising out of the consultant’s activities in accordance with this contract including by way of illustration but not limitation, Federal and State income tax, Social Security tax, Unemployment Insurance taxes, and any other taxes or business license fee as required.
- CONFIDENTIAL INFORMATION
The consultant agrees that any information received by the consultant during any furtherance of the consultant’s obligations in accordance with this contract, which concerns the personal financial or the affairs of the company will be treated by the consultant in full confidence and will not be revealed to any other persons, firms or organizations.
- EMPLOYMENT OF OTHERS
Global Finance may from time to time request that the consultant arrange for the services of others. All costs to the consultant for those services will be paid by Global Finance but in no event shall the consultant employ others without the prior authorization of the company.
Codija, M. (nd.). Job Description of a Risk Consultant. Ehow. Retrieved from: http://www.ehow.com/about_6685425_job-description-risk-consultant.html
Feig, N. (2007). The Rise of the Business Analyst. Bank Systems & Technology, 44(1), 34-37.
KPMG (2013). Retrieved from: http://www.kpmg.com
Vose, D. (2007). What makes a good risk analyst or team. Vose Software. Retrieved from: http://www.vosesoftware.com/ModelRiskHelp/index.htm#Risk_Management/What_makes_a_good_risk_analyst_or_team.htm