Portfolio Management Career Path

Portfolio managers can be called investment managers, financial analysts, asset managers, wealth managers, etc. And they manage an entire gamut of funds and investments like hedge funds, mutual fundsMutual FundsA mutual fund is a professionally managed investment product in which a pool of money from a group of investors is invested across assets such as equities, bonds, etcread more, pension plans, investments with private companies, etc.

Now there are two aspects of the portfolio manager career. One aspect is the selling side, and another is facilitating the right analytical part of the investment. A professional, truly a portfolio manager, would focus more on the analytical side of the investments than the selling side.

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Portfolio Manager Job Description

This section will look at the portfolio manager’s job description. These will give you a clear idea of whether this profile is right for you.

  • Purpose of Portfolio Manager Career: The actual purpose of portfolio managers is to help clients achieve their investment objectives. The primary task of a portfolio manager is to sit with her client and understand what the client needs and allocate the funds to the right investment opportunities. Portfolio managers work with both institutions and individual clients.Investment Policy Statement (IPS): This statement is quite important for portfolio managers. An investment policy statement is a document created to serve the client of the portfolio manager. This statement also acts as a document articulated by the facilitation of both the manager and the client. In this document, the goals and investment objectives of the client are mentioned. It also contains the portfolio manager’s strategy, the risk toleranceRisk ToleranceRisk tolerance is the investors’ potential and willingness to bear the uncertainties associated with their investment portfolios. It is influenced by multiple individual constraints like the investor’s age, income, investment objective, responsibilities and financial condition.read more level, liquidity requirements, how the portfolio manager will allocate the funds to various investment opportunities, etc.Technical Expertise: As you can already understand, without having a clear understanding of market conditions, it would be impossible for the portfolio manager to predict or suggest anything to her clients. If you want to be a portfolio manager, your forte should be technical knowledge and a detailed understanding of the financial marketThe Financial MarketThe term “financial market” refers to the marketplace where activities such as the creation and trading of various financial assets such as bonds, stocks, commodities, currencies, and derivatives take place. It provides a platform for sellers and buyers to interact and trade at a price determined by market forces.read more.Client Relationship: Every portfolio manager should have great interpersonal and effective communication skills. The job of a portfolio manager career demands the manager to build a cordial relationship with the client so that the client trusts the portfolio manager. If the portfolio manager can’t persuade the client to follow her recommendations, the actual purpose won’t be served.

Portfolio Manager Educational Qualification

The first step to making a portfolio manager career is to get a graduate degree in finance, economics, or business. But in the market of fierce competition, only a graduate degree won’t suffice. Every portfolio manager needs to know much more about the financial market than the company leaders to persuade them to invest in the funds that the former sees fit.

That’s why every portfolio manager should go for CFA and FRMCFA And FRM CFA (Chartered Financial Analyst) certification exam prepares you well for careers in Investment Banking, Portfolio Management, Financial Research, whereas FRM (Financial risk management) certification exam is suited for those who want to make a career in Risk management in Banks, Treasury Department or in Risk Assessments.read more certification. Both of these certifications are quite tough and need advanced expertise to clear. Plus, the portfolio managers need applicable FINRA (Financial Industry Regulatory Authority) licenses Series 7 and Series 66 under NASAA Uniform Combined State Law Examination for buying & selling securities on behalf of clients and recommending investment opportunities, respectively.

Portfolio Manager Salary

There can be a wide range of portfolio managers’ salaries. And it completely depends on the firm’s place in the market, assets under management, and the investment opportunities they’re dealing with.

Per Payscale.com, the average salary of portfolio managers is $84,054 per annum. The range of salary is $51,000 to $141,000 per annum.

The portfolio manager can also earn a bonus of up to $25,000 per annum on average.

Conclusion

To make a portfolio manager career, you need to have a knack for the financial market. After getting a graduate degree in Finance, Economics, or Business, you can go for an internship or two in a reputed firm. Then the firm may absorb you as a full-time employee. You should complete your CFA and FRMFRM CertificationFRM exam (Financial Risk Management) is a part of tests conducted by the Global Association of Risk Professionals to issue an FRM certification to the person who passes the exam recognizing candidate’s eligibility to work in an economic environment as they possess a strong knowledge and sound understanding of financial risk, analysis, and management.read more certifications while pursuing a full-time job. Doing these certifications will help you stand out among portfolio managers, and you would be able to earn a much better compensation in the market.

This has been a guide to a Portfolio Manager Career. Here we discuss the Portfolio Manager job description, required education qualifications, and average salaries of Portfolio Managers. You may also have a look at the following articles to learn more about Asset management –

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