Investment management entails building, monitoring, and optimizing financial portfolios for clients. The job can be quite rewarding: According to the US Bureau of Labor Statistics, top financial managers earn more than 4.5 times the median annual salary for all professions. But why investment management?
If you want to help people earn money through investments, business acquisitions, or risk analysis, you should consider a career in investment management. A career in investment management will provide you with numerous opportunities; unlike what you may see in movies, job opportunities do not consist solely of high-pressure trading rooms and pin-striped suits.
In this article, we will be looking at some of the reasons why investment management is a good choice for you. So read on!
What Is Investment Management?
Investment management is the management of financial assets and other investments, not just the purchase and sale of them. Creating a short- or long-term strategy for acquiring and disposing of portfolio holdings is part of management. Banking, budgeting, and tax services and duties can also be included.
The term most commonly refers to managing and trading the holdings in an investment portfolio to achieve a specific investment goal. Other terms for investment management include money management, portfolio management, and wealth management.
Who Is An Investment Manager?
An investment manager is a person or organization who makes investment decisions about securities portfolios on behalf of clients based on the investment objectives and parameters established by the client.
An investment manager may be in charge of all aspects of client portfolio management, including day-to-day buying and selling of securities, portfolio monitoring, transaction settlement, performance measurement, and regulatory and client reporting.
Investment managers can range in size from one- or two-person offices to large multidisciplinary firms with offices throughout the world. Fees charged by investment managers to clients are typically based on a percentage of client assets under management.
Reasons Why Investment Management Is For You
There are numerous reasons why you might want to pursue a career in investment management. Some of the most significant advantages of working in investment management include:
1. An investment management career is appealing.
Investment managers work with various investors to advise them on how to invest their money. As a result, you will have the opportunity to work with a variety of people and businesses, as well as meet new people and businesses. As an investment manager, you investigate investment opportunities and match them to clients.
To maximize revenue for your clients, you will need to conduct research and develop new investment strategies. You will also not be bored because you must keep up with changing investment markets and the effects of global events, such as weather changes, on investments.
2. The investment sector is expanding.
The financial industry is expanding as a result of an increase in financial products and services. As a result, there will be greater demand for investment managers and more job opportunities in the coming decades.
As a result, you have a better job outlook than in other professions. However, because of your high completion and proper education, you should be able to get a good entry-level position.
3. Investment management gives you the freedom to be creative and innovative.
There is a widespread misconception that investment management entails constantly crunching numbers. However, as an investment manager, you will focus on investment portfolios rather than numbers. You will manage a variety of portfolios that are tailored to the client’s needs, goals, and level of risk tolerance.
As a result, you must be creative and innovative to provide personalized solutions to each client. If you choose investment management as a career, you will be challenged to think creatively to find the best solutions for your clients.
4. Investment management jobs are well-paying.
When compared to other positions in the finance industry, positions in investment management pay some of the highest. Furthermore, if you are talented, hardworking, and ambitious, you have the potential to rapidly increase your salary. For example, Glassdoor estimates that investment managers earn between $70,000 and $200,000.
5. There is no need for you to spend more years in school.
A bachelor of science degree in a business-related field, such as business administration or finance, is one advantage of pursuing a career in investment management. Earning an additional certification or charter is an excellent way to supplement your degree without going to graduate school.
You can obtain a charter as a chartered alternative investment analyst (CAIA), a financial risk manager (FRM), or a Chartered Financial Analyst (CFA).
With a CFA, you will concentrate on financial markets, business analysis, and investment advice for companies and individuals. To earn money, CFA charter holders trade securities and manage funds on behalf of their clients. As a result, earning a CFA will help you advance your career as an investment analyst, fund manager, portfolio manager, or financial advisor.
How To Become An Investment Manager
To become an Investment Manager, candidates must first complete the following steps:
After completing the 12th grade, preferably in Commerce or a related field, the candidate must pursue a bachelor’s degree in that field or a related field. Aspiring Investment Managers can also enroll in Diploma in Investment Management and Diploma in Investment Analysis and Portfolio Management.
After obtaining a bachelor’s degree or diploma in the relevant field, an aspiring candidate can work as a Trainee Investment Manager in any management firm or pursue a master’s degree such as M.B.A. (Investment Management); although a master’s degree is not required, it can help one advance in this competitive career.
To gain admission to an MBA program at a reputable management institute such as IIMs, a candidate may need to pass an entrance exam such as the CAT.
What Kinds Of Jobs Are There In Investment Management?
The Insight Investment team is a high-performing and engaging group of individuals working at various levels of responsibility. Lawyers, IT specialists, marketers, and those who build client relationships are all examples of roles in Investment Management.
Analysts and Investment Managers are two of the more specialized investment-focused roles within investment management.
Analysts: An Analyst’s job entails analyzing stocks, forming an opinion about their prospects, and disseminating this information to the team for discussion. Meeting with company management to analyze and assess economic data and market trends, as well as conducting extensive market research, may be required.
Investment Managers: Investment Managers are primarily in charge of investing their client’s money in a stock portfolio. They rely heavily on the in-depth research conducted by analysts to inform how they will invest. They are also in charge of deciding how the fund will be built, taking into account the big picture and issues that affect overall asset allocation.
Tips For A Career In Investment Management Career
If you want to work in investment management, keep the following tips in mind to improve your performance and your career prospects:
Follow your Passion.
Because investment management offers such a wide range of career opportunities, it can be advantageous to pursue the career path in which you are most interested.
When you work as an investment manager in a field you enjoy, it is easier to stay motivated to do the work necessary to maximize results for your clients. You can better prepare for career success by carefully selecting your investment management area of expertise.
Observe the Trends.
As an investment manager, you must be aware of industry trends. Although there are advantages to attempting to identify the next trend first, once an established method of consistent growth is known within the industry, it is advantageous to consider incorporating it into the portfolios you manage.
You can improve your ability to learn about investment trends and opportunities by following industry publications and joining associations.
Always Strive to Learn New Things.
Because the investment market is constantly changing, it is critical for an investment manager to constantly learn. Keeping up with investment methods and opportunities allows you to provide the best service possible to your clients.
Continuing education ensures that you learn about new investment approaches as they become popular, allowing you to maximize the profitability potential of your accounts.
Make Powerful Connections.
Professional relationships in the investment industry benefit both parties. By establishing contacts with other investment managers, they will be able to alert you to successful opportunities and strategies, and you will be able to do the same for them.
This enables both of you to provide better service to your clients while also improving your overall career prospects.
What Do Investment Management Jobs Pay?
According to salary.com, the average salary for an investment manager is $132,029. Under normal circumstances, the salary range will be between $90,000 and $152,000. They may be compensated as a percentage of the assets they manage or on an hourly basis.
Depending on how the pay structure is set up, they can sometimes earn additional compensation when their portfolios outperform. High-performing employees can earn up to $170,000 per year.
Financial managers are in high demand, according to the US Bureau of Labor Statistics, and employment is expected to grow by 15% by 2029. This is significantly higher than the national average of 4% job growth. The salary will be determined by a variety of factors, including:
What Skills Are Required Of An Investment Manager?
In a role where you are responsible for advising clients on how to invest their money, you must have a diverse set of skills. Among them are:
- The ability to build rapport and trust with clients
- Numeracy skills are required to comprehend financial data.
- Analytical ability to make sense of a wide range of investment-related data
- Ability to work well under duress
- Teamwork skills are required because you will be working closely with others.
- Superior communication skills are required to explain complex information.
Pros And Cons Of Investment Management Careers
Taking on the role of an investment manager offers a variety of opportunities that are not available in many other career fields. Successful investment managers provide their clients with valuable advice.
In exchange, they get virtually unlimited earning potential, a flexible work schedule, and the ability to choose from a wide range of professional specializations.
There are some disadvantages to this profession. It takes time and effort to build a client base, as well as consistent attention to meet the field’s regulatory requirements. Even in the best of times, it’s a high-stress job.
- High pay and excellent benefits.
- Developing industry
- Satisfying work
A prominent benefit of working in investment management is the potential for high earnings.
Aside from the handsome pay and (possibly) flexible work hours, investment managers may find the work itself extremely rewarding.
Furthermore, the industry is expanding. According to the labor bureau, employment in financial management will grow 17% from 2020 to 2030, with an average of 64,200 openings per year, primarily due to job transfers or retirements.
- High levels of anxiety
- Entry stumbling blocks
- A difficult work-life balance
While positions are expected to expand, getting one — or a client’s business — is not guaranteed. Investment management is a highly competitive field, and it can be difficult to break into without extensive education and experience.
Some people may find it difficult to maintain a work-life balance because investment managers frequently answer client questions late at night or on weekends. They must also closely monitor market conditions and economic trends.
The job of Investment Management is all about making sound financial decisions in an ever-changing economic environment. Except if you are interested in such matters, the need to be alert can make this job very exhausting.
As with most jobs, you should only choose this if your temperament matches the job description. Events outside of your control can have an impact on your performance — or, at the very least, the performance of your client’s portfolios.
Frequently Asked Questions
What is the average time it takes to become an investment manager?
What is the significance of investment management?
What is the cost of investment management?
What are the services provided by investment management?
Investment management is a diverse field with numerous job opportunities. An investment manager may specialize in certain types of investments or work with specific types of clients, such as personal or professional investments.
A career in investment management can offer numerous advantages, and learning about them can help you decide if it’s the right field for you.