The product development field is an important field in the financial service field, especially in investment management. Determining which asset management fund products will be released, in which countries and when is a key decision for any company.
On the other hand, the product developer is usually the person who makes the final decision on the asset management product and its pricing structure that investors must choose. If you know something about new things and things that may be popular, then this may be the career for you.
- In the financial field, product development involves making and honing financial products available to the company’s customers.
- The product developer decides which securities and investment tools to provide, and the pricing structure attached to them.
- It can also develop complex offshore financial products to suit more sophisticated investors or high-net-worth individuals.
The role of product development
When seeking to launch new products, people in the product development department often look for gaps in the product line. When setting up a new fund, product developers will work with legal and compliance teams to ensure that investment vehicles meet all regulatory and legal requirements. They also work closely with marketing and sales departments to produce promotional materials for new investment products.
The product development team also plays a role in evaluating competitors’ products. This allows the team to ensure that their company’s products are fully positioned to compete effectively. Because of their competitive intelligence, they usually make recommendations when merging or canceling funds and setting fund pricing.
Product development: what is needed
Although product developers usually have experience in other investment management fields, entry-level positions do open from time to time, depending on the company. If you are an undergraduate considering a career in investment management product development, you may want to consider taking courses in economics, accounting, mathematics, and marketing. MBA degrees are always favored by investment management companies. However, if you do not have an MBA degree, enrolling in a CFA or CAIA course may also help.
- The Chartered Financial Analyst (CFA) program is provided by the CFA Institute and includes three levels of tests, which you can study independently. Passing all three levels, in addition to obtaining four years of qualified work experience and completing a professional conduct statement, you will also receive a CFA license. Because this charter is difficult to obtain, it is a highly regarded symbol of knowledge in the investment community.
- The Chartered Alternative Investment Analyst (CAIA) program provides courses focused on alternative investments. The CAIA professional course has two levels of examinations, covering hedge funds and private equity investment products as well as real estate, managed futures and commodity products. The CAIA title is awarded by the Chartered Association of Alternative Investment Analysts to individuals who have completed the program and have at least one year of professional experience.
Develop offshore products
CFA or CAIA designations may have important value in offshore product development departments. Offshore product development focuses on the launch, sales and marketing of funds outside the United States. The laws and regulations of different countries/regions vary greatly, and offshore product developers must work closely with the legal and compliance departments to ensure that the funds meet the requirements of each issuing country/region. Sales and marketing methods must also be adjusted according to the country/region where the investment vehicle is issued—especially when a particular country needs to consider important cultural characteristics when determining its strategy.
Because of these compelling challenges, some employees in the product development department choose to focus on offshore marketing. However, when you are first hired by a product development department, you will usually first understand the know-how of domestic product marketing — or the practice of developing fund products sold in the United States — and then turn to offshore investment vehicles.
What to expect
The product developer’s day is diverse, complex, and up-to-date.Like most people in the investment field, product developers often start their day with reading Wall Street Journal and Financial Times, Watch CNBC and financial news programs, and carefully read online forums and websites that discuss current financial events and developments.
A member of the product developer might meet in the early morning with the legal department to review the prospectus for the new fund’s launch. After that meeting, a similar gathering may be held within the compliance department to discuss compliance issues for the same fund that will be launched in the near future.
At lunchtime, the product development department can have an informal meal together to compare opinions and discuss the latest progress of the fund launch. There may be a meeting with the sales and marketing department in the afternoon to discuss another investment tool recently launched. The topic may be the collateral needed to sell the fund, or to introduce sales staff to the best way to sell funds with potential investors.
Finally, before employees go home that day, they may dump the pricing data of competitors in order to consider pricing strategies for the upcoming new fund products. Some of these reports may enter the staff’s briefcases to continue the evaluation at dinner or at home.
In investment management companies, product development is a challenging but ultimately rewarding career path. Product developers hold the pulse of exciting new fund launches and play an indispensable role in formulating the strategy behind the new product. If you like the idea of being at the center of this storm, you may want to consider working in product development.