Portfolio managers: career paths and qualifications

Portfolio managers work for wealth management companies, pension funds, foundations, insurance companies, banks, hedge funds, and other organizations in the securities industry. They oversee the day-to-day management of investment portfolios on behalf of individual or institutional clients. Portfolio managers are generally responsible for all aspects of the investment portfolio: from creating and managing an overall investment strategy that meets the needs of the client, to implementing the strategy by selecting the appropriate portfolio of securities and investment products and continuously managing the portfolio.

Portfolio managers are usually responsible for overseeing a team of senior financial analysts, who generate analysis reports and recommendations to provide information for investment decisions and strategy formulation. Portfolio managers also communicate with analysts from investment banks and other seller companies to determine products that may be suitable for a particular portfolio. Some portfolio managers, usually including managers working in wealth management companies, may also need to meet and communicate with individual clients to discuss investment strategies, explain investment decisions, and provide the latest information on portfolio performance.

Key points

  • Portfolio managers work with teams of analysts and researchers to formulate investment strategies and decisions for the portfolio of institutional or individual investors.
  • Portfolio managers usually start their careers as financial analysts.
  • Although not required, most portfolio managers have a master’s degree in finance, business administration, economics, or other digital fields.
  • To engage in portfolio management work requires a license from FINRA, registration with the SEC, and professional certifications such as the usual chartered financial analysts.

Portfolio manager career path

The career of a portfolio manager usually begins as a financial analyst working on stocks, bonds, or other securities for companies in the securities industry. Junior analyst positions are usually open to bachelor’s degree graduates. After several years of experience, many junior analysts return to school to obtain a Master of Business Administration (MBA) degree or other related master’s degrees, and then take up senior analyst positions. An appropriate master’s degree can immediately qualify new applicants for senior analyst positions.

Senior financial analysts engaged in investment work usually generate reports and recommendations for specific securities under the guidance of portfolio managers. Senior analysts usually focus on specific types of securities and spend most of their time on new research and analysis, updating research based on new developments, communicating with industry contacts, and making recommendations to management and customers. Senior analysts also supervise and direct the work of one or more junior analysts.

With good work performance and professional knowledge, senior financial analysts can become portfolio managers. If the portfolio performs well, the manager may upgrade to a larger portfolio that manages more funds. Senior portfolio management positions are usually the end of a career path, although some people will enter company leadership positions or start their own businesses to start new companies.

Portfolio Manager Education Qualification

A bachelor’s degree in a related field is the basic qualification for a portfolio manager. However, many employers require a master’s degree, and most portfolio managers hold a master’s degree, even if they are not absolutely necessary.

A variety of undergraduate subjects are generally considered good preparation for entry-level positions in the major, including quantitative business subjects such as accounting, finance, and economics. Other related disciplines include statistics, mathematics, engineering, and physics, all of which place great emphasis on the development of quantitative and analytical skills.

At the master’s level, an MBA in finance or other related fields (such as business administration or economics) is the standard for portfolio managers. A master of science degree in finance is also a good choice.

USD 98,440

According to salary.com, the average annual salary of portfolio managers in 2021.

Other portfolio manager qualifications

Most employers require portfolio managers to hold a financial analyst certificate. The most prominent and most needed certification in this field is the Chartered Financial Analyst (CFA) title awarded by the CFA Institute. This title is open to any financial analyst with a bachelor’s degree and four years of acceptable work experience. It awards qualified candidates who have passed a series of three exams. Many employers also use the Certified Financial Planner (CFP) designation awarded by the CFP Board as an optional qualification.

Depending on the type of assets they use, portfolio managers must also hold an appropriate license from the Financial Industry Regulatory Authority (FINRA), which is the oversight agency for securities companies and brokers operating in the United States; taking qualification exams usually requires employer sponsorship. If the work involved in asset management exceeds $25 million, the manager will need to register with the U.S. Securities and Exchange Commission (SEC).


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