What is a Career in Asset Management?
Asset management as an industry has a number of different career paths. In Portfolio Management, analysts generate investment ideas, which they present to portfolio managers (PMs). These PMs are responsible for selecting securities, making asset allocation decisions, and managing a portfolio. The PM who bears ultimate responsibility for the portfolio is the alpha manager. Client portfolio managers (CPMs) not only work with the portfolio management team but undertake the majority of client-facing responsibilities. CPMs and PMs can work together to pitch new business and present updates on the strategy. Marketing in asset management includes roles responsible for developing marketing strategies and providing marketing collateral while relationship managers look after clients by providing materials and dealing with requests. There are also compliance, trading, and operational roles within the asset management industry.
Key Learning Points
- The asset management industry is typically known for offering competitive compensation packages combined with a good work-life balance.
- Finding a position may be challenging as there are fewer jobs than in areas such as investment banking.
- Competition is keen and employees are highly qualified, typically holding both an advanced degree and professional designations.
- Asset management can provide an attractive exit opportunity for professionals in investment banking, hedge funds, or even private equity.
Why work in Asset Management?
“Why asset management?” is a popular interview question. While the typical response often mentions a passion for investing, for many the simple truth is that the work-life balance in this field is far better than it is in investment banking or private equity. While compensation is still extremely attractive, hours rarely exceed 60 per week (usually less) and weekends are predominantly free. A career in asset management offers intellectual stimulation and teams are typically diverse in terms of background and education.
Educational Requirements
In terms of education and academic achievements, expectations are high in the field, although it is not as intensely competitive as private equity. A bachelor’s and master’s degree in finance is viewed as an advantage, but sometimes graduates with other majors will be considered. This is especially relevant for sector specialists whose “real-world” experience is perceived as an asset. Graduates from other quantitative disciplines such as physics or mathematics may also be considered, particularly for highly quantitative strategies. The most common qualifications are an MBA or a master’s degree in finance
Certification/Courses
In asset management, financial certifications are an excellent way to demonstrate competence and dedication and earn an interview. If you are considering a career in asset management or you have recently been hired in an asset management role, enroll in our online portfolio manager course. Master the portfolio management process, watch an expert interview with a wealth manager, and receive a Wall Street recognized certification.
The Chartered Financial Analyst (CFA) designation also adds value to any resume. The Chartered Alternative Investment Analyst (CAIA) designation focuses on alternative investments. In addition, the Chartered Institute for Securities and Investment also offers a range of qualifications attractive to employers in the UK.
Last but not least, as ESG (Environmental, Social and Governance) factors are becoming increasingly important to both public and private companies, and are highly valued by employers. Take the ESG Certificate online course, and master the core concepts surrounding ESG analysis, investing, and portfolio construction to create and maintain shareholder value.
This is an example career path in portfolio management with the certificates and qualifications an individual may have at each level.
Team Structure
Junior Analyst & Analyst
The typical entry-level position is junior analyst or analyst (this depends mostly on the company and team’s size). Analysts are responsible for researching new investment opportunities by performing both quantitative and qualitative analysis.
Senior Analyst
Senior analysts usually have a few years of experience with the team and are very familiar with the investment philosophy, process, and universe. They generate ideas, cover securities included on a “watch list” and maintain up-to-date recommendations on portfolio companies.
Junior Portfolio Manager
Junior portfolio managers support the lead portfolio manager in research, but also with activities related to portfolio management. They typically spend a few years on the team and would have previous experience as either a senior analyst or deputy portfolio manager elsewhere.
Portfolio Manager
Portfolio managers are the key professionals responsible for running a specific mandate/strategy/fund. Their responsibilities include security selection, portfolio construction, risk, management, and ongoing monitoring, as well as portfolio rebalancing and optimization.
Key Skills Required for Asset Management
Some of the key skills required for a successful career in asset management include:
- Strong financial modeling and writing skills
- Strong knowledge of financial markets, asset classes and risk
- Ability to assess an investment’s potential for return
- Presentation and relationship management skills
- Critical thinking, both from micro and macro-economic perspective
Asset Management Salary & Bonus
As you might expect, salaries vary across different organizations (depending on the firm’s size, the type of fund, and seniority). Total compensation includes a base salary and a performance-related bonus. To align employee and client interests, analysts may be compensated for the performance of their stocks and portfolio managers on the performance of their strategy. The table below shows rough estimates that are in line with the seniority position.
| Position | Base Salary in USD | Bonus in USD |
| Analyst | $70K – $90K | $20K – $40K |
| Senior Analyst | $90K – $120K | $40K – $60K |
| Deputy Portfolio Manager | $120K – $200K | $80K – $100K |
| Portfolio Manager | $300K – $500K+ | $500K+ |
Asset Management Hours
As potential candidates might expect, the hours are much better than in areas such as investment banking. The exact number of hours depends on team resources and the market environment, but anything more than 60 hours per week would be extremely rare. Unless something urgent comes up, weekends are usually free.
Asset Management Pros and Cons
Some feel that asset management offers less stress than a field like investment banking but still comes with a very competitive salary. The work is intellectually stimulating, especially for those who are passionate about the financial markets and enjoy analyzing companies. In addition, the culture in asset management tends to be less politically driven and the environment is more relaxed.
On the other hand, competition for jobs is extremely strong as many investment bankers and hedge fund professionals see asset management as a good exit opportunity, which adds to the demand for the already fewer jobs available. There is also some mobility between asset management and hedge funds or private equity funds.
Is Asset Management Right for You?
This depends on personality. For those who value stability and a good work/life balance but still want substantial compensation, asset management could be the perfect fit. However, the field is still quite competitive and intellectually demanding, so a degree and additional professional qualifications are a must.
For those who enjoy higher-risk environments and strive to generate higher income, investment banking, private equity, or hedge funds may be more appealing.
Conclusion
Asset management careers are typically a good fit for those who seek intellectual challenge, are naturally curious, and have strong knowledge of the financial markets. Compensation is competitive. These factors, combined with good work-life balance makes the industry appealing to experienced candidates from across the financial sector.
Additional Resources
Types of Roles in Asset Management
Investment banking vs asset management