The concept of portfolio management is applicable to many different industries, but it is most notably used in the financial services sector to manage a mix of securities, cash and other assets. Portfolio managers identify clients’ long-term objectives and choose appropriate types of investment products to achieve those objectives. These financial managers periodically review portfolios to make sure that expected performance goals are being met. They keep track of trends that could potentially impact the profitability of their clients’ portfolios, and they use systematic risk management techniques to make changes to the portfolios’ investment mix. The portfolio manager role is one of trust, and here are some of the steps that successful portfolio managers take to find and maintain employment in this career category.
Academic Experience
An undergraduate degree in a business discipline is often the foundation of a career in portfolio management. Finance, accounting, economics and business administration are common majors taken by aspiring portfolio managers. The courses taken in these programs introduce students to the fundamental principles that govern the business environment as well as foundational finance theories. Participating in internships with banks, investment firms and insurance agencies during their undergraduate years gives students an advantage when they pursue full-time employment after graduation. Some top financial services firms prefer that their portfolio managers have advanced degrees in finance or business, and workers normally pursue Master of Finance or Master of Business Administration (MBA) degrees after gaining a few years of relevant, full-time experience as financial analysts.
Resource: The 30 Best Master of Finance Degree Programs 2014
Continued Education and Training
Portfolio managers are life-long learners, and they are always seeking ways to expand their knowledge of asset management. Most universities offer professional development certificate courses that allow students to gain advanced knowledge about debt and equities securities and the risks associated with these financial instruments. Some continuing education courses, conferences and workshops are offered by industry associations and professional societies.
Industry Licensing and Certifications
Before a financial analyst can become a portfolio manager at the country’s top investment firms, they need to pass licensing exams that are administered through the Financial Industry Regulatory Authority like the Series 7 or 63 exams. Portfolio managers whose portfolios exceed $25 million in value must register with the Securities Exchange Commission. Some portfolio managers make themselves even more marketable by gaining industry credentials like the Chartered Portfolio Manager or the prestigious Chartered Financial Analyst (CFA) designations. Earning the CFA credential involves intense study of the finance discipline, and CFA charterholders make over $25,000 more per year than MBA graduates make on average.
Networking
Finding the best jobs in the industry often depends on good networking skills and opportunities. Portfolio managers develop good communication skills throughout their careers, and occasions to network happen often when they join professional associations. Examples of professional organizations for portfolio managers are the American Academy of Financial Management, the Investment Management Consultant Association, the Risk Management Association and the CFA Institute.
Managing the portfolios of individual and business clients is challenging, and it requires a high level of competence. Business clients trust portfolio managers to help them to grow their companies and take care of their employees, and many hard working individuals rely on portfolio managers to make their retirement dreams come true. Portfolio management also becomes extremely rewarding as financial managers watch long-time clients successfully expand their business operations and their spheres of influence.
