In the topsy turvy stock market, it’s essential that split-second buying and selling decisions are made efficiently to maximize potential growth in changing market conditions. That’s precisely where fund managers come into the picture. Fund managers are highly trained financial analysts. They have the hefty task of directing a fund’s overall investing strategy for minimizing risk while reaping solid monetary gains. Fund managers can be in charge of making decisions for any type of investment portfolio, including these funds:
- hedge
- mutual
- pension
- insurance
- trust
It’s their duty to closely monitor the fund’s performance and make any necessary changes to help investors meet their stated financial goals. Fund managers help investors and businesses diversify their portfolios by buying and trading various securities.
Salary
According to the Bureau of Labor Statistics, the 262,610 fund managers and other financial analysts in the United States make a mean yearly salary of $92,250. This is equivalent to an hourly wage of $44.35. Fund managers working for banks make slightly less at $89,250. The highest paid fund managers are in securities and commodity exchanges. They have an average income of $124,400 each year.
Beginning Salary
When just starting out as a fund manager, you should expect to land in the bottom quarter percentile with an annual salary under $60,350. However, fund managers with years of experience and significant responsibility in overseeing large sums of money often bring home upwards of $154,680 annually. There’s clearly no limit for salary potential as George Soros, the world’s richest fund manager, is worth $24.2 billion.
Key Responsibilities
Fund managers are given the primary responsibility of making fast-acting investing decisions to maximize the performance of:
- stocks
- bonds
- other securities in their clients’ portfolios
Fund managers generally supervise a team of financial analysts. They perform data analysis on investments for making well-informed buying or selling choices. On a typical workday, fund managers could be found:
- preparing financial reports
- checking for SEC compliance
- hiring finance staff
- negotiating with brokers
- managing portfolio risk
- diversifying portfolios
- researching market trends
- meeting with investors
- justifying their decisions
Fund managers stay ahead of uncontrollable market forces to boost investment growth.
Necessary Skills
As a fund manager you need the critical thinking skills to quickly buy, sell, or hold securities for maximizing market conditions. Fund managers must possess strong analytical skills for discovering the most profitable investing avenues. Mathematical ability is essential for fund managers to balance the dollar signs and estimate value potential for various securities.
Being detail-oriented with solid organizational skills is another must. Fund managers must create meticulous reports tracking their different funds. Fund managers should fine-tune the technical skills to use computer software that analyze investing trends and formalize helpful forecasting reports. It’s also important for fund managers to have the communication skills to concisely explain their investment decisions or recommendations.
Degree and Education Requirements
Qualifications needed to become a fund manager vary. However, the majority hold at least a four-year bachelor’s degree from an accredited higher learning institution. Most fund managers pursue a degree in finance, but it can be beneficial to earn an undergraduate major in:
- business
- economics
- mathematics
- statistics
- another closely related field
Regardless of your major, it’s critical that you take courses on:
- capital markets
- financial statement analysis
- portfolio management
- bond valuation
- securities trading
- investment banking
- market research
In today’s competitive job market, more and more fund managers are returning to graduate school. Earning a Master of Science in Finance (MSF) or MBA in Finance could be priceless in advancing your career into fund management.
Pros and Cons of the Position
Playing in the stock market may sound like all fun and games, but there are both rewards and challenges in being a fund manager. On the plus side, fund managers can specialize their talents by working on either the buy-side or sell-side of investing. Fund managers are paid handsomely for their work with an annual salary that often exceeds six-figures. Faster than average job growth means positions in fund management will be easier to find than many other financial professions. There’s also plenty of opportunity for fund managers to advance into larger portfolio management positions.
On the other hand, fund managers will still face competition since many finance graduates are attracted to the high-paying job. Fund managers have to deal with the stress of strict trading regulations and controlling piles of money. Most fund managers also work longer than 50 hours per week.
Getting Started
While still attending business school, it’s best for aspiring fund managers to begin developing their financial analysis skill sets in applied, hands-on settings. Take advantage of valuable internship experiences to get your foot in the door and begin managing portfolio investments under supervision. Upon graduation, your bachelor’s degree will qualify you for various entry to mid-level positions on the path to fund management. Fund managers often start out as financial analysts or researchers.
Make certain that you become properly licensed through the Financial Industry Regulatory Authority (FINRA) to manage securities. With experience, you can become a fund manager and start supervising a mix of investments. Employers also recommend receiving certification for advancement. Through the CFA Institute, you can work towards the prestigious Chartered Financial Analyst credential. You do this by having four years of experience and passing three rigorous certification exams.
Future Outlook
Our nation’s economy is finally recovering from the latest crisis, which means investors will have more money available to bolster their portfolios. As more financial products enter the market for trade, the demand for fund managers to make keen investing decisions will rise. Stricter enforcement of financial regulations will also make it more important for fund managers to carefully monitor their fund’s investment strategy. The BLS reports that the employment of fund managers and financial analysts will grow faster than average at 16 percent. It’s likely that job prospects will be sunniest for educated and certified fund managers working in:
- investment firms
- securities and commodities exchanges
- banks
- insurance carriers
- private corporations
People invest their money in funds for growth, so fund managers are responsible for putting their clients’ investments to work in driving big capital gains. Since fund managers are also tasked with keeping their clients’ money safe, they must find a happy balance in being prudent and taking some healthy risks. Fund managers are upper-level financial analysts who depend on thorough research to make the best possible buying and selling choices. If you become a fund manager, you’ll build a lucrative and rewarding finance career helping funds outperform competitors for significant returns.
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