Career in Investment Management

Is Being An Investment Manager a Good Career Path?

If you have an affinity for numbers and money and you enjoy helping others, then you might be thinking about a career as an investment manager.

This profession involves helping others discover the best investments so that they can maximize their assets. In this role, you would manage, assess, and boost your clients’ financial portfolios. In addition to helping others, a career as an investment manager can be quite lucrative.

In fact, according to the United States Bureau of Labor Statistics (BLS), the net income of the top investment managers is greater than 4.5 percent of the annual median salary for all careers and industries.

For many, the impressive earnings potential is reason enough to seek a career in investment management. The fact this job involves helping others further adds to the appeal. It’s a high-stress job, however, and demands a lot of time and attention.

If you’re thinking about pursuing a career as an investment manager, before proceeding, it’s important to gather as much information as you can about this position. You may be tested on various skills including your management abilities when applying for roles. Make an informed decision and determine if it is the right direction for you.

What Does Investment Management Entail?

Investment managers, as the title suggests, are professionals who manage the financial portfolios of others and assist their clients in achieving their financial goals. The clients that an investment manager serves vary and can range from private individuals to private and publicly traded institutions:

  • Insurance companies
  • Corporations
  • Pension funds
  • And even charitable organizations

The financial portfolios that this professional managers are comprised of their clients’ various assets, which can include the following:

  • Stocks
  • Bonds
  • Options
  • Mutual funds
  • Real estate
  • Commodities
  • Annuities

An investment manager works hand-in-hand with their clients to assist them with developing and implementing both short- and long-term investment strategies. These strategies are based on market conditions, how much an investor is willing to risk, and his or her individual objectives.

An investment manager is tasked with a variety of responsibilities, which can include the following:

  • Developing investor profiles that are based on several key elements, such as the financial analysis of their clients, their monetary goals, the risks that they are willing to take, and other key information related to their assets that could affect their wealth.
  • Identifying and recommending investments that would help their clients achieve their objectives and maximize their finances.
  • Assess shares or companies that are publicly traded.
  • Elevate multi-asset portfolios for their clients by conducting timely stock trades, weighing assets, and more.
  • Assess the financial portfolios of their clients and analyze Key Performance Indicators (KPIs).
  • Field and update client inquiries regarding any and all of the aforementioned elements.

How Much Do Investment Managers Make?

Financial Manager Counting Money

According to the United States Bureau of Labor Statistics (BLS), in 2021, the median annual salary for financial managers was $131,710.

The BLS also reported that the top 10 percent of financial managers earned a median annual income of $208,000, or roughly 4.5 times the median annual salary for all other professions that the BLS monitors.

Financial analysts, a typical entry-level position for hopeful investment managers, earned a median annual income of $81,410 in 2021. This works out to be almost twice the median annual income for all professions that the BLS tracks.

Investment managers – particularly those in senior positions – are handsomely rewarded for their talent and dedication.

Not only do these professionals earn a competitive annual salary that far exceeds virtually all other careers in the United States, but they can also be rewarded with bonus pay if they meet outlined objectives, as well as a number of other perks; stock options, for example.

How To Become an Investment Manager

Investment managers provide their clients with advice and guidance so that they can meet their financial goals and earn maximum returns on their investments. If you are considering a career in investment management, you will need to have the necessary background knowledge, experience, and skills that this profession requires.

Education Requirements

If you are considering a career as an investment manager, it is highly likely that you will need to obtain a degree in finance, business, or economics. While requirements do vary, most entry-level positions in the field of investment management require a Bachelor’s degree as a minimum.

However, successfully obtaining a Master’s degree or higher can further help to increase your chances of securing a position in this field – even at entry level.

Skills Required

In addition to successfully obtaining the knowledge that successful investment management requires, you will also need to have the appropriate skills. Managing the wealth of others is a big responsibility and can be very stressful. Additionally, it can be a highly competitive work environment.

That said, you will need to be able to effectively handle stress and competition among your colleagues in order to excel in this field. Furthermore, you will need to be passionate about finances and helping others achieve their goals. The ability to set goals and develop and implement strategies that will allow you to achieve those goals.

An ideal candidate will be a passionate, detail-, and goal-oriented individual who enjoys finances and mathematics. If you are proficient in data analysis, and you like solving complex problems and helping others, then you should be able to succeed in a career in investment management.

Pros and Cons Of a Career In Investment Management

Manager Calculating Money

As with all professionals, working in the field of investment management has several advantages, as well as some disadvantages. It’s important to be aware of both so that you can determine if it is a suitable career path for you and if pursuing a job in this field is the right choice.

Advantages of a Career In Investment Management

A career in investment management does afford several advantages. Some of the most notable pros that are associated with working in this field include the following:

  • Varied career options. There are several career options available in the field of investment management. As reported by the US Bureau of Labor Statistics (BLS), in 2020, there were roughly 650,000 financial manager jobs in the United States. Positions in this industry varied and were available in a number of sectors, including banking institutions, credit unions, brokerage firms, and insurance companies.

The following are just some of the positions that investment managers can hold:

  • Financial analyst
  • Portfolio manager
  • Hedge fund manager
  • Risk manager
  • Stockbroker
  • Private equity associate
  • Risk analyst
  • Ratings analyst
  • And more

You could opt to manage the investments of private individuals, as well as private and publicly traded businesses, corporations, charitable organizations, and more.

Some of the most notable financial institutions in the world employ investment management professionals, including:

  • Vanguard
  • Blackrock
  • JP Morgan Chase
  • Citigroup
  • Goldman Sachs
  • HSBC
  • Merrill Lynch

Additionally, you can also work for yourself as an independent contractor.

  • Financial rewarding. As discussed above, investment managers are well-paid, and in fact, it is one of the highest-paid professions in the United States. According to the BLS, entry-level positions can pay a starting salary of around $51,000, and talented individuals who have the drive and desire to succeed can earn upwards of $200,000 per year or more. The median annual salary for investment managers who works as financial analysts or financial managers ranged between $83,664 and $134,180 in 2020.
  • Positive career outlook. Being that there are so many different financial products and that the need for skilled professionals who have an in-depth knowledge of finance and investments continues to grow, the career outlook for investment managers across all sectors is bright. In fact, the majority of analysts project that there will be positive growth in employment in the coming years. The BLS projects a 17 percent increase in employment in this field between the years 2020 and 2030, and the job outlook for investment managers is better than it is for all occupations in the United States; this is particularly true for individuals who are knowledgeable and skilled in technologies that are used in the technology sector.
  • It’s interesting. As an investment management professional, you will be providing individuals and organizations with advice and insight about what they should do with their finances so that they can grow their wealth and financial objectives. It requires carefully assessing the markets and the portfolios of your clients to find and recommend the best investments to achieve those goals. A career as an investment manager can kind of be likened to that of a detective. As such, you are always on your toes, and the job is constantly changing. It is rarely monotonous, and you will seldom get bored.
  • Rewarding. The vast majority of investment managers love what they do for a living. Knowing that they are helping others and providing them with the information and insight that is needed to grow their wealth and achieve their financial goals is something that is quite fulfilling. That, coupled with the fact that this career can be very well, mean that working as an investment management professional can be quite rewarding.

Disadvantages Of a Career In Investment Management

There are some downsides associated with working in the field of investment management. Some of the most notable cons include the following:

  • High stress. Being tasked with managing the financial portfolios of others can be extremely stressful. Not only that, but it is a fast-paced and highly competitive industry. These factors combined mean that working as an investment manager can be very demanding and stressful.
  • Entry barriers. Unfortunately, there are some barriers that exist that can limit opportunities to land an entry-level job in this field. For example, nepotism has long been an issue in this field, and often people are hired based on the people that they know rather than their skills and merit.
  • Work-life balance. Working as an investment manager can involve long hours and requires a lot of dedication and direct, one-to-one work with clients. These elements, on top of the high stress that is often associated with this job, can make managing a healthy work-life balance a serious challenge for many.

Should You Become An Investment Manager?

Working in the field of investment management can be financially and personally rewarding. There are ample career opportunities, the future of this career does appear bright, and the earnings potential are great. Plus, you’ll be helping others increase their wealth and meet their own objectives, which can be quite fulfilling.

When trying to decide whether or not this is the right career path for you, it is important to keep in mind that investment management can be demanding and stressful.

If you understand and have weighed the pros and cons that are associated with working as an investment manager, and the pros have come out on top of the cons, then yes, a career in this field could be a great option for you.