There is a huge demand for resources in the space of asset management careers, and therefore, today in this article I am going to tell you all you need to know in order to start a career in asset management.
But...let us first get a hang of what asset management really is.
As an investor, all your time and efforts go in figuring out how to make more money out of your existing money.
At the core of every finance profile, your objective is again the same.
Whether it is a person’s money or a company’s money – as an asset manager your job is to invest that money in such a way that it gets accumulated more with minimum risk of losing that money.
And, as you earn more money, you come across more avenues of investing it.
As a rich man, or a rich company you wouldn't have the time to do it all yourself, and that is where asset managers come into the picture.
Asset managers are professionals with expertise in diversifying their clients’ portfolio and earning more money for them.
Asset management can be understood as the process of developing, maintaining, operating, and selling the assets belonging to an individual or a company in the most efficient or cost-effective way possible.
You will also find it referred to as wealth management.
We use this term most commonly in the world of finance when talking about an individual or a firm that manages the wealth or the assets of another individual or company, on their behalf.
Asset management firms administer the investment money of their clients in order to achieve a financial objective within specific guidelines of the investment pool.
It can be in the form of various financial manuscripts like pension funds, retirement funds, hedge funds or simple mutual funds.
It can be done using various financial vehicles like derivatives, options, futures, equity scrips of securities.
Asset managers, depending on the clients’ objectives and risk appetite, would manage the funds and ensure that the financial goals are achieved.
We can divide all the assets owned by any given company into two categories:
Every single company needs to keep track of these assets. This is where asset management comes into play, as it provides specialists that can do these services on behalf of the company. In this way, the company’s relevant stakeholders will know at all times which of the assets are available and which ones they can use to provide optimal returns.
More commonly referred to as an AMC, an asset management company is in charge of investor capital. So, what do asset management companies do? An AMC will direct the investor capital into distinct investments such as:
All the investments made are handled according to a process or an investment mandate that has been formulated internally.
One of the questions that I get the most in regards to AMC is why they work mostly with big companies and wealthy individuals. The answer is simple enough and it will help you pick out your client base in the future. Simply because it would be very difficult to provide the same services to smaller investors at a satisfying price.
A large investor will always have a private account with an asset management company. Cash goes from the client into that account. In some special cases, they may even use what we call a third-party custodian. After that, it’s the portfolio manager’s job to handle the said portfolio by making use of his power of attorney. As simple as that!
We have come to the question that most of you want answered. We’ve already discussed the field in itself, the company on the whole, but what exactly does the person represent?
The simplest way to understand the concept of an asset manager is if you think of him as a custodian of all your money. Or what we would call in better terms - assets.
This person has studied investments and, of course, assets themselves. They can asses the wealth of your assets and show you what to do with them, where and how to invest them. But they are also able to identify if there are any risks in those investments as well as gains you might draw from them.
An asset manager has a lot of experience and is able to tell you exactly how certain assets will perform on the market, what you can expect from them, how they will grow in time or, of course, if they will grow at all. All in all, an asset manager is a guardian that is there to lookout for your best interests.
This is how you have to think about this job. And this is how you have to present yourself to your clients. Now let me tell you a story.
Have you ever heard the parable of the Master who had three servants? Relax a little and enjoy.
There was once a Master who had three servants. He gave them all some money and instructed them to look after it. The first servant went to the market and tried to make something out of the money but failed. The second servant also tried to win more but lost it all. The third servant, seeing the other two fail and lose everything, buried his money in the sand to keep it safe.
In the end, the Master punished one of the servants for failing. Who do you think it was? The servant who buried the money in the sand.
Why? The moral here is that you can only make money if you try to grow it one way or another. Of course, you might fail a few times, but in the end you will get there. A good asset manager will learn how to put in the effort needed to accumulate more and more and make the money grow. Which brings us to the next important question to ask when talking about asset management careers.
The importance of asset management is one of my favorite topics to talk about. I get asked this question not just by individuals who want to follow asset management careers but also by businesses who don’t know why they should hire an asset manager or work with an AMC. Here are some reasons broken down for you.
1.Helps companies keep track of their assets
The process makes it incredibly easy for companies to manage their assets no matter if they are fixed or liquid. In this way, company owners will know at all times where their assets are, how they are being used, and how or if they are being changed.
As a result, any recovery of assets, if necessary, will become far easier and more efficient. This, in turn, will lead to higher returns.
2. Guarantees accurate amortization rates
Seeing as all the assets are being checked regularly, the financial statements that come with them will also be updated.
3. Risk management becomes much easier
Risk management of assets is a big part of asset management and you will be faced with it every day when you are dealing with asset management careers. As a result, a company will be prepared should something risky come its way.
4. It helps remove ghost assets from the inventory
There are plenty of instances where a company’s inventory still holds damaged, lost, or stolen assets. However, when you have an asset management plan in place or a good asset manager, for that matter, the company can be aware of these ghost assets and remove them from their books.
Asset management is a very broad type of management, and this is something that is very crucial to understand, especially when talking about asset management careers. As a result, it includes different industries and disciplines, as you can see below:
This is the classic type, which we often simply refer to as asset management. As noted above in length, it involves managing investment accounts as well as hedge funds for clients.
This branch involves managing the fixed assets of an organization. They include operation, acquisition, decommissioning, and maintenance. We could also expand this definition to include intangible assets in it.
As the name suggests, it refers to the management of public infrastructure - bridges, roads, electric grids, and waterways. The focus here will always be on rehabilitation, maintenance, and replacement of said infrastructure.
This branch is quite similar to the one above. Its goal is to manage public institutions such as schools, airports, parks, and all types of public spaces.
Managing and accounting all functions of IT assets, both software and hardware. This can mean maintenance, contract, and management.
A branch that concerns itself with tracking and managing fixed assets. Its purpose is financial accounting, loss prevention, and maintenance.
Managing all the information that a company either owns, has the right to use, or controls in any way.
Out of all these possible asset management careers, there is one that, in the current climate, interests people most. So I’ve decided to dedicate a few words to it and give you some info that you will find useful. So let’s talk in-depth about real estate asset management!
The first thing you need to know is that real estate asset management is an umbrella term.
It’s a branch of asset management in which the asset manager gives investors who are interested in commercial real estate information about investment opportunities on the market or advice about their existing holdings in such a way so as to maximize their value.
Some examples of this concept I could give you would be professional recommendations that you, the real estate asset manager make to your client such as the following:
The real estate asset manager job description is a very interesting one. As a real estate asset manager you are responsible for the financial performance of your client’s real estate assets.
But what does that mean? To put it as simply as possible, you will have to find the balance between gaining returns from investments and calculating risks which will lead to the increased value of your client’s portfolio.
Are you still with me? Here are some examples of how you can up that value.
You know what you need to do now. Once you get the job, I mean. But how do you get the job?
The real estate asset management career path depends very much on the category in which you are planning to work.
That being said, just like asset management in itself, real estate asset management is an umbrella term as well. It encompasses many different categories and asset management careers that you have the possibility to follow. Here are the real estate asset management jobs you can choose from:
Go over this list and decide what branch of real estate asset management careers you would like to work in.
Once you do, focus on your education and skills.
When it comes to education, you need a real estate bachelor’s degree. However, you can also find jobs in this field if you have a related degree in finance or business administration.
Please be aware that most applicants for a job in real estate asset management also have training in machine repair and equipment handling!
Also, here is something that I am compelled to add in order to give you as much information as possible.
Unfortunately, it’s not very easy to get a degree in property management, as there aren’t that many institutions or schools that offer such programs. As a result, if you are intent on working in this field, you will have to either find a private institution or try to apply for a job using an alternative degree. Which brings us to this.
Here are some of the sectors you can find a job in:
Let’s talk about the reason why you have clicked on this article. How you can become an asset manager.
The internet is absolutely filled with advice on how to get into asset management. In fact, there’s even a WikiHow on how to work in asset management. With pictures. But then again, there’s also a WikiHow on how to time travel. So maybe this is not your best source of information.
In reality, as you might have expected, when it comes to asset management careers, your journey has to start with education. The requirements are not strict in this department, but you will need a graduate degree.
The specialization of that degree will depend on what type of asset manager you wish to become. Let me give you an example.
If, in your future asset management career, you are expected to handle assets that include heavy machinery, you need a degree in industrial engineering. Or, if you will be handling intellectual property as well as patents in terms of assets, this is what you need to study.
I advise you to take a look at The International Standard for Asset Management, more commonly known as the ISO 55000, which I have linked here for you. It has been designed specifically for both organisations and individuals who are planning asset management careers.
However, if you’re planning a career in managing financial assets, you are looking at a completely different set of skills as well as an educational background that you need to prepare.
For this, you need a finance or a business degree. When you graduate, enrol in an advanced course such as an MBA. When you graduate from that stage, you’re still not done. I advise you to acquire a professional certification such as the CFA (Chartered Financial Analyst) or the CAIA (Chartered Alternative Investment Analyst). You can also look into the BIWS Training Program and Certification and ask me more questions any time you want! Are you done now? Not quite.
If you want to apply for an internship as an asset manager, and I always say you should, focus on a specific area.
This piece of advice will come in handy later on. It will also add an extreme amount of value to your resume when, having finished your internship, you will apply for an actual position as an asset manager.
One more thing of note here is that asset management has been taking an increasingly environmental approach lately. As a result, lay the groundwork in this department with an internship where you are able to learn all you can about this early on. It will set you apart in the race for a job. Which brings us to this.
As an asset manager, you have a large number of options when it comes to your resume. Which is fantastic news considering we’re talking about asset management careers.
You can focus on your subjective skill sets (which you choose) or you can focus on more quantifiable achievements (if you have them, considering you are not a beginner).
Let me give you an example.
In your resume, state achievements such as the fact that you have saved X amount of money by implementing changes of your own design to existing contracts for properties that are managed by certain vendors.
Make your resume concise and clear.
If you want, you can add an asset management cover letter to make your intentions clear.
Use bullet points to get all the information across and attach a numerical value to them. This will make it very easy for the employer to read your resume. Plus, it will be a simple talking point when you are eventually called in for an interview. Which we will delve into right now.
To be able to work in an asset management company, you need to possess a certain set of skills and qualifications in order to be successful.
Following is the list of skills that would be required to get an entry into an asset management firm:
This is the first and foremost requirement of any asset management firm.
You need to have a proper graduate or postgraduate degree in finance to start a career as an asset manager.
Preferably the big companies would want specialized courses like CFA (Chartered Financial Analyst) for key positions and even MBA (Master of Business Administration) specialized in finance.
It is not mandatory to have such degrees for starting a career in asset management firms, but if you don’t have these degrees you will really have to work your way up to succeed.
Number crunching is at the core of any finance job, and asset management is no different.
You need to be well versed with tools like SPSS and Microsoft Excel because you like it or not, you will be surrounded by spreadsheets and workbooks in your job as an asset manager.
You need to be comfortable with using these tools in order to do your analysis.
Financial modeling is another aspect in addition to statistical modeling and forecasting that you need to be aware of.
If you did not study them in your graduation or post-graduation, it would be a good idea to take up a specialized course before applying for a job.
As you will move up the hierarchy in an asset management firm, you will be in charge of your own team for doing a job, and therefore you need to know how to manage your resources.
You would also be involved in front end or client-facing activities as a manager, therefore interpersonal and communication skills become extremely important for better performance.
Also, in this position, you would be required to take a lot of decisions that would result in big-time money-making or even loss.
You need to be able to make fast decisions and own up the responsibility for it at a later stage.
Please remember, time is very crucial in decision making as they famously say that time is money. If you lose time in making the right decision, you lose money – and that is not something that you would want to do as an asset manager.
Once again, with the risk of repeating myself, I must tell you this because it’s important. There is no framework in place for the interview, just like there is no set framework for the resume or for your education.
The discussion you will have with your potential employer depends greatly on the branch of asset management careers you are trying to enter.
That being said, you might be asked one of the following:
Under the umbrella of asset management careers, you can follow quite a large number of careers paths. Which is extremely good news for you! However, here are the most common asset management exit opportunities that specialists in this field go for:
As you can see, these are the traditional asset management roles. But you can apply for virtually anything that you are attracted to!
It is an inbound profile with very little interaction with the clients.
Analysts in this role conduct financial and equity research in a team (team size may vary from 2-3 analysts to up to 15 analysts) for their fund manager.
Their primary responsibility is to collect data on a particular company or an industry and analyze its financial strength.
They are required to make reports and present their opinions on buy, sell or hold decisions of a particular script or stock.
In addition to this, they are expected to make recommendations to their managers on diversifying the portfolios depending on their research.
Usually, the minimum pay in this profile is about USD 150,000 and can go as high as USD 1 million in a Wall Street firm.
The kind of work these sell-side research analysts do is quite similar to the buy-side research analysts with a small yet significant difference.
Sell-side analysts usually cater to the external clients as against internal clients in case of buy-side analysts.
The profile is more outward and requires analysts to travel extensively and interact a lot with the outer world.
Whether it is client presentations or media interaction, sell-side research analysts have to be good in communication skills and presentation skills.
They are required to make recommendations on investing their clients’ money in a particular company or industry by presenting facts and analysis.
The salaries offered in this profile are similar to that of buy-side analysts but the pressure is much more.
This is a profile wherein you get to call the shots.
Quite literally this is the ultimate profile within the asset management domain for an aspirant.
As against making recommendations on which stock to include in your fund, here you really get to create your own fund depending on your own and your team's analysis.
As a portfolio manager, you will decide the composition of your fund in terms of which scrips to include and how much.
Read the detailed guide on how to start a successful portfolio management career.
This is an extremely strategic profile and requires a lot of analytical thinking to arrive at a decision.
You will have to work your way up to be able to work efficiently in this profile.
Also, you need to work closely with your team of analysts to understand the research behind every decision that you make.
Typically after 4-5 years of experience as an analyst should get you in this position.
The compensation offered in this profile is quite handsome and can go up to millions of dollars’ worth of money.
This is more of a business development profile where your primary task is to acquire more business or more clients.
Depending on the requirement of your clients, you would sell a portfolio of investments to your clients.
It can include many funds with a different expected dividend.
This is a very senior profile in the asset and wealth management domain and requires at least 8-10 years of experience.
The compensation is mostly incentive-based and a major part of remuneration comes as a part of a commission from the clients.
Firms usually have a base salary which might seem too low but the variable component is very high.
This is a mid-level profile wherein you will handle a specific number of clients.
As a relationship manager you are the mediator between your client and your company.
You will be required to be at your clients’ disposal at all times.
Whether it is compliance, processes or even grievance handling, you will be required to do all of that for your set of clients.
You will also be responsible for educating your clients on new products, services, and offerings that your company might have and try to expand the current relationship for more business from the same client.
The compensation in this profile varies from USD 100,000 to USD 175,000.
In this profile, you will be operational in a particular geography.
In that geography you will be required to generate more business by acquiring new clients.
You will be required to make presentation to the prospective clients and convince them to get in a business relationship with your company.
This profile requires a lot of traveling and networking.
If you are an introvert, this is probably not the right profile for you.
As high as 80% of your time could be spent out of office in this profile.
As you wouldn’t be sitting in office, you will have a support team of your own to do the back end job for you.
This back end job involves identifying prospective clients and scheduling appointments for you.
The compensation in this profile starts from USD 150,000 and can go up to as high as USD 500,000.
This is a pure data-centric job wherein you will be required to deal with ledger books and entering data into spreadsheets.
You will be required to record transactions and calculate the net asset value of various funds depending on its opening and closing values.
Any basic degree in accounting should be enough for getting a job in this profile.
This is usually the most common profile with most of the asset managers start their careers at.
In this profile, you would be like an assistant to the research analysts in the company and help them in their day to day activities.
Primary responsibilities include collecting data on a specific company or industry, using both secondary and primary techniques, creating small reports and helping the analysts in their analysis.
This profile gives you immense learning of the industry and exposes to all the facets of asset management.
This is a profile wherein you would be feeding analysts with the macroeconomic parameters that could impact the funds.
It involves tracking the monetary policies and deriving their impact of specific industries and the economy as a whole.
They do not have a direct involvement in the creation of a fund, but the inputs provided by them are very crucial and often aid the decision making of the portfolio managers.
This is a generic profile and is not restricted to asset management.
The avenues for an economist are usually open beyond asset management.
This is again a generic profile which is not only restricted to asset management.
Here the analysts are required to create models and tools for analysis.
The quantitative analysts will understand the analysis requirement of the research analysts and develop a model that will help them do their analysis in a smooth fashion.
Typically a quantitative analyst will have working knowledge of computing languages like C and Java, as they will be required to write syntaxes and prepare codes for generating new models.
With the advent of the Internet, managing your money has become very convenient and accessible.
There are more investors today than there ever were.
The people are getting aware of financial planning and are investing their money more in non-traditional vehicles.
A simple reason is that traditional investments like insurance and government bonds give lesser returns when compared to modern investment vehicles like mutual funds.
In a survey conducted in the USA in 2008, it was noticed that nearly 50% of the people there owned mutual funds, and the number is fast increasing.
Read the complete guide on mutual fund careers.
With such trend in the investment circle around the world, asset management firms are going to prosper and flourish.
It means that they would need more people to work for them.
And this demand is going to increase in the future as well.
It is an opportune time for you to consider asset management as a lucrative career option.
To answer this question for you, I have ranked the following asset management firms to their managed assets. Please note that the values here are expressed in trillions of dollars.
As we’ve already seen, asset management refers to a company or a professional asset manager handling the assets of another company or individual. They could include fixed income, equity, global investments, real estate, etc.
Wealth management refers to an oversight of a company’s or individual’s entire financial situation. It usually includes taxes, assets, cash, estates, and everything in which they use money. As a result, the difference in wealth management vs asset management resides in the financial task you are handling.
Read the detailed guide on how to make a career in wealth management.
While asset management refers to managing other people’s and companies’ money on their behalf, investment banking means raising money they wish they had, but don’t. It’s as simple as I can make it. The difference between having assets to manage and investing so that you can gain assets.
Both work with extremely wealthy individuals. Or companies. But that’s where the similarities stop. Asset managers handle their client’s assets and make financial decisions on their behalf.
While investment managers work on determining fantastic investment opportunities for their clients and their assets. This means evaluating economic factors and building reports that will lead to successful investments.
Of course, this depends on the branch you want to specialize in. As we’ve already seen, you can be an asset manager for a company that is active in any given domain, from constructions to art to the film industry. Therefore, you must first choose a branch of asset management and then find the best companies within it.
However, on average, the best companies to work for when you’re interested in asset management careers are also the biggest ones that I’ve listed above. You might already be familiar with The Vanguard Group, BlackRock, Fidelity Investments, but also Pacific Investment Management Company, LLC, and Fidelity Investments.
There is no reason in repeating myself at this point and bore you with yet another definition of asset management or AMCs - asset management companies.
As opposed to an AMC, hedge funds will seek to invest in the same class of securities as do asset management companies. However, they want to generate performance that will not be indexed to a singular market return.
Whereas an asset manager virtually owns assets, at least on the behalf of his client and uses them to invest so as to make the best financial decisions for his client, private equity firms have to raise the same capital if they want to invest in individual companies.
The question is a legitimate one since many people believe that a private equity firm is an asset management company. And they are right.
In a way at least. In the sense that they both work in similar fashions, with the difference being that the private equity firm has to create its investment funds from outside investors. Whereas asset management companies simply manage funds for a client and decide whether to invest them into something or not.
I hope this asset management Careers guide gave you clarity on careers in asset management.
If you have any questions, please do not hesitate to comment below.