How to Get Into Asset Management?

How to Get Into Asset Management Career?

Asset management refers to investing pooled investment of investors into different assets like securities, stocks, bonds, real estate managed by manager who is compensated by fees or certain percentage of asset of investors or commissions as they do market analysis and create a portfolio of investment for their clients.

First, let’s explore the paths of asset management, and then we will talk about qualifications, skills, experience required, compensation structure, and job opportunities.

How to get into asset managementSource: Fidelitycareers.com

Career Paths in Asset Management

If you are now aware of what Asset Management is, you may have a look at this in-depth article on What is Asset Management.

In simple terms, the purpose of asset management is to use the money to make more money. But every asset management firm has a different objective. The idea is to know where you want to get your strong footing.

How to get into Asset Management? Here are three possible paths to break into asset management –

Working for a local bank or a small mutual fund:

If your idea is to get started quickly, you may consider this option. Though many aspirants don’t take this route, you can still work your way up toward a better future if you choose a small mutual fundMutual FundA mutual fund is an investment fund that investors professionally manage by pooling money from multiple investors to initiate investment in securities individually held to provide greater diversification, long term gains and lower level of risks.read more or a local bank/trust to start with. Small mutual funds or firms don’t need you to get an expensive degree or be the top student. All you need to have is a graduate degree in economics or finance and a willingness to make your mark in the asset management field.

Working for a Big Mutual Fund or Wall Street Firm

Most of the aspirants who would like to go into asset management dream of working in a big mutual fund or a Wall Street firm and manage whopping funds of millions and billions of dollars. If that is what you want to pursue, you need to have a degree from a top-notch institute in finance or economics. However, if you feel that you have few years of experience in small firms and want to take it to the next level (e.g., portfolio manager), you can consider pursuing an MBA from a first-tier business institute, or you can also pursue advanced certifications like Chartered Finance Analyst (CFA).

Starting Your Own Private Asset Management Firm:

It is a big deal. And you shouldn’t do it until you are thorough with the market and know quite a lot to run on your own. For starting your own, you need to go through the required securities examinations. Once you are through, either you can start your own financial advisory firm, or you can act as an assistant to someone who has already started one. The most important skill in this route is the ability to sell. The more you are able to sell, the more clients would trust you and more you would be able to exercise your skills and abilities to use the money to make more money for your clients.

Now, among the above three career paths, you can start anywhere (if you choose). But you need to be brutally honest with who you are, the skill sets you to have, and how much you want to pursue a career in asset management (at least ten years down the line).

If you aim to pursue your degree from the top-notch institute, the second option will suit you best. Otherwise, you can start with the first option and work your way up to achieve a top position in a big mutual fund. And eventually, if you wish you to pursue a career in financial advisory, you can think of that as well.

Let’s talk about educational qualifications in detail to help you figure out how to get started.

How to Get Into Asset Management

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Educational Qualifications for a Career in Asset Management

How to get into asset management - education qualifications

source: Fidelitycareers.com

How to get into Asset Management? Here’s what you should pursue to break into asset management –

Skills Required for Asset Management Career

How to get into Asset Management? There are two skills that you need to master if you want to get into asset management.

Before going into the skill, here’s a word of warning – you need to be really good on these skills if you want to go to the top position; because there is a lot of competition for the asset management career. As the level of skills will decide how much you will get compensated, skills are the holy grail of an asset management career.

How to get into asset management - Skills Required

source: Fidelitycareers.com

Quantitative & Analytical Skill:

As we mentioned earlier, to master this skill, you need to be thorough with accounting and statistics. Your job would be to look through the spread-sheets, financial model in excel and decide quickly which investments will make more sense for your clients. As a lot of money is involved in this sort of transaction, the most accurate decisions often pay big commissions, and at the same time, a slightly wrong decision would hurt your client’s pocket and your career as well. So, before you ever get a full-time job, make sure you are pretty good at this skill. You should know intuitively what will work and what won’t. Often this intuition only works when you have been sitting with something for a really long time.

Managerial & Organizational Skill:

This skill will come later. Once you are very good at quantitative & analytical skills, you will get ahead in your career. And soon enough, you need to manage a team and most sensitive investments. You need to organize the entire thing so well that even if something is lost, you would know where to find it.

If you master these two skills, another skill you will require at a minimum level, and that is communication & interpersonal skill. As you will deal with many clients, teams, managers, subordinates, peers, brokers, and traders, you will need to communicate with them effectively to generate the best output.

Experience & Compensation in Asset Management

The salary of asset management professionals is quite good. But if your aim is to earn more, then maybe you would be disappointed. You won’t be making whopping six figures in the beginning, and rarely would you make much money per year. However, if you have many years of experience, you can cross the six-figure level.

The average income of the asset managers in the USA is $69,000, according to Payscale.com. If there is any bonus/profit included in your salary, you can expect anything around $14,000 – $24,000 per annum as bonus/profit.

The overall income of asset managers is ranging from $41,000 to $121,000 per annum.

Asset Management
Asset Management

source: payscale.com

Now, let’s have a look at how experience affects the salary of asset managers.

Asset Management

source: payscale.com

If you take into account the majority of asset managers, you will see that 31% have more than 20+ years of experience (i.e., in their late-career). Only 16% are entry-level employees. What’s stunning is even mid-career asset managers are lesser (only 25%) than the ones who have been in their early/the late 50s.

Asset Management

source: payscale.com

From the above chart, it’s clear how experience is proportionate with the compensation for asset managers.

  • When you are just starting out (up to 5 years), your compensation wouldn’t be more than $60,000 per annum.
  • With 5-10 years of experience, you would be able to earn around $78,000 to $80,000 per annum.
  • Having 10-20 years of experience will help you earn around $83,000 per annum.
  • And if you have more than 20 years of experience, you will earn around US $95,000 or more.

Jobs Available for Asset Management Profile

How to get into Asset Management? Let’s look at the job options available in the asset management field.

How to get into asset management - available jobs

source: Fidelitycareers.com

It will help you choose the right career for you –

You can also choose to be a broker, a sales manager, or customer service representatives in support roles. Since you want to enter into asset management, we have mentioned what job options you have.

Top 20 asset management firms in the world

How to get into Asset Management? Now which company you should choose to work in. Here’s a list of the top 20 asset management firms in the world. We will start with number 20 and go upward. The rank is given on the basis of AUM (assets under management) –

  • Rank # 20: Northern Trust Asset Management, USA (AUM – $875 billion)
  • Rank # 19: Wells Fargo, USA (AUM – $890 billion)
  • Rank # 18: HSBC Holdings, UK (AUM – $896 billion)
  • Rank # 17: Wellington Management, USA (AUM – $927 billion)
  • Rank # 16: Amundi, France (AUM – $985 billion)
  • Rank # 15: Legal & General Group, UK (AUM – $1.1 trillion)
  • Rank # 14: UBS, Switzerland (AUM – $1.1 trillion)
  • Rank # 13: Prudential Financial, USA (AUM – $1.2 trillion)
  • Rank # 12: BNP Paribas, France (AUM – $1.2 trillion)
  • Rank # 11: Deutsche Bank, Germany (AUM – $1.2 trillion)
  • Rank # 10: Goldman Sachs Group, USA (AUM – $1.3 trillion)
  • Rank # 9: Capital Group, USA (AUM – $1.4 trillion)
  • Rank # 8: AXA Group, France (AUM – $1.5 trillion)
  • Rank # 7: Bank of New York Mellon, USA (AUM – $1.6 trillion)
  • Rank # 6:P. Morgan Chase, USA (AUM – $1.7 trillion)
  • Rank # 5: Allianz Group, Germany (AUM – $1.9 trillion)
  • Rank # 4: Fidelity Investments, USA (AUM – $2 trillion)
  • Rank # 3: State Street Global, USA (AUM – $2.2 trillion)
  • Rank # 2: Vanguard Group, USA (AUM – $3.4 trillion)
  • Rank # 1: BlackRock, USA (AUM – $4.6 trillion)

In the final analysis

Getting into asset management is NOT easy. Only two can get you into asset management – first, the required skills and a burning desire to make it to the top.

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Comments

  1. Shashi Bhansali says

    Very good summarised knowledge.

    • Dheeraj Vaidya says

      thanks Shashi!

  2. Gautam Mohan says

    Thanks a lot for this article DV. This article has certainly given me some insights into the world of AM.

    I like all your articles.

    • Dheeraj Vaidya says

      thanks Gautam!

  3. Roger Orsini says

    Excellent discussion as usual.
    Well laid out from beginning to end.
    Thanks,
    Roger A. Orsini, MD/MBA/FACS

    • Dheeraj Vaidya says

      thanks Roger!