Posted By: Kaplan Schweser
Updated: November 21, 2019
If you would like to help others discover the best ways to get substantial returns on their nest eggs, are intrigued by analyzing risk, or are interested in helping businesses buy other businesses, consider a career in investment management. Contrary to popular film and fiction, this career does not limit you to pin-striped suits and high-pressure deals on the floor of a noisy, crammed trading room. You have plenty of opportunities to avoid stock exchanges (unless that’s where you want to be). If this intrigues you, here are 7 reasons to pursue an investment management career.
The investment management field is wide and varied. You can find jobs in banks, brokerage firms, credit unions, and insurance companies. You can be a financial analyst, fund manager, portfolio manager, risk manager, hedge fund manager, alternative investment analyst, stockbroker, risk analyst, ratings analyst, private equity associate, and more. You can choose to manage the investments of individuals or businesses. With the right education and knowledge, there is also the opportunity to join well-known financial institutions like Vanguard, JP Morgan Chase, Goldman Sachs, Citigroup, HSBC, Merrill Lynch, just to name a few. There are also ways you can work for yourself if you’re dedicated, realistic, and have enough experience with a finance employer first.
Investment managers give people and companies advice on what to do with their money. This involves a kind of detective work that will be different each time you do it as you match investments with your clients. One day you might be helping a fashion designer, and the next day, it’s a company that built an app to help disaster victims find relief and shelter. Every day is different. And, since investments can be affected by global events, extreme weather, and unpredictable things like human emotions, there is no time to be bored. You have to keep coming up with new and different investment strategies and ways to direct funds on behalf of clients.
The investment management profession offers some of the highest starting salaries in finance. For those who are talented and ambitious, there’s also a great deal of room for that salary to grow quickly. In the United States, Glassdoor reports that the annual salaries for investment managers range from $70,000 to just under $200,000 dollars. The U.S. Bureau of Labor Statistics (BLS) puts investment managers in the financial analyst category and reports that the median annual salary was $84,300 in 2017.
With so many different financial products and a growing need for people with in-depth knowledge of geographic regions, it’s no surprise that most industry analysts expect strong employment growth in the investment management field midway into the next decade. According to the BLS, employment in investment management is expected to grow 11 percent from 2016 to 2026. This jobs outlook is much brighter than the average for all occupations, especially if you happen to be tech-savvy. Competition will be fierce, but with the right education, you should be able to land a good entry-level investment position.
Are you in the process of earning, or do you already have, a bachelor of science (BS) in business administration, a BS in finance, or a related degree? If so, we have good news. Any of these degrees are all you need to get started in an investment management career. Also, earning a voluntary certification or charter such as the Chartered Financial Analyst® (CFA®) charter, the Chartered Alternative Investment AnalystSM (CAIA®) charter, or the Financial Risk Manager (FRM®) designation is a great way to augment your degree without going to graduate school. (If you’re curious about the differences between these designations, you can learn more in these articles about the CFA charter vs. the CAIA charter, the CAIA charter vs. FRM certification, and the FRM certification vs. the CFA charter.)
There’s a tendency to think that anyone who chooses to invest for individuals or businesses as a living is a numbers-cruncher. Numbers are definitely involved, but your main focus is investment portfolios, not equations and calculations. These portfolios should be as diverse as possible—comprised of lots of different businesses, projects, and sectors. Moreover, as we mentioned in reason #2, you have to tailor these portfolios to the needs, passions, and beliefs of your clients. In other words, investment management offers you remarkably rewarding opportunities to develop and innovate, delivering solutions that make a true difference in either the lives of individuals or in the way business and capital move forward.
A great deal of what investment managers do involves solving problems. With each resolution and discovery, there’s satisfaction. Think of how it would feel to know that you recommended something that made money for one of your clients. Not only is there the knowledge that they benefited from your decision, but there’s the joy of knowing that after a lot of research and detective work, you picked a winner. Now imagine how it would feel to do that consistently over time. Of course, you won’t get it right every time. But even then, being wrong in investment management brings experience and expertise. If you think about it, that’s another type of satisfaction—having learned a lesson well.
Are your ready to learn more about this fascinating and satisfying career? If you think that a career in investment management is right for you, check out these resources that can help you get started.