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How to Become a Portfolio Manager

How to Build a Successful Career in Portfolio Management

Before we get into how to become a portfolio manager, we need to understand that the global wealth management industry is highly volatile due to global economic changes, technological advancements, evolving consumer behavior, and the constant need for innovation. As a result, companies have to prepare effective investment strategies and wisely allocate their funds to ensure growth. Companies hire investment professionals called ‘portfolio managers’ to prepare investment strategies and manage their assets. This blog shows you how to become a portfolio manager, and whether it is a challenging career.

How to Become a Portfolio Manager

What Does a Portfolio Manager do?

Portfolio managers are executive-level professionals who make core investment-driven decisions for an individual or an organization. They prepare investment strategies and manage clients’ investment portfolios.

Portfolio Manager Skills

The straightforward answer to how to become a portfolio manager is to learn the most sought-after finance and investment skills. Here’s a list of popular skills that will be relevant for investment professionals over the next decade. They can be divided into four broad categories:

Technical Skills

  • Foundational investment skills that include financial analytics, portfolio management applications, and asset classes
  • Solution-driven skills like understanding clients’ investment goals and building portfolios
  • Finance and economics
  • Environmental, social, and governance (ESG) analysis skills

Leadership Skills

  • Decision-making 
  • Ability to foster a culture of ethics at an organization
  • Crisis management
  • Articulating a mission and vision for investment decisions

Soft Skills

  • Creativity and innovation
  • Communication
  • Self-awareness
  • Empathy and the ability to build human relationships

Interdisciplinary Skills

  • Adaptability to coordinate with various departments
  • Extensive knowledge of various disciplines like finance and business management
  • Strong networking skills

Roles and Responsibilities

The most popular roles in portfolio management are commercial portfolio manager, credit portfolio manager, wealth manager, and investment manager. The core responsibilities of portfolio managers include:

  • Communicating with clients and helping them develop investment objectives 
  • Understanding clients’ investment goals and financial resources 
  • Managing equity and bond portfolios to ensure stable returns and minimize risk
  • Preparing investment reports on the performance of different portfolios 

Steps to Become a Portfolio Manager

Portfolio management is a leadership-level role that requires over five years of experience as a finance analyst or associate and extensive knowledge of finance and investment trends. Here is a step-by-step process on how to become a portfolio manager.

Step 1: Get a Bachelor’s Degree in Finance

As portfolio management is primarily concerned with wealth management and investment strategies, the first step in your journey on how to become a portfolio manager is to get a degree in finance. A Bachelor’s Degree in Economics or Business Administration will also do.

Step 2: Apply for Financial Analyst Jobs

You can join an asset management or portfolio management company after completing your bachelor’s degree and work your way up the ladder to become a portfolio manager. 

ALSO READ: What is Asset Management? Does it Ensure Business Growth?

Step 3: Learn In-Demand Portfolio Management Skills

Out of all the portfolio management skills mentioned above, creativity and innovation, interdisciplinary skills, empathy and relationship-building, self-awareness, and communication skills are the most sought-after and rare to find.

Step 4: Learn Advanced Financial Concepts

One of the key responsibilities of portfolio managers is the management of financial assets. Therefore, extensive knowledge of advanced financial concepts like risk management, compounding, cost ratio, and more is greatly desired. You can pursue a Master’s Degree in Finance to gain more knowledge. Emeritus’ online finance courses can also help you learn essential finance strategies and concepts.

Step 5: Get the Required Licenses and Certifications

According to LinkedIn, companies prefer hiring portfolio managers who have professional certifications like the Chartered Financial Analyst (CFA) certification or Certified Financial Planner (CFP) certification awarded by the CFP Board. In addition to this, professional licenses issued by national agencies in the U.S. like the Financial Industry Regulatory Authority (FINRA) are also beneficial.

Step 6: Join Professional Finance Associations

If you want to become a portfolio manager for assets under management (AUM) that are worth millions, registration with the U.S. Securities and Exchange Commission can be beneficial for your candidature.

Step 7: Apply for Portfolio Management Jobs

You can also become an associate portfolio manager after two to three years of experience as a financial analyst, wherein you can assist senior portfolio managers in market research. After a few years of experience, you can get promoted to a senior portfolio manager role where you will have to manage portfolios and a team of portfolio managers independently. Soon, you can move on to become the head of portfolio management too. You can further work as an independent portfolio manager for large companies.

The Career Outlook of Portfolio Managers

According to the Investment Professional of the Future Report by the CFA Institute, core investment management roles, which include portfolio management, are likely to grow by 9% in the U.S. by 2029, leading to an increase in employment opportunities for portfolio managers.

Portfolio Manager Job Description

Rapidly changing trends in the investment industry have made it critical for portfolio managers to focus on new-era skills like technology and leadership. Portfolio managers these days prioritize risk optimization, sustainability, data interpretation, and alternative investment skills.

In addition to this, companies are showing more interest in hiring professionals with excellent decision-making skills who have core expertise in investment strategy and portfolio construction. 

Portfolio Manager Salary (Freshers, Seniors, Experts)

The average salary of entry-level portfolio managers in the U.S. is $80,648 per year. Senior-level portfolio managers have an average base salary of $126,148 per year. Expert portfolio managers or portfolio specialists in the U.S. earn up to $170,000 per year.

Top Hiring Locations

The top locations in the U.S. with the highest number of finance jobs are New York, Dallas, Iowa, Jacksonville, California, Connecticut, Washington, California, Massachusetts, Delaware, and New Jersey. The following are the top locations in the U.S. that offer the highest salaries to portfolio managers.

Location  Average Annual Salary
New York $126,306
Atlanta  $115,020
Chicago $109,889
Austin $96,249

Top Companies That are Hiring Portfolio Managers

Here are the top asset management companies in the U.S. hiring portfolio managers and financial analysts.

  • BlackRock
  • The Vanguard Group
  • State Street Global Advisors 
  • Fidelity Management and Research
  • J.P. Morgan
  • Wells Fargo
  • Citi Group
  • Bank of America
  • Goldman Sachs
  • Morgan Stanley

Is it Hard to Get Into Portfolio Management?

Portfolio management is no longer a conservative job role that requires expertise only in finance. Nearly 40% of portfolio managers believe their roles and responsibilities will change drastically over the next decade.

Recent trends suggest that companies also leverage technologies like machine learning and artificial intelligence for portfolio construction. Therefore, portfolio managers will have to ultimately learn these technologies to keep up with the changing dynamics and find better career opportunities. These trends have made it quite hard to build a career in portfolio management. However, having the right attitude, skills, and ability to take risks can help advance your career in this space.

Emeritus offers online leadership courses that could help you gain the required skills and job insights into how to become a portfolio manager. Check out these courses today!

By Sneha Chugh

Write to us at content@emeritus.org

How to Become a Portfolio Manager

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