How to Become a Portfolio Manager
One way to imagine the job of a portfolio manager is to picture an acrobat juggling five or six balls, taking great care to keep them all in the air. Becoming a portfolio manager involves integrating together (or juggling) multiple financial investments such as stocks, bonds, mutual funds, exchange-traded funds (ETFs), real estate, commodities, and alternative investments like private equity or hedge funds.
Earn a Bachelor’s Degree
As the manager of the wealth of individuals or institutions, you must have an educational background in a field such as finance, economics, accounting, mathematics, or business administration. Begin today by researching and studying different colleges and universities, and their reputations within the field of finance. Speak to admissions counselors and ascertain what your best route would be for earning your bachelor’s degree. You may find it advantageous to acquire your general education requirements at a community or junior college. Be sure to learn, however, which credits and from which junior/community colleges, will transfer to your intended degree-granting institution.
Become a Junior Financial Analyst
Since a portfolio manager is a top-tier position within any organization, you will have to begin your career as a junior financial analyst. Firms typically require new hires to have a bachelor’s degree in a finance related field, but you may be able to secure an internship while you are earning your degree. The skills you will develop as a junior financial analyst will provide you with a solid foundation upon which you can build a career as a portfolio manager. These skills involve becoming a proficient decision-maker, becoming detail oriented, developing superior communication skills, understanding market, economic, political and global trends, becoming adept at collecting and subsequently distilling large amounts of data, just to name a few.
Become Familiar with Online Portfolio Management Groups
Since portfolio management inv olves many types of investments, you will want to become familiar with the various trade and professional organizations which deal with each of the different aspects. Two examples are:
1. The Financial Planning Association (FPA) https://www.financialplanningassociation.org/
The Financial Planning Association is one of the most prominent trade associations for aspiring and established financial planners/portfolio managers. The FPA provides support in a myriad of ways including educational opportunities, workgroups, advocacy, and networking. There are retreats, conventions, live online events, knowledge circles, journal groups, and mentorship programs. At the center of the FPA is their core belief in certification and continuing education. Members can currently enroll in certifications courses such as cybersecurity, college planning, psychology, and elder planning. Continuing education courses are typically for 1 CE credit and have current topics such as Cash-Flow Crunch: Helping Your Clients Manage Their Cash Flow Better, Forging a New Era of Financial Planning: Embracing a Goals-Based Approach, and Investing in America’s Future: A Deep Dive Into How Investors Earn Up to 10.25% Fixed Returns in a Flexible, Secured, and Collateralized Portfolio.
2. The Chartered Alternative Investment Analyst Association (CAIA Association) https://caia.org/about-caia/
Founded by The Alternative Investment Management Association (AIMA) and The Center for International Securities and Derivatives Markets (CISDM), CAIA is a vital and extensive financial industry resource. According to the CAIA Association’s website, “The CAIA Association, a global professional body, pioneers a new era in investment management. At the forefront of the shifting of alternative investment asset classes from ‘alternative’ to mainstream, CAIA embraces diverse expertise and interdisciplinary knowledge essential for responsible capital allocation and client stewardship. A member-driven organization representing professionals in more than 100 countries, the organization seeks to prepare investors for a dynamic future, disrupting traditions, creating opportunities, and fostering long-term sustainability.” The CAIA currently has 13,000 members worldwide and 35 chapters. Members have extensive access to events (250 annually), academic and association partnerships (80), webcasts and webinars, newsletters, educational programs, and various diversified charters.
Job Outlook for Portfolio Managers
According to the U.S. Bureau of Labor Statistics (https://www.bls.gov/), Portfolio Managers have promising opportunities for the time period spanning 2022-2032. The field is growing by an impressive 16% per year, which is much faster than the 6% average growth rate. Government experts predict that each year over 69,600 openings will become available (between 2022-2032), due to replacing workers who leave the profession, leave the work force and/or retire. Over the ten-year time span (2022-2032) it is projected that a total of 126,600 new positions will be created. In 2022 there were 792,600 individuals working as portfolio managers. The median pay per year was $139,790, while the median hourly wage was $67.21. (As a reminder, the “median” amount is not an average, it is the middle value of a dataset. For the U.S. BLS definition go to: https://www.bls.gov/cps/definitions.htm#medianearnings) .
By pursuing your education, having experience as a junior financial analyst, networking with others in the field, and participating in continuing education, you will be well on your way to a lucrative and rewarding career as a portfolio manager.
