There is little doubt that there has been a recent move of people out of investment banking. The pay in that industry has been dropping, and people naturally want more secure positions and financially secure income. Many of them are headed into the asset management companies, who are more than glad to hire them.
A powerful advantage of the asset management field is that changes in the economy are less likely to affect them than it would affect those in investment banking. The reason for this is that in any economy, good or bad, people will always want someone to grow their assets. This means a more constant flow of money into an asset management company even in rough economic times.
The benefits of working in asset management
Getting a job in asset management is similar to what investment banking once had promised. At the present time, it offers:
- Greater job security – the need for asset managers continues to grow, and some companies are looking to hire asset managers, or people with transferable skills, by the handful.
- Larger income – while the income of the staff in investment banking is dwindling, those involved in asset management find their salaries are growing to quite nice figures.
- More power to make investment decisions – working in an investment company means making decisions as a group. Once an asset manager develops their skills, they often will make the decisions on their own.
- Learning where the money is being made – once you know where the money is flowing, you can tap into that stream yourself.
- An upward career path – there are several levels of asset management that a committed individual can take. Once at the top, there can also be moves to larger companies.
What is asset management?
In the more common way of thinking, asset management specializes in the handling of client’s assets with the overall goal to increase them. The more you know, the more you can help a client. It means moving the client’s money and assets from one fund that is not producing within expected parameters, to one that is able to generate the desired profit. This is an ongoing process to ensure a more or less constant growth of the financial assets.
In some circles, however, asset management has grown to include real estate. When real estate asset management is involved, there is a much wider range of responsibilities. Now, the client may actually have the asset manager be responsible to turn a piece of real estate property into a viable source of income. Generally, this will involve not merely the handling of the finances, but may even mean being responsible to upgrade the property, fix renter’s maintenance problems, evict people, etc.
What does this job involve?
Working in asset management means that an individual will start by working as a team member. The individual would be responsible to investigate and learn about specific areas of investments to start, and doing accounting work. It involves studying the market, researching companies and investments, tracking assets, having traders carry out the orders, etc.
Analysts will be divided into either buy-side or sell-side. Sell-side analysts deal more with the public and need to have good skills in communication and must make presentations. Going up one level is the portfolio manager. This individual makes the decisions about what stocks are going to go into a portfolio – and which ones get dropped.
An example of a successful financial asset manager is Jezri Mohideen. He currently works as a Senior Advisor for the Banner Asset Management company, which is an Australian firm. He believes that a truly diversified portfolio is one that has four aspects: securities, bonds, real estate, and short-term bank deposits and T-notes.
How do you get into asset management?
- Get a Degree in Finances: this reveals a lot to someone who is looking to hire someone in this field. They want to know you have the training and the interest in working with numbers. Having a master’s degree in Business Administration with a specialization in finances will help a lot.
- Consider Starting in Investment Banking: this approach may seem a little odd in this article, but there are many more openings in the investment banking field. It would also be a good introduction to the field of investing and could easily open the door to an asset management position.
- Take Entry Level Positions: two positions may be available to get started in asset management. Both of them require a BA or BS degree, preferably in accounting. A Fund Accountant or a Junior Research Analyst are two positions that you may be able to start at in a company.
Getting into the field of asset management continues to look like a very promising job field for years to come. The pay is excellent, and taking the time to get the right preparation will help ensure you get into the field of your dreams.