What Does an Investment Manager Do? And How To Become One

By Indeed Editorial Team

Updated 19 October 2022

Published 11 October 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Investment managers oversee investment portfolios on behalf of individual and institutional clients. These professionals manage every aspect of clients' investments, from recommending trading strategies, monitoring performance to buying and selling of assets in portfolios. Understanding the duties and responsibilities of investment managers and the entry requirements for the profession can help you decide whether to choose it as a career. In this article, we define the role an investment manager and their duties, qualifications and salary.

What does an investment manager do?

It's important to answer 'what does an investment manager do?' when considering jobs in the financial sector. The primary duty of an investment manager is to ensure that investment portfolios perform according to the clients' objectives. They help clients reduce risk, maximise profits and cut losses. Here are some of the duties and responsibilities of this role:

  • identifying assets to include in clients' portfolios

  • advising clients about the ideal time to buy or sell assets in their investment portfolios

  • buying and selling assets in clients' portfolios to achieve specific investment objectives or implement investment strategies

  • overseeing portfolio and asset management responsibilities throughout the investment period

  • creating and developing sound investment management strategies to help clients minimise risk and maximise profits

  • supervising a team of financial analysts and client accounts

  • developing investment policy statements highlighting the client's long-term investment objectives

  • studying and analysing market trends and trading behaviour to create successful investment portfolios

  • tracking the performance of investment portfolios based on clients' investment objectives

  • enforcing compliance with regulatory and legal compliance, including adherence to anti-money laundering laws, know your customer requirements and anti-fraud protocols

  • meeting with other investment management professionals to improve processes and procedures

  • prospecting for new clients and delivering excellent customer service to existing ones

  • providing advisory services and helping clients to vet new investment opportunities

  • engaging in continuous professional development in the investment industry and the wider economy

Related: What Does an Equity Research Analyst Do? Skills and FAQs

What is an investment manager?

An investment manager is a professional in the financial services industry who oversees the investments of private clients or financial institutions. The investment manager advises clients on the assets to invest in and the best time to sell to make profit, spread risk or reduce losses. They develop investment strategies, evaluate the risks associated with assets and trades, analyse market trends and compile reports on their findings. These professionals can work in investment management companies and typically charge fees based on the percentage of clients' assets under their management.

Related: What Is an Investment Banker and How To Be One

How to become an investment manager

Follow these five steps to become an investment manager:

1. Earn a bachelor's degree

The first step to becoming an investment manager is to earn a bachelor's degree in accounting, business management, economics, finance, statistics or any other relevant disciplines. These courses provide prospective investment banking candidates a strong foundation in business and investment practices they may encounter on the job. While most entry-level financial analyst roles that lead to an investment manager position typically consider candidates with a bachelor's degree, some employers may look for a master's degree.

2. Get a master's degree

After your bachelor's degree, you can consider getting a master's degree to improve your chances of employment, although some disciplines may require a specific number of years of work experience for admission. Master's degree programmes in core specialist areas such as risk management, business administration, financial regulations, investment evaluation and money laundering can give you in-demand competencies that can make you attractive to employers. Besides improving your employment chances, a master's degree can also enhance your career mobility by making you more qualified for leadership roles.

3. Get a financial analyst position

Becoming an investment manager first involves working in a financial analyst role. You can also enter the profession as an investment adviser and other related positions. Working in these roles allows you to gain industry experience and develop the skills required in an investment manager's role.

4. Become a representative

Investment managers and other professionals in the capital market require a designation of representative from the Monetary Authority of Singapore (MAS) to provide investment management services. The MAS requires candidates to pass modules 3 and 6 of the Capital Markets and Financial Advisory Services (CFMAS) exams and be at least 21 years old. You also require a minimum of three years of work experience to qualify to become a representative.

5. Continue professional development

Once you become a representative and have the authorisation to manage client assets, it's important to invest in professional development. The investment management landscape is dynamic, with new regulatory requirements and technologies emerging regularly. To stay relevant and competitive in the industry, it's vital to stay ahead of market and industry trends.

Related: How To Become an Investment Analyst: A Step-By-Step Guide

What is the salary of an investment manager?

An investment manager can make an average salary of $126,931 per year. Several factors can determine pay, including the size of the employer, location, assets under management, qualifications, experience and specific job duties and responsibilities. Having an advanced degree in areas such as risk management and earning respected professional credentials can improve your earning potential.

Related: How Much Does an Investment Banker Make? (With Job Duties)

What is the work environment of an investment manager?

Investment managers typically work in comfortable offices where they lead a team of financial analysts. You can find them in banks, investment companies, insurance companies, hedge funds and other related entities. While they spend most of their time indoors, investment managers' work may involve going to visit clients' offices or meeting with prospects in public spaces such as restaurants. They may also travel outside of their office premises to meet staff members in other regions.

Related: How To Become a Hedge Fund Manager (With Skills and Tips)

What are the professional credentials investment bankers can pursue?

There are several aspects of investment management from which professionals can pursue industry-related credentials. A respected credential you can get is the Chartered Financial Analyst (CFA). Investment managers can also get the Certified Management Accountant (CMA), Certified Investment Management Analyst (CIMA) and Chartered Investment Counselor (CIC) certifications. A master's of business administration that focuses on risk assessment and management, financial modelling and deal assessment can also improve your professional standing in the investment management industry.

Related: Q&A: Why Pursue a Career in Wealth Management? (Plus Salary)

What are the skills to excel as an investment manager?

Investment management is a high-stakes role that involves making weighty decisions about clients' investments. Here are some skills that can improve your success in the role:

Communication

Investment management involves leading financial analysts and working with other senior investment professionals and clients. The role also requires collaborating with industry regulators and other stakeholders, such as shareholders of companies under management. To thrive while working closely with so many people with differing priorities, it's essential to possess excellent communication skills. Besides being proficient in speaking and writing, investment managers also require exceptional active listening and presentation skills and the ability to read people's body language.

Analysis

Investment managers require a high degree of analytical skills because most of their actions and decisions are data based. Excellent analytical skills can help make them sense of the research compiled by financial analysts. It also makes it easier to make connections and draw actionable insights from available data points about investment options.

Perseverance

An investment manager's schedule is heavy, with long workdays and even weekends, depending on the trade volume. These professionals make last-minute investment decisions based on the slightest fluctuations in the market to protect investors' assets. Succeeding in this role not only requires industry knowledge, it also requires tenacity and a high level of motivation.

Decision making

The best investment managers are excellent decision makers. Once they have all the data and research to support an action, they're decisive in pursuing a position. Even though no amount of research can provide certainty on any investment decision, effective investment managers trust their sense of judgement.

Anticipation

Effective investment managers are adept at reading the moves of the market and anticipating the trajectory of asset classes of interest. Using a wide range of information sources, from news articles to political and social developments around the world, seasoned investment managers can predict to a large degree the impact of major events on the financial markets and their clients' portfolios. They use this knowledge to move fast and take action to either make gains or reduce their clients' risk exposure.

Cool temperament

In the investment management industry, it's essential to keep emotions or sentiments under control and to prevent them from influencing investment decisions. Regardless of the turbulence in the market, effective investment managers can detach themselves from the confusion and noise to make sound decisions. This is why they rely on thorough market analysis, experience and sometimes, intuition when making decisive moves.

Critical thinking

Investment managers deal with a large amount of information every day. Making sense of such a deluge of data points requires the ability to think critically. To succeed at this job, it's important to be able to form a broad picture based on available data before making a judgment call.

Salary figures reflect data listed on Indeed Salaries at time of writing. Salaries may vary depending on the hiring organisation and a candidate's experience, academic background and location. Please note that none of the companies mentioned in this article are affiliated with Indeed.

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