How to Become a Portfolio Manager
Portfolio management is a core topic in the CFA® Program curriculum, so it’s not surprising that “portfolio manager” is one of the most common roles for CFA® charterholders. Although portfolio manager is typically not an entry-level position, some portfolio manager roles begin at the associate level (with only a few years of relevant experience required) and contribute analysis and research to the investment decision-making process. At the mid-senior level, portfolio management roles often involve directing a team of investment professionals or a larger portfolio of assets. In addition, many private wealth management firms employ portfolio managers who work directly with individual clients or provide support for client-facing advisors. The portfolio manager track can lead to management positions with broader responsibilities, such as a managing director or head of portfolio management. Senior portfolio managers often report directly to a chief investment officer (CIO), which makes portfolio management a potential career path to an executive position in an organization, whether as a CIO or a similar executive function with higher-level responsibility for the investment process.
Is Portfolio Management Right for Me?
Practitioners typically go into investment-decision making roles after several years working as an analyst. If you like generating investment ideas, developing and implementing investment strategy, can manage risk, and can remain resilient and decisive when faced with potential underperformance and poorly performing financial markets, this role could be right for you.
Key Skills for Portfolio Managers
Succeeding as a portfolio manager and in investment decision-making roles requires key skills in three areas:
- Investment strategy and process
- Portfolio construction and execution
- Performance measurement and risk management
QualificationsTypically, a portfolio manager holds a Bachelor’s degree in finance or a related field. To showcase proficiency in a relevant interdisciplinary field, coursework should demonstrate a mastery of information, love of reading, conceptual thinking, and idea generation. Employers also frequently give priority to candidates with the CFA designation as they have demonstrated a mastery in investment management.
Typical Portfolio Manager SalaryAccording to a 2019 CFA Institute compensation study of charterholders and members, portfolio managers reported a typical, global total compensation of US$177,000 (US$126,000 base salary).
Other Possible Career Tracks in Investment Decision-Making
Throughout the investment industry, regardless of the industry sector or the type of firm, investment decision-makers are the ones who determine what funds and assets to buy and sell and when. Their approach to building portfolios and resource allocation will usually depend on their firm, their clients, and the financial goals the portfolio is trying to achieve. Managers typically start their careers in financial analyst roles. Other types of decision-making roles include:
How Can the CFA Program Help Me?
Investment professionals looking for portfolio manager roles need to demonstrate mastery of in-depth investment knowledge, which is exactly what the CFA® Program curriculum is designed to provide. Moreover, because portfolio managers are in demand around the world, the global reputation of the CFA charter as the “gold standard” for investment credentials can help open professional opportunities with financial institutions in diverse markets around the world.