Avila Now

March 24, 2023

Careers in Finance: Asset Management

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Business discussion.

Are you interested in creating long-term wealth for yourself or your organization? Personal asset management can help you achieve your financial goals. Asset management professionals specialize in buying, holding, and trading investments like stocks, bonds, and funds that have the potential to grow in value over time. They work with clients of all net worth levels, from private individuals to public and private organizations. You may work with a portfolio manager, registered investment advisor, investment manager, wealth manager, or financial advisor to help grow and manage your assets. These professionals may work for investment banks or financial institutions or run independent practices.

A Day in the Life of an Asset Manager.

Picture a scene where a financial expert is sitting across from a client, eagerly seeking to understand their dreams and goals. After determining what level of risk the client is comfortable with, the expert immerses themselves in in-depth research and analysis, scanning both the tiny details and the grander market movements. Armed with this knowledge, they craft a portfolio personalized to fit each client’s unique needs, balancing conservative and aggressive investing strategies to maximize wealth accumulation over time. In this story, the expert’s singular focus is on helping their clients achieve their financial dreams, one personalized investment plan at a time.

Understanding risk tolerance is crucial when it comes to investing. As your client nears retirement or if they have specific goals in mind, you may become more cautious. However, if they have a longer investment horizon, you may be willing to take on more risk for greater rewards. It’s important to note that each individual account may require different management strategies, including more aggressive management of retirement accounts and conservative management of regular trading accounts. By knowing risk tolerance and you will create a personalized investment plan that aligns with their goals and comfort level.

Asset managers offer more than just investment strategies. They act as financial advisors, helping clients navigate the complex landscape of the market. By drawing on the expertise of sector specialists within their organization, asset managers provide clients with valuable insights into opportunities and risks. Once an investment strategy is agreed upon, managers take a hands-on approach to managing their client’s portfolios, adjusting and communicating regularly. And when exciting opportunities arise, like initial public offerings, they’ll inform their clients about how to get in on the action.

How do Asset Managers Get Compensated?

It all depends on the employer’s business model and the recommended securities used in their investing models. Compensation can come in various forms, such as active investment management fees, passive management fees on funds that mirror benchmarks, and brokerage trading fees. These fees are usually based on a percentage of assets under management, but some employers opt for flat fee structures. On top of that, there might be additional charges like annual account fees. As you can see, being an asset manager involves more than just investing; it also requires a thorough understanding of the industry’s compensation structures.

Types of Asset Managers

Registered investment advisers (RIAs) advise clients on investments, manage portfolios and advise on larger financial planning topics, including retirement, insurance, and estate planning. RIAs have a fiduciary duty to act in clients’ best interest and offer the lowest-cost products to meet clients’ needs. If they have more than $100 million in assets under management, they must register with the U.S. Securities and Exchange Commission (SEC) or state.

Investment brokers are investing intermediaries for their clients. Otherwise known as brokers/dealers, they hold custody of client portfolios and buy, hold, and sell stocks and securities. Depending on the employer’s policies, brokers may or may not have a fiduciary duty. If they do not have a fiduciary duty, they may offer investment advice that may fit client objectives but with higher commissions or fees than a fiduciary would be obligated to recommend.

Financial advisors are similar to investment brokers, with the role of recommending investments and buying and selling securities on clients’ behalf. They may or may not be fiduciaries. Financial advisors may or may not work for an institution and also offer general and specific financial advice for a fee.

Robo-advisors provide personal investment services through computer algorithms that analyze investment objectives, buy and sell securities according to programmed goals and risk levels and monitor and rebalance positions. The advantages of robo-advisors are affordability and consistency over time.

Becoming an Asset Manager

Are you interested in becoming a financial decision-maker who can make a real difference for clients? Avila University’s MBA program with a Finance concentration is an excellent opportunity. This IACBE-accredited program offers core courses in financial management and economics, along with specialized courses in areas like financial analysis, international finance, and financial markets and investments. With this well-rounded curriculum, graduates are fully prepared for successful careers in asset management and become true assets to their clients and organizations.

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