The salary for portfolio manager is worth considering when thinking about a career in the financial world. The acquisition of significant training, certification, or a designation, in addition to a conventional higher education, are all necessities for a career in portfolio management; thus, compensation for the position are among the highest in the industry. According to Glassdoor, the national average yearly base compensation for a portfolio manager in the United States as of October 2020 was $81,461. However, according to the Bureau of Labor Statistics, the average income for portfolio managers in the United States in May 2019 was $94,160 per year.
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This compensation typically takes the form of an assets under management fee (AUM fee) for each investor client. This type of fee can result in a considerable rise in overall compensation when a client base expands and investment accounts perform well.
Salary For Portfolio Manager: Job Duties
Portfolio managers are largely accountable for developing and overseeing private clients’ investment allocations in their respective portfolios. While some portfolio managers prefer to engage with private clients such as individuals and families, others are more interested in working with institutional or corporate investors. In the vast majority of instances, in order to accomplish the investment goals of a client, a portfolio manager will adhere to an investment strategy that has been set and is outlined in an investment policy statement (IPS).
While some portfolio managers are responsible for developing the investment packages that are sold to customers, others focus solely on managing the clients’ transactions and expectations. For the purpose of adhering to a predetermined investment plan or goal throughout the course of time, portfolio managers are required to buy and sell stocks on an investor’s behalf.
Salary For Portfolio Manager: Education/Training
A minimum of a bachelor’s degree in business, economics, or finance is often required for portfolio management. The majority of financial institutions demand previous expertise in the investment or financial services industry, with a particular emphasis on the provision of portfolio recommendations to customers or in-depth financial or market analysis.
Additionally, portfolio managers are required to hold the appropriate licenses issued by the Financial Industry Regulatory Authority (FINRA). Individuals who have obtained a FINRA Series 7 license are given the authority to buy and sell securities on the investor clients’ behalf. Additional authorization to provide recommendations and advise on investment accounts within the context of a fiduciary relationship can be obtained by passing the Series 66 exam, which is also referred to as the NASAA Uniform Combined State Law Examination.
It is common practice for FINRA to require additional licenses of portfolio managers who work exclusively with institutional clients or who serve in a supervisory capacity for other asset managers.
The vast majority of portfolio managers also hold at least one professional designation or certification in their field. The CFA (Chartered Financial Analyst) designation is one of the most well-known, well-respected, and commonly held designations. It provides a high level of training that marries academic theory with current practice and ethical standards in the field of investment analysis. In addition, it is one of the most common designations. 3 The Financial Risk Manager (FRM) accreditation is another one that is widely sought after by seasoned portfolio managers. 4 All FINRA licenses require continued participation in continuing education, as do professional designations in the sector.
The salary for portfolio manager also depends on having some important skills. Financial analysis involves being able to comprehend and analyze financial statements in order to arrive at appropriate investment choices.
Asset Allocation: Determine how your assets should be divided up across various investments in order to attain the optimal level of risk and return.
Risk management is keeping an eye out for potential dangers and taking steps to limit potential losses.
Evaluation of Performance: Conduct regular comparisons of portfolio performance to predetermined standards and objectives
Rebalancing means making any necessary changes to asset allocations in order to keep the appropriate risk and return profile.
In order to effectively manage a portfolio, one needs a high level of proficiency in data interpretation as well as a passion for doing research and analysis. In addition, a comprehensive knowledge of economics, financial markets, and portfolio theory is essential in order to be successful in this field over the course of one’s working life. Individuals need to have a strong focus on the customer experience, as well as a desire and the ability to interact often with investor clients about their accounts and the success of their investments.
In the same way that other job choices in the financial services sector do, portfolio managers are required to consistently prospect for new customers while also ensuring that their existing investors continue to have positive interactions with them.