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Asset Manager

While portfolio managers solely handle their clients’ financial investments, asset managers manage a broader range of holdings on behalf of their clients, which can include individuals, corporations, institutions, pension funds, and governments. These professionals manage everything with monetary value, not only investments such as securities, mutual funds, exchange-traded funds (ETFs), and other financial instruments, but also cash and other tangible assets like land, property, and items of value.

Asset managers, it might be said, take a holistic view of the financial, investment, and personal net worth landscape. Their focus is on coordinating all resources owned by their client that should provide a future benefit. And their goal is to maximize the returns from the pool of those resources.

Duties and Responsibilities
The specific duties of an asset manager can vary depending on the client's investment objectives, the types of assets being managed, and the asset manager's investment strategy. However, some general responsibilities of an asset manager include:

• Analyzing client financial statements
• Conducting research and analysis to identify investment opportunities and make informed investment decisions
• Collaborating with research analysts
• Developing investment strategies and asset allocation plans that align with the client's investment objectives
• Monitoring market trends and economic indicators to adjust investment strategies as needed
• Maintaining a diversified portfolio of assets to manage risk and maximize returns
• Evaluating the performance of investments and making recommendations to buy, hold, or sell assets
• Communicating with clients to provide updates on investment performance, market conditions, and investment strategies
• Ensuring compliance with regulatory requirements and ethical standards
• Managing investment operations such as trade execution, settlement, and custodial services

To get a clear sense of the potential scope of the asset manager’s job, let’s take a look at the wide range of assets that they may be responsible for managing, buying, and/or selling:

Tangible assets are physical and measurable assets. They include:

• Land
• Vehicles
• Equipment
• Machinery
• Furniture
• Art
• Jewelry
• Inventory
• Securities like stocks, bonds, and cash

Intangible assets are typically non-physical assets, which can be far more valuable than tangible assets. They are often intellectual assets, and as a result, it can sometimes be difficult to assign a value to them because of the uncertainty of future benefits. The following are examples of intangible assets:

• Patents, which provide property rights to an inventor
• Trademarks, which are recognizable phrases or symbols that denote a specific product and differentiate a company
• Franchises, which are a type of license that a party (franchisee) buys to allow them to have access to a company’s brand and sell goods under their name
• Goodwill, which represents anything above and beyond the net value of the target company’s identifiable assets that another company pays to acquire them
• Copyrights, which represent intellectual property that is protected from being duplicated by non-authorized parties

Intangible assets may also include internet domain names, performance events, licensing agreement, service contracts, computer software, blueprints, manuscripts, joint ventures, medical records, permits, and trade secrets.

Types of Asset Managers
As demonstrated above, asset managers can be tasked with managing an especially wide range of assets. On the other hand, they may choose to specialize and focus on a particular kind of asset. Here is a snapshot of the most common types of asset managers:

• Equity Asset Managers specialize in managing equity investments such as stocks and shares.
• Fixed Income Asset Managers specialize in managing fixed income investments such as bonds and other debt securities.
• Real Estate Asset Managers specialize in managing real estate investments such as commercial properties, residential properties, and real estate investment trusts (REITs).
• Alternative Asset Managers specialize in managing alternative investments such as private equity, hedge funds, commodities, and infrastructure.
• Multi-Asset Managers specialize in managing portfolios that contain a mix of different types of assets, such as equities, fixed income, and alternative investments.
• Private Wealth Managers work with high-net-worth individuals and families to manage their investments and provide financial planning services.
• Institutional Asset Managers work with large institutions such as pension funds, endowments, and foundations to manage their investments.
• Digital Asset Managers manage non-financial assets in digital form, such as images, videos, documents, and multimedia content.

Asset managers may differentiate themselves further by specializing in even more targeted services. Here are some examples:

• Sustainable investing – Asset managers that specialize in sustainable investing incorporate environmental, social, and governance (ESG) factors into their investment decisions to promote sustainability and social responsibility.
• Emerging markets – Asset managers that specialize in emerging markets invest in securities in developing countries, which can provide higher returns but also come with higher risks.
• Factor-based investing – Asset managers that specialize in factor-based investing use quantitative models to identify and invest in securities that exhibit specific characteristics, such as low volatility or high dividends.
• Risk management – Asset managers that specialize in risk management use sophisticated models to identify, measure, and manage investment risks to help clients minimize losses and protect their investments.

workplace of an Asset Manager

Asset managers can be employed by a wide range of organizations that require investment expertise to manage their assets and investments:

• Investment management firms – These firms specialize in managing investments and assets on behalf of clients, and typically employ a range of asset managers with different specializations.
• Banks – Many banks have asset management divisions that offer financial services to clients, and employ asset managers to manage investments and other assets.
• Insurance companies – Insurance companies may employ asset managers to manage large investment/asset portfolios that support their business operations.
• Pension funds – Pension funds employ asset managers to manage their investment/asset portfolios and ensure that they are meeting their long-term funding goals.
• Endowments and foundations – These organizations typically have large investment/asset portfolios that support their charitable or philanthropic activities, and may employ asset managers to manage those portfolios.
• Governments – Governments may employ asset managers to manage funds such as sovereign wealth funds or public pension funds within their investment/asset portfolios.

Asset managers typically work in offices, in a professional setting that is conducive to making investment and asset allocation decisions. The asset management environment is intellectually stimulating and fast-paced, and generally involves long hours of research and analysis.

How to become an Asset Manager

Becoming an asset manager typically requires a combination of education, experience, and professional certifications. Here is a snapshot of the pathway to the career:

Bachelor’s Degree
Asset managers typically hold a Bachelor's Degree in Finance, Accounting, Economics, or a related field, such as business administration or international business.

Individuals seeking a career in asset management should choose a program that provides a solid foundation in financial analysis, asset allocation, and accounting.

Some asset managers may hold a degree in a field such as engineering or mathematics, or computer science, especially if they specialize in quantitative investment analysis.

Some schools offer certificates and/or distinct degrees in asset management.

Work Experience
Aspiring asset managers usually need to gain relevant work experience in finance or investment management. This could involve working as a financial analyst, investment advisor, or in a related role such as banking or accounting.

Professional Organizations and Certifications
As the field of finance and asset management is constantly evolving, it is important to stay up to date with the latest technologies, industry developments, and best practices. Several industry organizations provide advocacy efforts, access to professional events, continuing education opportunities, and industry research and resources, as well as a network of like-minded professionals working in the field.

Many asset managers hold professional certifications offered by these organizations, which demonstrate expertise in financial planning and investment management, as well as a commitment to ongoing education and professional development. While they are voluntary, some companies may stipulate one or more of these certifications, described below, as a condition of employment, particularly in more senior roles.

• Certified Financial Planner (CFP) – The CFP certification is offered by the Certified Financial Planner Board of Standards, and requires candidates to have at least three years of professional experience and complete a rigorous course of study in financial planning. The certification program covers a wide range of financial planning topics, including investments, taxes, retirement planning, and estate planning.
• Chartered Financial Analyst (CFA) – Offered by the CFA Institute, the CFA designation is a globally recognized certification program for investment professionals. It requires passing three levels of exams covering topics such as ethics, investment tools, portfolio management, economics, and financial statement analysis, and requires several years of work experience in investment management.
• Certified Investment Management Analyst (CIMA) – The CIMA designation is offered by the Investment Management Consultants Association (IMCA). It requires passing an exam covering topics such as asset allocation, risk management, and investment strategies, as well as meeting other requirements such as work experience and education.
• Chartered Alternative Investment Analyst (CAIA) – The CAIA designation is designed for professionals who specialize in alternative investments such as private equity, hedge funds, and real estate. It requires passing two levels of exams covering topics such as asset allocation, risk management, and alternative investment strategies.
• Financial Risk Manager (FRM) – The FRM certification is awarded by the Global Association of Risk Professionals (GARP) and demonstrates expertise in risk management, including financial risk assessment, quantitative analysis, and risk mitigation strategies. The program consists of two levels of exams and requires candidates to have at least two years of relevant work experience.

Other bodies supporting the asset management industry include the National Association of Active Investment Managers (NAAIM), the Financial Planning Association (FPA), the National Association of Personal Financial Advisors (NAPFA), and the Association for Financial Counseling and Planning Education (AFCPE).

Networking
Networking is particularly important in the field of asset management, as many asset managers rely on referrals from existing clients to grow their businesses. Building a network of contacts often starts by attending industry events and joining organizations for finance and business professionals.

Advanced Education
While not always required, pursuing an advanced degree such as a Master of Asset Management, Master of Business Administration (MBA) or Master of Finance (MFin) can be helpful when seeking employment as an asset manager.

key skills that all asset managers need to have

Analytical skills

Top-notch analytical skills are necessary for an asset manager. They need to make accurate assessments of potential investments, analyse market trends and predict future changes based on complex data. A thorough understanding of financial reports and economic indicators is indispensable for making informed decisions.

Communication skills

As an asset manager, you should have excellent communication skills. You will need to frequently interact with clients, explain investment strategies and relay complex financial information in an understandable manner. Moreover, you should be able to tactfully negotiate and strongly advocate for your clients' financial interests.

Knowledge of finance and economics

An expansive knowledge base in finance and economics is imperative for an asset manager. In this role, you should possess an understanding of money markets, securities, trading and financial laws and regulations. Also, your ability to interpret financial reports and data feed will prove invaluable to excel as an asset manager.

Attention to detail

An asset manager should have meticulous attention to detail. Even a minor detail in a financial report or economic indicator could significantly impact a client's investment portfolio. Therefore, being able to thoroughly dissect and analyse financial documents is a fundamental skill for an asset manager.