With the growth of global financial markets, investment managers have become increasingly important for helping individuals and institutions invest their capital wisely. However, many people wonder whether being an investment manager is a good career path. Here we analyze the pros and cons of this career path.
Investment managers earn high compensation with performance bonuses
Investment managers can earn very high compensation, often receiving a percentage of assets under management as well as performance bonuses. Top performing investment managers at large funds can make millions per year. The high earning potential makes it lucrative for talented professionals.
Investment management offers intellectual challenge and excitement
Investment managers get to analyze markets daily, meeting with management teams and financial experts. They enjoy the intellectual stimulation of identifying investment opportunities and the excitement of watching their decisions play out. Many find the work fulfilling.
Great career advancement and leadership opportunities
Investment managers with a strong track record of returns can advance to lead large funds or start their own asset management firms. Successful managers develop expertise and connections to eventually lead large investment teams.
Pressure to perform can be intense
While the rewards are high, the pressure to generate returns is also intense. Lagging performance versus benchmarks or competitors leads to asset withdrawals and lower compensation. Investment managers need to be able to handle volatility and uncertainty.
Regulations and liability create challenges
Investment managers must comply with complex regulations for client dealings, reporting and ethical conduct. Lawsuits can occur despite disclaimers, so liability management is key. Ongoing education on regulations is critical to avoid infractions.
In summary, a career as an investment manager offers the upside of high compensation, intellectual challenge, and leadership opportunities but also exposes professionals to intense performance pressure, regulations, and liability risks.