What does an investment manager do?

What Is an Investment Manager?

An investment manager is a person or organization that makes investment decisions about portfolios of securities on behalf of clients under the investment objectives and parameters the client has defined. An investment manager may handle all activities associated with the management of client portfolios, from day-to-day buying and selling of securities to portfolio monitoring, transaction settlement, performance measurement, and regulatory and client reporting.

Investment Manager Job Description Sample
Investment Manager Job Description Sample
This Investment Manager sample job description can be used to help you create a job advert that will attract candidates who are qualified for the job. Feel free to revise this job description to meet your specific job duties and job requirements.

Job Title: Investment Manager

Investment Manager Job Purpose
Provides investment information and financial advice; works with corporate and individual clients; and maintains knowledge of a wide range of investment and financial products, including trusts, stocks, bonds, and shares.

Investment Manager Job Duties

Engages in regular research and reading to stay apprised about the state of the UK economy, global financial markets, and general current events
Maintains current knowledge about financial products available to corporate and individual clients, including bonds, stocks, investments, and trusts
Works closely with investment analysts to assess financial information and investment opportunities
Presents investment opportunities and related analysis while pitching proposed course of action in meetings with clients
Uses complex financial models to project future earning and profit potential and uses this data to inform decisions and proposals
Makes decisions about financial and investment opportunities on behalf of clients
Meets with an investment team, including analysts and other managers, to stay up-to-date about market situations and company decisions that may impact one another
Takes on high levels of responsibility on behalf of financial institutions, corporate clients, investment organisations, and insurance companies
  • Develops relationships with clients and expands client network in professional and social settings
  • Specialises in a particular field or industry to aspire to achieve expert level knowledge

Investment Manager Skills and Qualifications

  • Bachelor's Degree in Finance or Master's Degree in Business Administration, Statistics, Economics, Mathematics, Accounting.
  • Decision Making
  • Problem Solving
  • Analytical Thinking
  • Verbal and Written Communication Skills
  • Organisation
  • Attention to Detail
  • Time Management
  • Multitasking
  • Working Under Pressure
  • Teamwork
  • Ambition
  • Leadership.

More On Investment fund manager job description

Investment fund managers provide financial advice and services to private and corporate clients about a range of investment matters, including buying and selling investment trusts and shares or bonds, to help these clients invest their money in the best places.

What does an investment fund manager do? Typical employers | Qualifications and Training | Key skills

Investment fund managers work very closely with investment analysts – fund managers make decisions about investments, while analysts provide them with financial information and recommendations that enable such decisions to be made.

Typical tasks include:

  • Regularly meeting with investment analysts and company managers to discuss financial matters
  • Researching companies
  • Gathering information
  • Reading financial briefings (often written by investment analysts)
  • Making informed financial recommendations and decisions
  • keeping knowledge up-to-date about the UK economy, current financial news and financial markets
  • Assessing and interpreting complicated financial information
  • Liaising with clients.
Investment work provides high levels of responsibility, good promotional opportunities and impressive financial rewards for the most successful employees. The working hours may be less demanding than other investment roles but they are still long compared with other careers.

Typical employers of investment fund managers

  • Investment banks
  • Investment and asset management companies
  • Stockbrokers
  • Insurance and life assurance companies
  • Banks
Vacancies are advertised by careers services, specialist recruitment agencies, online, in newspapers including The Financial Times and The London Evening Standard, and in publications such as Business Week, Investors Chronicle, The Economist and The Banker, as well as on their respective websites.

Sector and company research, networking and speculative applications are highly beneficial. For speculative applications, PIMFA lists member companies on its website. Early applications for vacancies are advisable.

Qualifications and training required

This career is open to both graduates and school leavers. Graduates will need a 2.1 degree in any subject, though business studies, management, statistics, finance, mathematics, accounting or economics can be helpful, as can an MBA or similar professional qualification. Relevant paid or voluntary experience gained via job shadowing, vacation work and internships is particularly beneficial. Graduates normally enter the industry in investment analyst roles and move over to fund manager roles with experience.

School leavers can enter the profession via apprenticeships and gain qualifications with a professional body to aid employability, starting with foundation-level qualifications. For more information about school leaver routes, see the finance sector of TARGETcareers, our website aimed at school leavers.

Key skills for investment fund managers

  • Confidence
  • Determination
  • Self-motivation
  • Strong time management skills
  • Ability to work effectively under pressure
  • Good numerical and IT skills
  • Analytical and problem-solving skills
  • Teamworking skills
  • Keen interest in and understanding of financial markets
  • Communication skills.

More On Understanding Investment Managers

Investment managers can range in size from one- or two-person offices to large multi-disciplinary firms with offices in several countries. Investment managers typically base the fees they charge to clients on a percentage of client assets under management.

For example, an individual with a $5 million portfolio that is being handled by an investment manager who charges 1.5 percent annually would pay $75,000 in fees per year. According to Willis Towers Watson, as of 2020, the four largest investment management companies in the world based on AUM were BlackRock Inc. at $7.4 trillion, The Vanguard Group at $6.2 trillion, State Street Global Advisors at $3.1 trillion, and Fidelity Investments at $3 trillion.

Types of Investment Managers

Investors must understand the various types of investment managers. 
  1. Certified financial planners typically develop a holistic financial plan for investors that takes information such as income, expenses, and future cash needs into consideration when planning a portfolio. 
  2. A financial advisor, however, is often a stockbroker. 
  3. Portfolio managers directly invest investors’ capital to achieve positive investment returns.

Currently, the industry is changing and financial advisors can now be:
  1. Personal financial consultants working with stockbrokers. 
  2. Robo-advisors, moreover, are fintech platforms leveraging technology and investment knowledge to advise individuals about their money and investments and provide automated investment management on behalf of ordinary investors.

Factors to Consider When Selecting an Investment Manager

Investors must determine what type of investment manager they require. This is likely to depend on what stage they have reached in the financial planning process. For example, an investor who is just starting off on her savings journey may not need the services of a portfolio manager. Instead, she would be better off with a Certified Financial Planner (CFP), who can teach her the basics of retirement planning. In contrast, an investor who has income left over after savings and wishes to invest it in securities is better off with a portfolio manager.

A background check of the investment managers’ professional regulatory qualifications will reveal any previous complaints and ensure the manager has the required skills and experience. Most investment managers and funds outline their investing philosophy on their sites or brochures. Investors should determine whether that philosophy (and risk level) is appropriate to their goals.

An investment manager should be easily contactable and take the specific needs of the client into consideration. As financial needs are continually changing, investors must feel comfortable reaching out to their investment manager at short notice to customize service.

Performance and Fees

An investor should review and evaluate an investment managers’ performance. It is prudent for investors to review at least five years of investment returns to determine the investment managers’ performance in various market environments. It is also helpful to consider their performance relative to peers to determine their deviation from the standard. Some sites, such as US News mutual fund rankings, provide this information on their sites.

Some experts are of the opinion that an investment manager should have skin the game, meaning that her salary should be tied to her performance and returns. But that may not always be the optimal solution as it could amplify the amount of risk that a manager takes on to achieve returns in line with benchmarks.

Investors should consider fee structures when comparing investment managers. Investment manager fees are a function of the investment asset class. Investment managers with higher fees often outperform those that have a lower fee structure, and investors should use caution if an investment manager has an excessively low fee structure. Investment managers' fees and expenses typically include management fees, performance fees, custody fees, and commissions.

Example of an Investment Manager
Sheena and Greg are both 30 years old and are expecting their first child. They have some savings stacked away but also have other commitments, such as mortgage payments on their new home. They are not sure whether the available cash is enough to help them plan for the new arrival. They consult a Certified Financial Planner (CFP) to help plan out their finances. The CFP suggests various options, such as putting some cash away in an education fund, to help them plan for the child.

More on what does an investment manager do

The late Harvard Business School professor Clayton Christensen found that in many sectors, low-end disruptors typically take hold at the bottom of the market and then work up to satisfy more demanding market segments. That very phenomenon is happening in the investment management industry. The industry is now showing the traditional earmarks of a sector ripe for disruption — most obviously, unhappy customers and very profitable incumbents.

In order to understand the next wave of disrupters, we use professor Christensen’s formal Disruptive Innovation framework. He popularized the idea of analyzing a company by looking at the “jobs to be done” its clients needed. Most money managers think their main job is generating alpha, but they are wrong. According to Amanda Tepper, CEO of Chestnut Advisory Group, investment performance alone does not drive asset flows.

We summarize below all of the jobs to be done by an investment manager in each category, across technical, functional, and emotional benefits. For example, Vanguard Group delivers not only the technical and functional benefits of low-cost investing, but ladders that into the emotional benefit of trust, of putting clients first and not making an excessive profit.

The hierarchy of jobs to be done by investment managers
Technical: What the product/experience does/is — “the offer”

Investment strategy: Generate alpha; don’t lose (too much) money; match liabilities and obligations; minimize expenses, and taxes; exposure to targeted sectors; legacy/achieve political or social goals; and protection from tail risks.
Execute investments: Source/generate investment ideas; research/due diligence; make investment decisions; manage portfolio and exit.
Administer investments: Administration; build optionality; compliance with the law and religion; and transfer wealth to heirs.
Functional: What the product/experience provides to the client — “the execution”

Easy and convenient user interface; customer service; access to networks; education; self-discipline.
Emotional: How the product/experience makes the client feel — “the tone”

Peace of mind; social validation; exclusivity; control; excitement.

Technical jobs to be done

A money manager must do all of the technical jobs at an acceptable level just to get in the game. We’ve listed below the major technical jobs, in roughly descending level of importance. We break these into three subcategories: 
  1. Investment strategy
  2. Execute investments
  3. Administer investments.

Investment strategy

Generate alpha

Some investors look to optimize for the highest returns above all other goals. They can typically tolerate extended volatility.

Investors focused on returns may want to invest in the most nascent of asset classes, which historically have generated astronomical returns for early investors. Historical examples include art, carbon credits, collectibles, cryptocurrencies, frequent flyer miles, internet domain names, lifetime individual income, litigation finance, mineral rights, patents, receivables, SaaS company recurring revenue, non-fungible tokens (NFTs), social media accounts, FBA third-party sellers on Amazon and other virtual currencies such as video game currencies.

These asset classes usually lack liquidity, legal protection, credibility among professional investors and indices, and they’re extremely high risk. However, as they develop, these asset classes accrete more of the infrastructure of the larger, established asset classes.

Similarly, angel investing is the highest-returning asset class we’re aware of, with median returns of 18% to 54% across 12 academic studies. However, angel investing has a long duration, extreme dispersion, high time requirements and poor visibility.

Don’t lose (too much) money

People hate to lose money more than they care about making money. The clearest example of serving this need are specialists in structured products, e.g., Axio Financial. Halo is a two-sided marketplace connecting investors to structured products offered by leading global financial institutions, easing access to these instruments.

Match liabilities and obligations

Pension funds are the best example of investors who do not prioritize getting the highest return possible but want assurance that they can meet their financial obligations on time. Even a family office that may not have a legal obligation to pay pensions does need to plan ahead for when they’ll get cash from the other side of their illiquid investments.

The universal liability is inflation. Inflation-linked bonds are an innovative tool to address this liability, alongside traditional inflation hedges such as real estate and commodities. In some markets used to high inflation, such as China and India, money molders choose to invest a significant portion of their wealth into gold.