Asset Management Explained | What Is Asset Management? | Careers In Asset Management

Today we are going to discover the realm of asset management,

what it is and,

what career advancements it has to offer,

if you have a strong interest in the financial market,

and want to learn more about it then we urge you to read till the end of this post,

 

1 - What is  Asset Management?

2 - How Asset Management Works?

3 - Career In Asset Management

 

1 - What Is Asset Management

Asset management is about managing clients investments & providing them with the strategies & expertise,

that would allow them to achieve their goals,

and secure their financial future.

Simply put asset management within the world of banking and finance,

is all about managing and investing large sums of money on behalf of their client,

in order to get a positive return over the long period of time.

in other words asset management is a financial industry that uses money to make more money,

clients that contact these asset management firms have large income that if left alone will depreciate in value,

and to refrain that from happening asset management businesses provide these clients with expertise across a wide range of asset classes, depending on their investment portfolio.

This investment portfolio is nothing more than the information and what the customer expects in the long term,

how much risk he is willing to take and so on,

Let's look at the client classes of these asset management firms,

the asset management clientele is segregated into two parts,

the first one is individual client and  second one is financial institution,

individual clients are people with huge amount of money,

whereas institutional clients are insurance companies government entities charities or even corporate pension funds,

asset management companies offer expertise across a wide spectrum of asset classes,

such as stocks bonds commodities real estate private equity etc,

moreover these large corporations have branches all over the world and are able to offer geographical expertise as well.

since these companies closely follow the financial market they can offer high quality advice and superior risk return investments,

initially these firms study client needs create an actionable investment portfolio implement the investment strategy in practice and oversee its development through the time.

the portfolios focus on all segments of the financial market,

the research about the small cap and large cap stocks,

blue chip and dividend stocks.

stocks from growth regions such as brick countries.

there is more to this list of stocks,

however all of it depends on the risk profile of,

the client the next investment sector bonds also have different instances such as shore maturity and long maturity bonds,

corporate and government bonds in addition to that we have commodities real estate and some other alternative investment sectors such as hedge funds or private equity.

2 - How Asset Management Works

We'll discover asset management's functioning with the help and pension fund example,

now you must be wonderin what a pension fund is well consider pension fund as a large pot in which employees or private companies put some amount of their salary to secure their financial future.

This superannuation fund or port provides for the expenses of employees once they retire.

let's say apple INC has this scheme up pension fund,

and since it has huge employee base,

the amount of money going into this pension fund on a monthly basis will be hug,

and since we are dealing with a enormous amount of money there is a possibility that things like

political imbalance in a country,

currency fluctuation

change in countries economic policies or

inflation can impact this fund and decrease the value of money in it over a period of time.

that is why these funds needs to be invested into the financial markets to refrain from loss of economy,

and to grow this money even further,

so that the employees can rely on this scheme,

in addition to this pension fund example the clients of asset management firms include insurance companies,

who also have a lot of money.

let's say you have bought yourself bike insurance and you pay a premium on a yearly basis for the same,

however you don't actually utilize the insurance claim throughout the year,

you only take insurance to mitigate risk if any accident happens in the future.

so consider thousands of people doing the same thing as you,

the premiums these insurance companies going to receive is going to be quite substantial right,

so these companies will have to invest this capital to generate more money and mitigate any significant future risk events or catastrophes if they show up,

another large institutional customer of these asset management firms are sovereign wealth funds and non-profit charitable organizations.

Sovereign wealth funds are basically large pools of money owned by governments.

Charities can also have large pools of money,

lying around because they don't know what to do with it at the present moment,

or they might be thinking that it's not the best time to invest it into charity because because of some reasons,

and hence that huge money might be sitting idle,

so rather than keeping it idle they invest it into financial markets with the help of an asset management firms.

…..

3 – Career In Asset Management

 

Having said that let's discover the job opportunities you can get in this asset management industry,

there is a wide range of job roles within an asset management organization,

however there are three main profiles around which the whole asset management revolves.

 

1 – Sales

2 – Research Team

3 – Portfolio management

 

 

1 – Sales

The sales post is responsible for establishing clients relationships and understanding clients needs,

these are the people who will actually bring clients to the firm and will also create investment profiles.

 

2 – Research Team

The research team comprise a professional research analyst help investment team locate best financial plans available in the market,

which have a tendency to grow over a period of time,

 

3 – Portfolio management

The portfolio managers are the people who are ultimately responsible for making investment decisions,

also these people create and manage client portfolios according to their needs mentioned by sales team,

they also make sure that the assets are on the path of growth,

according to glassdoor the average annual salary for an asset management professional ranges between dollars 7000 to 132 000 in u.s,

whereas it lies in between 7.2 lpa to 35 lpa in india.

the top asset management companies across the world are,

Blackrock,

Vanguard group,

Fidelity,

Investments

State state global advisors,

Capital group,

IP Morgan Chase, and

Goldman sach all of these companies hold assets worth almost 1 trillion dollars.

the world's biggest asset management firm blackrock holds 84 lakh 55 000 million dollars worth of assets.

talking about work-life balance asset management has more flexible hours than most investment banking and consulting job roles,

people do work hard but 16 hours of work shift very very rare.