How to Become a Portfolio Manager

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Portfolio managers handle investments on behalf of their clients.
Portfolio managers handle investments on behalf of their clients. (Image: Medioimages/Photodisc/Photodisc/Getty Images)

Portfolio managers are responsible for investing the funds individuals contribute to mutual funds, exchange-traded funds (ETFs) and closed-end funds (CEFs). Mutual funds, as the name implies, are open-ended companies that invest money on behalf of their clients; ETFs are funds that are traded on a stock exchage, CEFs are traded on stock exchanges but have a finite number of shares. Portfolio managers navigate these investment opportunities, acting as stewards of their clients' investment money. The job requires significant education and experience, not to mention a little luck and economic savvy.

Becoming a Portfolio Manager

Enroll in college. Most portfolio managers earn undergraduate degrees in accounting, finance, economics or business administration and fill-out the ranks of entry-level portfolio managers, according to the U.S. Bureau of Labor Statistics (BLS). While in college, get into the financial management industry by earning an internship. Try to forge a relationship with a company in a larger city and financial center such as Tokyo, London or New York City, because most securities analysis and portfolio management jobs are with firms headquartered near a country's financial center.

Gain work experience and build analytical skills. New recruits usually begin their careers by completing an on-the-job training program that familiarizes them with the complexities of securities analysis past their college education. After completing their training, most would-be portfolio managers work as securities analysts and specialize in a specific investment product, region or geographic region, according to BLS; the most successful new analysts are given greater responsibility by their firms, eventually being promoted to portfolio manager. At this level, unsuccessful analysts may even be asked to leave their firms.

Seek advanced training. After four years of work experience, people working as financial managers should earn a certification such as Chartered Financial Analyst (CFA), which is sponsored by the CFA Institute. The Charter is a worldwide professional designation to which securities professionals, especially those planning to be portfolio managers, should aspire. It is the most recognized and respected professional designation for investment professionals, according to CFA Institute. Unlike a lot of graduate degree programs in business and finance, the CFA designation is a self-study program that allows people to keep working while furthering their education.

Earn recognition and advanced responsibilities at work. Financial professionals who attain the title Portfolio Manager often have advanced educational credentials as well as a repertoire of work experience. Negotiate promotions and extended responsibilities when necessary, bearing in mind that you are your own best advocate when you climb the corporate ladder. However, with the long hours and extreme competitiveness comes a rewarding career in a field that is growing and is as diverse as the people who populate it.

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