Asset Management or Investment Banking

According to Credit Suisse’s Global Wealth 2021 Report, the number of millionaires worldwide grew to around 56.1 million. The report stated that this figure was an increase from the 50.8 millionaires recorded in the previous year. Just in the USA alone, the number stood close to 22 million in 2021. The report also found that the number of multi-millionaires also increased with a 24% gain in the numbers of ultra-high net worth individuals.

As more and more people keep on becoming richer and richer, there will always be a need for financial advisors who can manage, maintain and increase the acquired wealth. These financial advisors include those who are referred to as asset managers and investment managers. Sometimes, people use these two titles interchangeably though they are quite different. By following and understanding the information in this article, you’ll be able to discover which of them you would prefer to pursue as a career. 

Asset Management 

Depending on the website you read, you might get various definitions of asset management. At Congrapps we define asset management as the practice of a financial advisor – asset manager – increasing the total wealth or financial portfolio of a client over time by collecting, analyzing and handling the said portfolio. To be successful in his purpose, an asset manager should be able to acquire, maintain and trade investments that enjoy the potential to grow in value to the benefit of the client.

To accomplish such goals, an asset manager may choose to focus on a specific asset investment such as stocks, fixed-income securities, exchange-traded funds, mutual funds, index funds, precious metals like gold, silver and diamond or real estate. Clients of asset managers will typically include individual investors and organisations such as educational institutions, insurance companies, pension funds, retirement plans, and governments. When all is said and done a good asset manager will be able to increase returns from client investments and restructure them when needed to gain their clients more profitable.

Investment Management

Sometimes investment management can be rightly referred to as wealth management, portfolio management or money management. The reason for this is that investment management is a generic name that encompasses several financial roles, including portfolio managers and stockbrokers. Since the main goal of an investment manager is to generate a steady flow of profit through investment strategies for their clients, an investment manager will usually have access to the handling of all the financial assets and other investments of a client, with his/her responsibility not just being limited to the buying and selling of them. 

To fulfil his role, an investment manager will devise either a short or long-term strategy to acquire and dispose of portfolio holdings to achieve a specific investment objective. As is with asset management, an investment manager’s clients may be individual investors or institutional investors such as pension funds, retirement plans, governments, educational institutions, and insurance companies.

A Working Day

Asset Manager

Depending on the firm that an asset manager works for, his/her duties or tasks in a day may include:

• Creating and preparing financial statements and reports. Such reports may be done to show the client the areas they are growing and areas where growth is welcomed. 
• Communicating with clients about their investments under their care. Such communication or meeting can be carried out to assess the client’s financial needs and his/her stomach for risks related to their assets
• Developing and implementing strategies to meet any short-term or long-term financial goals they may have.
• Developing and handling client portfolios to keep their clients’ finances organized and updated.
• Identification of investment opportunities

Investment management

The duties of an investment manager will include:

• Overseeing a client’s portfolio and coordinating it with other assets and life goals
• Preparing financial investment reports to keep the clients abreast of/her investments 
• Asset allocation and/or stock selection
• Monitoring of existing investments and determining when to dispose of them based on profitability 
• Development of portfolio strategy and implementation. 
• tax planning, 
• estate planning,
• Retirement planning, philanthropy and education
• Banking and budgeting 

Education

Technically there are no mandatory educational qualification requirements for those seeking to embark on a career as an asset manager or investment manager. You will however find that most people with a career in this area have at least an undergraduate degree – dare we say, that as a result of the competitive nature of both careers, a degree is necessary. 

If you have not embarked on a degree and you want to pursue any of the careers; a bachelor’s degree in business, finance, accounting or any closely related field are the traditional ones you may safely acquire. However, if you are going to be managing a particular kind of assets you might need to take part in a specialized degree or course (perhaps get a postgraduate degree). For example, if the firm you are joining as a manager deals mostly with patents or intellectual property, then a course taken to give you knowledge and understanding of IP or patent law would make sense. 

Please be informed that if you choose to practise in the UK you will most likely take on one of the qualifications promoted by the Financial Conduct Authority 

Skills Required 

Generally, for both careers, you’ll need to develop the following skills:

• Ability to build trust & rapport with your clients
• You will not go far in any of these careers if you don’t have the analytical ability to understand a wide range of information relevant to your clients’ investments
• High levels of numeracy to understand financial data
• Ability to work effectively under pressure
• Teamworking and collaboration skills as you will need to work closely with others
• If you do not have great communication skills that you’ll need to be able to explain complex information to your client you might struggle.

My money is bigger than yours

There is a further similarity shared between both careers as both of them are very much lucrative. But it appears that the salary of an investment manager is higher. 

Entry-level positions for an investment manager often start around £25,000 or more. There have been firms that have been known to offer £43,000. Performance-based bonus schemes are also quite common. With experience, salaries will be considerably higher as you move up to more senior positions. Consequently, the average salary for an investment manager in the UK is £60,257 yearly. The average salary in London is £85,252

For entry-level positions as an asset manager, you can start earning from around £24,000 to £29,000. Performance-based bonus schemes are also quite common. Just like in investment management, your salary will be considerably higher as you move up to more senior positions. Consequently, the average salary for an asset manager in the UK is £40,765 yearly, and £58,591 in London.

How to Decide Which One to Choose? 

First things first, starting a career in either one of them does not preclude you from switching over to the other if you so wish to. No decision you make in regards to this is unchangeable. Further, when choosing which one you want to embark on, you should consider your professional goals concerning the duties that you may feel more comfortable with. You might also want to consider if you are more interested in getting in more salary. If salary is the issue then you know which one to go for. Lastly, try as much as possible to network with people that have worked or are working in the careers. 

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Charles is a writer, practising lawyer and personal trainer who loves learning and developing himself. He graduated from Middlesex University, London with eight first-class grades in the second and third years of his law degree, and received a postgraduate offer from Cambridge University. He loves strength training, boxing and encouraging people to succeed in their pursuits (legal ones)

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