RETAIL ASSET MANAGEMENT OVERVIEW
Retail Asset Management is the professional management of various securities and assets such as stocks, bonds, and real-estate, to meet specific investment goals of either institutional or individual investors. A financial institution will manage client's investments where that institution will make decisions on behalf of its clients, simultaneously allowing them exposure to a wider range of different product offerings that they may not have been eligible to invest in otherwise. Financial services companies who manage assets are often categorized as asset management companies themselves or they can be, and often are, divisions within an investment bank.
INVESTORS MAY BE INSTITUTIONS OR PRIVATE INVESTORS
Institutions: In general, these corporations invest available capital as it can achieve better returns than if the capital were left in a traditional bank account. Insurance companies invest their ‘reserve' which is the money t ...
CAREER PATH & CORPORATE STRUCTURE
Each financial company has a culture all their own. One asset management firm might be a corporate giant with ridged rules and a very structured hierarchy. Another might be a team of 300 of the top computer science and mathematical brains coming up with algorithms for proprietary trading on behalf of their clients. Another might be a ‘boiler room' atmosphere where they sell stocks on behalf of another interest for a margin or fee.
Below is an example of the general hierarchy throughout the industry for some of the larger asset management firms, however, keep in mind that every firm titles things differently. A Senior Vice President who leaves a company like Citi might be at the level of Vice President at a Goldman Sachs or Morgan Stanley. Not because of the nature or quality of the business at each firm but because of the difficulty of obtaining such a title at a Goldman Sachs versus a Citi. To sum up, not all titles are transferab ...
STRATEGIES IN ASSET MANAGEMENT
Because asset management divisions are always coming up with new ideas and products to use in their client's diversified portfolios, the strategies they use to operate have a tremendous impact on their ability to be profitable and remain competitive in the marketplace.
Fund performance is the best predictor of fund management success and is always measured very carefully. For this reason, institutions measure the performance of each fund which they manage. The firms who specialize in the performance of these firms collect and organize industry data, usually quarterly, to demonstrate how each firm measures up to its counterparts.
Some investment firms try to persuade its clients to assess performance over longer periods of time in an attempt to even out any short term fluctuations in their performance and demonstrate stability. This is not very easy to do because mos ...More »
Depending on geographical location, degree of expertise, type/size of company, education, and number of years of experience; salaries for asset management professionals can be anywhere from $30,000 growing in excess of one million dollars.
Compensation in asset management companies is normally a function of the economy at that time, and it should be noted that the total compensation is not very predictable. According to Payscale.com 4, the median salary for the lowest paid role in asset management, a Financial Analyst, is close to $60,000 basic, while the highest paid professionals in the area, Portfolio Managers, make a median base salary of about $100,000 4. Bonuses are the largest for Portfolio Managers as well: the median bonus according to the same site is $50,000 4.
Positions in New York City and San Francisco pay the highest base salaries and bonuses and, as expected, higher salaries are directly correlated with number of years in the field 4. There is also some evidence that those with ivy-league education will make a larger salary than those with other college educations. According to research done by Yale University, 2008 graduates who were placed in roles with investment management companies, had salaries from $80,000 to $140,000 with a median of $105,000 6, which exceeds the report of $60,000 starting salary from non-Yale-specific graduates 4.
As previously mentioned, annual compensation in asset management can be a function of the economic climate at any given time. According to a 2007 Professional Compensation Survey 7, asset management professional's salaries grew about 17% from 2005 to 2006 after already climbing 18% the previous year 7. Cash bonuses also increased by a shocking 27% during the same time frame 7. According to the same Professional Compensation Survey in 2008 7, the salaries in investment management had climbed an additional 17% and the growth rate for cash bonuses grew 20% 7. Salaries still climbed from here until the middle of 2008, but according to research collected by MyCareer.com, salaries decreased, along with the health of the United States economy, showing a sharp decline after December of 2008 8. The future in asset management, however, looks to be plentiful again as the industry has already experienced some bounce back in mid-2009 along with the financial industry in general.
One of the most important characteristics employers in asset management and really, the entire financial sector in general, take into consideration is educational background. In order to secure a position here, one must keep a strong profile throughout his/her academic years, starting in high school 1. If a student can keep a strong grade point average (GPA) and perform well on the standardized tests, he/she will be able to attend an accredited reputable college institution. Once in college, the GPA should remain above a 3.3 at the bare minimum. In such a competitive industry, a GPA can weigh heavily in consideration of potential candidates for a tier 1 and 2 investment bank. Companies such as Goldman Sachs and Morgan Stanley will require transcripts from students when considering them for analyst roles 4. A good site to refer to for a comprehensive list of top schools is http://colleges.usnews.rankingsandreviews.com/college 9. In asset managem ...More »
MAJOR PLAYERS - Investment Management 300 by AUM 2008
Rank Company AUM 2008 Location 1 Barclays Global Investors (BlackRock) $1,529,849 San Francisco, CA 2 State Street Global Advisors 1,439,577 Boston, MA 3 Blackrock 1,307,151 New York , NY 4 Fidelity Investments (FMR) 1,195,514 Boston, MA 5 JPMorgan Asset Management 1,133,232 New York, NY 6 Capital Group of Companies 962,034 Los Angeles, CA 7 Vanguard Group 851,341 Malvern, PA 8 Bank of Ne ...