Asset Management Path

Hello:

I was wondering about a career path to go into Asset Management after college undergraduate degree. This is a potential path I would take (if I get in to all these schools, right now am in HS)

Wharton - BS in Economics

IB (2-3 yrs)

MBA - Top School or One Targeted Toward Asset Management

Asset Management

What would be the salary, as well if this path was true, would it be feasible like this to go into AM?

 

If you are still in HS, I would caution you against looking for a job in sell-side ER when you reach your mid/late 20s. The industry is currently undergoing a huge shift in how it gets paid for its services, and this is likely to result in a major streamlining of the number of providers and ER analyst roles. We are already seeing entire research teams (at good shops) get completely blown out. If I were in business school today, I think I would abandon the ER recruiting cycle entirely. This headwind may change by the time you are exiting school, but it is certainly something to be aware of.

I think your chances at an AM role given the path you outlined is probably stronger. The large AM shops have their own set of competitive headwinds but in general this group should be able to reinvent itself and there will be firms that will be in growth mode at this stage. Most of them probably will not do much hiring over the next 2-3 years but should be back in the market by the time you are finishing. I would echo that you'll want to put your head down on the CFA pretty quickly after you wrap undergrad to give yourself the best shot of breaking in.

Sorry if this comes off as discouraging. I'm trying to be candid as opposed to pessimistic.

 

@jankynoname I really appreciate your feedback

So, if I get an AM job right after my undergraduate degree, should I keep it, or go for my MBA?

Also, is IB a good pre-MBA job, to then transition into AM???

Thanks so much!!!

 
Best Response

It's a little tough for me to give you an exact blueprint without knowing your full situation, but in general I'd say there are many different ways to progress up the ranks in AM. All of them are VERY long term commitments so you should not expect to be running a $10B book overnight. I can at least speak to my firm, but obviously don't want to risk overgeneralizing the entire industry based on this....

I'd say roughly 2/3rds of our equity analysts come out of top MBA programs. We recruit at five schools (Wharton, Booth, Colombia, GSB, and Haas). I manage recruiting at one of those programs where I'm an alum so pretty familiar with this process. In normal years we will take 2-3 summer interns total across these programs and maybe 1-2 of them will land full time roles. The backgrounds for our MBA analysts vary pretty widely. I'd say most common would be a banking stint plus a year or two in PE, followed by previous AM/HF experience, or consulting (my background). I think the banking experience is valuable and realistically probably gives you the strongest chance of converting an AM offer in business school, but there are pitfalls for sure. I interview probably a dozen ex-bankers every year and the vast majority have solid technicals but really struggle to pitch a stock in a way the gets truly differentiated from the Street. Have had much more interesting stock pitches from the "non-traditional" candidates; doctors, musicians, econ consultants, or guys who served in the military. At the end of the day, pulling together an ultra compelling stock pitch that is well defended with your own proprietary research and modelling is going to be what gets you the job.

The other route is just to come in straight out of undergrad as an associate and grind your way into an analyst role. This takes patience and you need to be really motivated. Most firms will put you through a rotational program for a year or two and then hopefully you get placed into an equity research/PM team. After working for 3-5 years in that role you will usually be eligible for a direct promote to analyst. The good news is these people save a ton of money by forgoing b-school. I remember when I came on there where to analysts who had been here since undergrad that were my same age and they were driving porches and already buying condos in the city. Meanwhile the MBA hires had student loan indentured servitude for a few years until they could emerge to that lifestyle.

portfolio management is a separate conversation entirely and this works differently at different firms. At my shop, it usually takes an analyst at least 10-15 years before they will be considered for a lead PM role (if ever). During that time you will likely get an opportunity to be a back up PM on a fund, which is cool but ultimately you're not going to be calling the shots. Obviously many firms (particularly on the HF side) have a much faster ramp into PM roles for top performers, but the size of the portfolios in Asset Management typically makes senior management highly risk averse, so it is rare to see PMs in their 30s.

Hope this helps. Mainly you can worry about this stuff later, but just keep your head down and stay interested in businesses and markets and you should find some interesting opportunities.

 

Forget the MBA. If you want to do Asset Management right now, aim to get an asset management job immediately out of undergraduate.

Yeah, yeah, it's harder to get an asset management job out of undergraduate, and it's easier to get an investment banking job. But that doesn't change once you get an the MBA! While it's true that Fidelity and Wellington only hire something around a dozen undergraduates a year, they hire even fewer MBAs, and the applicant pools at business schools are far stronger and more polished. Meanwhile, AllianceBernstein hires like 4-5 undergraduates and zero MBAs. And so forth.

In fact, your undergraduate years might actually be the easiest time in your life to get an asset management job, if you're focused and know what you need to do.

 

Another path you might want to look into is DCM out of undergrad. The reason why AM out of undergrad is so tough is because understanding the line of products you'll be trading/managing is complex and is certainly not something taught in undergrad. Doing DCM for a couple of years will give you a sound base for fixed income, time to study up for your CFA, and will make you a very strong candidate. I interviewed for a pretty solid AM position a few months ago, and the technicals were fucking tough man. I got a sample case I was to complete before the final interview, and I got wrecked on the RMBS portion of it.

 

DCM ----> AM. It's a very doable and gradual move. And on top of that, I talk to AM's on the daily via Bloomberg and the phone. You have to realize that by being on the sell side, the products you are underwriting and selling are being bought by AM's every which way. And to add to that, you structure the products they buy...so moving to AM is pretty easy because you understand the market and products inside and out. It's the easiest networking too. My group sells to Fidelity and Eaton Vance on the daily, so I know their guys all on a first name basis.

 

Hey cheetah71, what a lonely thread. I'm here since nobody responded ...so maybe one of these discussions will help:

More suggestions...

Fingers crossed that one of those helps you.

I'm an AI bot trained on the most helpful WSO content across 17+ years.
 

Way to be getting in front of this early. The summer before senior year is always the golden season. I went to a non target private college, and I got mine through a connection I made. I don't know how small your school is but try to connect with numerous alumni and anyone else that can take an interest in you leading up to this fall (even professors and other college officials that may have the pulse on the financial sector). Career centers usually have a database of grads with their industries so try to get that list and locate others on linkedin. You really need to get your name and resume in front of people with connections to AM. Many of these opportunities for non targets are not advertised so it will take some grinding. Good luck and try to get some financial experience either this summer or in the fall.

 

How non-target? I have always disliked that phrase, because there are non-targets that have a lot of resources to get into the industry (Internships, Alumni, Programs) while there are other non-targets where the school you go to is useless and maybe even a negative. If your school has the resources, BondBull is right. If not the process that you are going to have to go through is a lot more difficult (but worth it).

 

First time poster, frequent reader.

Came from similar situation as OP so here's what I've got. Currently working at a household name AM firm. Didn't study finance (or anyting related) and recently made the transition from a tech startup.

Came from a non-target, quality school with a large alumni base in NYC (think Maryland, Penn State, Syracuse, etc). Didn't say in IB, but a large network within finance as a whole.

  1. Utilize your school's alumni base. Incase you missed it, utilize your schools alumni base. A simple as searching on LinkedIn will work wonders. Try Keyword = Asset Management School (past) = Penn State Zip Code = (within 10 miles of): 10016

  2. Guys 1-5 years out of school frankly won't have much pull/ability to pass a resume through. Look for guys with 10+ years of industry experience and ask for a few minutes of their time on the phone (or coffee if you're in the area). Utilize guys 1-5 years out of school to learn more about they were able to break into the industry.

  3. Have questions prepared and know what you'd like to take away from the conversation. Also - send a followup email thanking them for their time.....our generation lost touch of this, but many people 10+ years older were raised on those values.

  4. As mentioned above, be able to tell a story. Why AM? What roles within AM? Do you want to cover industrials in-house? Or are you fascinated by muni bonds? Try to have some source of an 'end goal' (portfolio manager, equity analyst, etc) and look for individuals who can provide insight as to how to get there.....saying "i'm interested in is bland like a piece of lettuce. That being said, lettuce doesn't have carbs so I can't knock it that much.

  5. From my experience/observations, those who get into this industry (without the traditional 3.9 GPA from a MBA business schools">M7 undergrad) are able to do so through networking.

For what it's worth, I studied Comm/Psych/Sociology - having relevant coursework (stats/econ) can help you climb the latter, but having the relevant network is what opens the door.

Hope this helps and best of luck.

 

Learn math, stats and programming (Python, VBA, whatever), open a brokerage account and trade your own portfolio, read books. By the time you graduate you will have and edge and will be able to do something useful and that matters more than the school you come from.

You killed the Greece spread goes up, spread goes down, from Wall Street they all play like a freak, Goldman Sachs 'o beat.
 

Mainly am and research based...for who? Do you know what sort of research or assets you are looking to manage? Team / firm structure. I ask this to get a better idea of whehter you are looking at individual vs institutional etc...

 

Definitely institutional based AM. As to specific assets, hoping eventually to go the Portfolio Management route. Research wise, leaning towards equity research i think both sell side and buy side would work for me. But at this point, I don't want to narrow down my choices too much because I don't think I am qualified and knowledgeable to do so.

 

So just to reiterate my questions, what are possible routes to entry level positions? Does my plan of pursuing a Msc finance make sense? What kind of things should I be focusing on better prepare myself to break in? Any input, or thoughts would be welcomed and greatly appreciated.

 

I think any respectable job that deals with managing investments is a starting point. I can only give you one idea from my experience, it's not the best out there but it's what I know. I'm going to work as a credit risk analyst for a BB. The analysts I've talked to there say AM is a common exit op.

My own plan right now, at least, is to go through as much of the CFA as I can while I'm there (which is doable because the job is 50-70 hrs a week, unlike IB), finish that while I get my MBA, and hopefully land an assistant portfolio manager gig from there. After that, it's just a matter of gaining experience before becoming a head portfolio manager.

 

To start with, it may be easier for you to work in the third party distribution part of AM: that will enable you get an exposure with different aspects of the business including the client; before moving to the core Portfolio management work

"What we can, we must; and because we can, we must"
 

PWM is not a bad career path if you're sociable and know the markets well enough to benefit your clients. You can be 35 making a few hundred grand - mil (figures I heard of on avg) and playing golf with clients/working 9-5.

PWM is actually quite a equitable career path if you don't mind working hard initially and doing it for life, most people here, including me, wouldn't do PWM because of the lack of exit opp's. I would only see a wealth manager who had a CFA personally, it's sure to add to your value in my opinion.

 

I moved into asset management about 2 years after I graduated from college - I had been working in consulting (mostly quantitative/economics driven). I didn't do any networking to get in - I had taken/passed level 1 of the CFA, which probably helped get me past an HR person or two. I don't think it's too difficult to make a connection with most backgrounds/experiences to some role in asset management, but you do have to have your story straight.

 

Man I'd kill to get an asset management job too but it's brutal out there. I got my Masters from a good school, good undergrad. Passed Level I of the CFA and CAIA, and still bupkis. I'm hoping that I miraculously passed Level II and something opens.

 
raisondebtre:
I moved into asset management about 2 years after I graduated from college - I had been working in consulting (mostly quantitative/economics driven).

What kind of consulting where you doing? Was it econ/litigation by any chance?

MsCleo:
I got my Masters from a good school, good undergrad. Passed Level I of the CFA and CAIA, and still bupkis.

What's your masters in?

judowned:
Networking is going to be your biggest help at this point since on paper you are not going to look like the strongest of applicants (no experience, CFA, industry relevant degree ect.). I'm not sure you realize how competitive AM is for entry level positions, especially in this market. The traditional route for career changers like yourself is B school like has already been said and that might be the path of least resistance. Other than B school the CFA would be helpful as it would show that you have at least a general knowledge of finance on your resume and are genuine in your interest. It's a tough road brother so start with networking, you might get lucky. Even if you don't you should get a more realistic idea of what it takes to break in.

I do realize it's really competitive. I just feel like if you want something bad enough, there has to be a way to do it, and I'm trying to find out what those ways are.

When you guys say B-school, do you specifically mean an MBA, or does the MSF fall under that category as well?

 

Networking is going to be your biggest help at this point since on paper you are not going to look like the strongest of applicants (no experience, CFA, industry relevant degree ect.). I'm not sure you realize how competitive AM is for entry level positions, especially in this market. The traditional route for career changers like yourself is B school like has already been said and that might be the path of least resistance. Other than B school the CFA would be helpful as it would show that you have at least a general knowledge of finance on your resume and are genuine in your interest. It's a tough road brother so start with networking, you might get lucky. Even if you don't you should get a more realistic idea of what it takes to break in.

 

Since you don't mind doing PWM - cold call PWM offices, especially the good offices and ask if they can hire you on as an assitant. The pay will be very minimal, think like $10-15 but your experience will be really good. Once you gain experience there, you will have to take some exams (series 6 or 7?? I'm not exaxtly sure) and your in.

 

PWM is NOT good experience. Why does everyone keep giving out this advice? And PWM is NOT golf from 9-5 And PWM is NOT coldcalling And how many under 40's are bringing in a few mil? very few PWM is very little active management of the sort he is talking about. PWM is NOT a clients mutual fund with constant turnover and allocation changes and stock picks.

Dont mislead the kid.

 
LAWM:
PWM is NOT good experience. Why does everyone keep giving out this advice? And PWM is NOT golf from 9-5 And PWM is NOT coldcalling And how many under 40's are bringing in a few mil? very few PWM is very little active management of the sort he is talking about. PWM is NOT a clients mutual fund with constant turnover and allocation changes and stock picks.

Dont mislead the kid.

I do not work in PWM but I do know a little bit about the industry, if you look at the top PWM groups, such as Smith Barney in midtown. These groups, manage a few millions of dollars each. There commission works just like a hedge fund, they get paid a total percentage of the money they manage and I believe (I'm not sure) there are incentives for higher return. Many of these groups spend a majority of their time actually trading. These groups don't just manage your average Joe's money, they manage money from individuals and organizations looking for more sophisticated stratgies versus someone to buy 500 shares of Microsoft for them. If you start at out a place like this, you would initially work on getting in new clients and then work on the actual investment side.

Its not a bad career choice if done right. I was very shocked when I learned about these types of groups because salaries are comparable to other areas of AM.

 

An MBA from a top school is the standard route for career changers moving into AM. MBA is standard not simply for the education but because of the extensive network associated with top programs. I don't know how an MSF compares to an MBA for career changers, I do so a lot more MBA's and CFA's around though. It is difficult to give you advice without knowing your situation, no two people have the same path.

 

Hey,

First of all, PWM might or might not be cool depending on your boss or group. If the group does only financial planning and loans, then its boring. If your group does stocks, etfs, futures, options, then you will definitely learn a lot.

Second, there is a lot of selling involved. I find it boring after a while, but the thing is, it develops a set of skills that will be beneficial in future roles, whether you choose to go to purely Institutional Asset Management, Trading.... Selling is a good skills to have in the Sell side (obviously).

I know a couple of Wealth Advisor that have big books, who are still young, and who do mainly trading derivatives/commodities and hedging. It seemed like the perfect combination, where its more chill then the purely institutional side and you still make lots of money. But to get to that level, I can assure you you will need years of attracting clients before building a book. It is a tough business !

CFA is big in this side. Another thing is that there are two streams, Analyst and Associate. The Associate does much more sales, compared to an analyst.

Anyway, worst case scenario, you go into, dont like it, do 2 or 3 years, get your cfa and move on to the institutional side. Seen it happen over and over again at my firm, where people end up traders or Analysts at BB S&T/AM. I was worried I would get stuck in there after college, but there are lots of exit opportunities, at least in the country where I am at. Networking opps are great too!

 
ZicoTheGreat:
Anyway, worst case scenario, you go into, dont like it, do 2 or 3 years, get your cfa and move on to the institutional side. Seen it happen over and over again at my firm, where people end up traders or Analysts at BB S&T/AM.

Can someone chime in on this?

 

The CFA is really key and it is surprising how well it is received. L1 is not as bad as everyone makes it out to be; and once you get past it, L2/L3 are pretty easy if you know how to study / memorize a bunch of shit. It's just really time and money.

 
AssetGuru:
The CFA is really key and it is surprising how well it is received. L1 is not as bad as everyone makes it out to be; and once you get past it, L2/L3 are pretty easy if you know how to study / memorize a bunch of shit. It's just really time and money.

Check out the passage rates before you go with this advice. It may have been a breeze for this dude but, according to the numbers, it isn't for most.

If I had asked people what they wanted, they would have said faster horses - Henry Ford
 

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