Becoming a Stock Portfolio Manager
|Degree Level||Bachelor's degree; some positions require an MBA|
|Degree Fields||Finance, economics, or accounting|
|Licensure/Certification||Chartered Financial Analyst (CFA) designation recommended; state securities licensure or registration with the Securities and Exchange Commission may be required|
|Experience||Several years of financial experience|
|Key Skills||Excellent oral and written communication, attention to detail, strong critical thinking, and decision-making skills; knowledge of financial analysis and portfolio creation software|
|Salary||$85,905 (2020 median for financial analysts)|
Sources: U.S. Bureau of Labor Statistics, PayScale.com (February 2020)
Stock portfolio managers are responsible for appropriately investing clients' funds and determining which stocks clients should buy and sell. Managers keep track of the stock market throughout the day and work with a team of analysts to discuss market fluctuations and determine an appropriate plan of action. A great deal of their research may be accomplished after hours, so overtime work for these managers is the norm.
In addition to having a degree, stock portfolio managers must typically have some key skills, such as excellent oral and written communication skills, strong attention to detail, strong critical thinking and decision-making skills and a knowledge of financial analysis and portfolio creation software. According to the U.S. Bureau of Labor Statistics in 2020, financial analysts made a median salary of $85,905 per year.
Earn a Bachelor's Degree
Those who are interested in becoming a stock portfolio manager may pursue a bachelor's degree in finance, economics, accounting or a related major. Degree programs in finance or economics typically cover investments, international and domestic markets, financial forecasting, portfolio management and risk management. Prospective stock portfolio managers may also benefit from communications, computer and business training. Though not often required for the position, many portfolio managers earn a Master of Business Administration to stay competitive in the field.
Students can become familiar with the position by completing internships in stock or investment management. Interns may conduct research and financial analysis, attend client meetings and prepare investment reports. Additionally, some schools have mock portfolio investment clubs that allow students to experience trading and stock management with hypothetical accounts.
Gain Work Experience
Stock portfolio managers often begin their careers as market researchers or financial analysts. They assist established portfolio managers by analyzing economic trends, drafting financial reports and recommending investment decisions. Candidates in these positions strengthen their industry knowledge and learn how to make effective financial decisions for clients.
While not mandatory, many stock portfolio managers earn the Chartered Finance Analyst designation, which is offered by the CFA Institute. After studying the program curriculum, applicants can sit for three exams that test their knowledge of financial reporting, equity investments, alternative investment options, ethics, wealth planning and portfolio management, among other topics.
Register with the SEC
Once a portfolio manager's total assets under management exceeds $110 million, the Securities and Exchange Commission (SEC) steps in as the regulatory body. Managers of these larger portfolios do not have to additionally register with their individual states. Managers with between $100 million and $110 million in assets under management may register either with their state or the SEC.
Attain State Licensure
States regulate stock portfolio managers as investment advisor representatives (IARs) if the total net worth of the portfolios they manage is less than $100 million. Most states require portfolio managers to pass the Financial Industry Regulatory Authority's (FINRA's) Series 65 exam to become either licensed or registered as an IAR in that state. The licensure process typically also includes a criminal background check and payment of a fee.
While portfolio managers design the mix of investments and advise clients, they do not necessarily make the stock trades. To buy and sell stocks, in addition to providing advice, a portfolio manager must pass the Series 7 General Securities Representative licensure exam and affiliate with a broker-dealer.
In sum, to become a stock portfolio manager, an individual must first earn an undergraduate degree and then possibly an MBA before training in the field, gaining experience and then earning state licensure or registering with the SEC as needed.