Career Success: Asset Management Explained In-Depth for Students, Graduates and Professionals

1. Introduction: Hey, my name's I've started saying I'm a career consultant, entrepreneur, YouTube work public speaker and educator. But before I became all of those things, I started my career working for an investment bank called Goldman Sachs. I've helped thousands of students, graduates, and professionals secure offers at some of the world's leading companies and asset management firms. These include the likes of Goldman Sachs, JP Morgan, PWC, BlackRock, pimco, private equity firms, startups, technology companies, so on and so forth. On this course, we're going to take a deep dive into the water of asset management. We're going to talk about how you can break into Asset Management by exploring the different roles within a typical Asset Management Organization. The different paths and areas of importance that are related to the world of fund management. And that will be specifically important to you when you apply to the various fund management firms across the industry. On this course, we will cover everything from breaking in. So choosing which role suits you best relevant qualifications, what companies look for in candidates, identifying key competencies, the typical companies and players in the industry and space, compensation progression, exit opportunities, and so much more. Upon completion of this course, your understanding will allow you to confidently apply to asset management spring weeks internships, graduate schemes, and experienced professional roles. You'll also be able to leverage this course to apply to other areas within the world of finance and banking. So without any further ado, let's get straight to it. 2. What is asset management?: What is asset management? So asset management simply put, is the management of large sums of money for large clients. These clients can include corporations, pension funds, insurance companies, government organizations, so on and so forth. And the key with us and management is to achieve stable returns over a long period of time in line with the client's objectives, you're simply taking money from clients and investing into the different parts of the financial markets over a long period of time in order to achieve a given return target, different clients will have different return objectives. And so a pension fund might be more risk averse compared to a sovereign wealth fund who wants to seek high returns over a shorter period of time. Similarly, clan risk targets and return targets will vary just as their investment time horizon will vary to the best asset managers achieve consistent results and fund performance in a timely manner for their clients and do so a reasonable fee. 3. Clients of asset managers: As a managers have planets from different regions and of different sizes. But the typical clients are pension funds, insurance companies, sovereign wealth funds, charities, and then family offices, or high net worth individuals. Although Hanover of individuals and family offices tend to be catered by private banks or the private wealth management division of an investment bank. Let's go through each of the different clients and what makes them different from each other. So for those of you that don't know what Pension Fund is, a pension fund is basically the part of a company that is responsible for paying its employees when they retire. Let's take Microsoft for example. They've got thousands of employees every month from their salary. They will be putting a small amount into their pension port, into the Microsoft pension scheme. And so over time that pension pot grows and so that money needs to be invested into the financial markets in order to pay the employees when they retire. So when they become 65-70, they need some money to live off. And so that's when they draw down from their pension pot. Now that pension pot is only going to lose value if it's untouched, if it's not invested in the financial markets, because rising inflation and lots of other factors will impact that pot negatively. And so Microsoft needs to give that money to an asset manager or an asset management firm in order to invest in the different financial markets so it can grow the pool of money to pay Microsoft retirees in 203040 years time. So a pension fund typically invests in very safe assets. It doesn't want to achieve extremely high returns. It just wants to be inflation and get a few percent above that in order to pay its members when they retire. And then we've got insurance companies. Typical examples include acts are geico, a viva, so on and so forth. These insurance companies are responsible for taking on risk for homeowners, car owners, mobile phone contracts whenever any of these break or if there's any damage to a property or if a cargoes into a crush is the insurance company that needs to fork out the money to cover the costs of that accident. And so a lot of insurance companies get payments from property owners caught on his mobile phone owners who are paying for insurance. And so insurance companies have a lot of money that is sitting idle. And so in order to invest that money so it doesn't lose value, they will give it to an asset manager. And once again, the asset manager will invest that money across the financial markets in order to meet the goals and objectives of the insurance company. Next, we've got sovereign wealth funds. Examples include the China Investment Corporation, Abu Dhabi Investment Authority, and then the largest one, the Norway Government Pension Fund Global. They have assets worth over $1.1 trillion sovereign wealth funds on large pools of money on, by governments. And then you've got charities such as the Bill and Melinda Gates Foundation, Oxfam, et cetera, et cetera. Charities receive large amounts of donations. Sometimes they can't spend all of that once. Charities and sovereign wealth funds, oftentimes have lots of money sitting, I do. And so it's better to invest that through an asset manager as opposed to leaving that money in the bank? I do and losing value. And then you've got family offices and high net worth individuals typically catered by private banks or the private wealth management division of an investment bank. And these rich families or rich individuals who have money, their goals and objectives typically tend to be more riskier than a pension fund, for example, because they will be allocating more to alternative assets, which we'll talk about later on. Does other clients of typical asset managers, they vary in size, they vary in regions. However, typically, most clients fall into one of these buckets that we've just mentioned here. 4. Why are asset managers needed?: So some of you might be wondering why our asset managers needed con, the pension schemes, insurance companies, so on and so forth. Just invest in the financial market side themselves. If you're a high net worth individual, yes, you can invest in the financial markets by yourself. However, if you are a pension scheme or a big insurance company or a sovereign wealth fund, you have a lot of money that you are responsible for, that isn't yours per se. It's money that people have given you. So employees or putting money into a pension port, for example. Now that money is legally required to be invested by an investment professional or a company that understands the financial markets. And that's where investment managers or asset managers step in. They've got the expertise, they've got the resources, they've got the scale to invest into the financial markets and they meet all the regulations that each of the clients are required to meet. And so as a managers are legally required for pension schemes, so on and so forth. Oftentimes you might hear the term fiduciary asset managers have a fiduciary responsibility to invest their clients money into the financial markets with the best of interests at heart. So they need to take that money and invest it with the best interest of the client at the forefront of anything they do. In addition, asset managers can leverage resources and expertise throughout their organization and their firm. And this typically isn't accessible to a pension fund or an insurance company, or a high net worth individual, or a sovereign wealth fund, so on and so forth. And so is the expertise that the asset managers have, Is the scale, is the resources. All of these things combined together, I'll give them better access to the financial markets and allow them to make more informed investment decisions as opposed to the clients just doing it on their own. In the next video, we're gonna talk about the structure of a typical asset management firm and the key differences between the three main types of asset managers. 5. Structure - how firms are set up: It's important to understand how the typical asset managers are setup because there are three main types. The first of which is an asset management division within an investment bank. The second of which is a pure play asset manager, and then the third of which is a specialist, boutique, niche asset manager. So let's go through each of these in turn. So the first type and asset management division within a investment bank. So you've got Goldman Sachs and they have lots of verse divisions. They've trading floor and investment banking division, a research division, and they've got a asset management division. So Goldman Sachs asset management. Similarly, JP Morgan have lots of divisions and they've got JP Morgan Asset Management. Jp, Ma'am, you've got Bank of America, Merrill Lynch, and investment bank with lots of different divisions. One of those divisions is the Wealth Management and asset management division. Asset management divisions within investment banks are Asset Management businesses in their own right, but they can also leverage the resources that the investment bank has to offer so they can leverage sales and trading resources. They can leverage connections with the investment banking division and see if there's any clients that they have in common that they can help assist or invest their assets for. And so being part of an investment bank and asset management division can leverage those resources and benefit from the broader capabilities and expertise of the investment bank. A lot of the investment banks that have asset management divisions are very well-established and recognized and it allows them to build relationships and retain below of the world's biggest clients across different regions and locations. And then you've got pure play as a managers. These asset managers who only do asset management, they're not tied to an investment bank. They are companies that are just asset management companies. Examples of which include BlackRock, pimco, and Vanguard. These asset managers, all they do is asset management and they do it across different asset classes, different parts of the financial markets. Typically, pure-play asset managers tend to be the biggest asset managers in the world. And then last but not least, you've got Specialist asset managers. So these tend to be smaller, boutique, niche asset managers that specialize or focus on a specific segment of the market. So we're gonna talk later on about different asset classes in the financial markets, the different flavors that you can invest in play asset managers focus on all of the asset classes. Just as the asset managers in an investment bank focus on all the asset classes, have especially focused on one segment of the financial market. They might focus on ESG investing or environmental social and governance investing or impact investing or just equity investing or fixed income investing. So these tend to be smaller. They're very niche, and they don't have as big a brand name as some of the pure play and asset management firms tied to an investment bank. 6. Asset classes: You can think of asset classes like the different flavors of the financial markets that investors can access. More formally, an asset class is a grouping of investments that exhibit similar characteristics. It's debatable how many main asset clauses there are, but the most common ones include equities, fixed income, cash and cash equivalents, real assets and alternatives. Let's go through them one by 1. First of all, we've got equities or stocks. Equities are shares of ownership issued by publicly traded companies. Equities are traded on stock exchanges and you can make money from them if the price of your shares or equity increases or if you receive a dividend from the company. The asset class of equities is often subdivided by size and all sector industry. So you've got small-cap stocks, you've got mid-cap and large Carp. So these are the sizes of the different companies that you buy equities in. And then you've got different sectors like healthcare, technology, media, so on and so forth. Next you've got bonds or fixed income investments, fixed income investments, or investments in debt securities that pay you in the form of interest. Fixed income investments are generally considered less risky compared to some of the other asset classes. Next, we've worked cash or cash equivalents, such as money market funds. The primary advantage of casual, casual equivalent investments is their liquidity, meaning you can have access to them at a faster rate than some of the other investments which lock your money up for a longer period of time. When something is highly liquid, it means you can easily access it. For example, cash is highly liquid. In contrast, we have real estate which is highly illiquid because you don't get access to your money easily when you invest in realistic, then we've got real assets, real estate, bridges, infrastructure, et cetera, any physical assets fall into the category of real assets. This asset class provides protection against inflation. And so real assets you will often hear, is an investment asset class that is used as an inflation hedge. And the reason they're called Real Assets is because of the tangible nature of the investments in the asset class or real estate infrastructure, et cetera, et cetera, all physical tangible assets. And so that's why they're called real assets. Real estate investments are often illiquid. And so when you're investing in this asset class, you can expect your money to be tied up for a long period of time compared to investing in say, equity markets or cash or cash equivalents. Last but not least, we've got alternative. So investing in private equity hedge funds, venture capital, all categories that don't fit into any of the previously mentioned asset classes. Having said this, it does include real assets. Some people categorize real assets as alternatives, and that's fair. However, you can distinguish the two by separating them. Alternative investments typically tend to be long-term as well, and so they're also illiquid, however, given their long-term investment horizon as well as their illiquidity, these come with the benefit of typically higher return targets. So a lot of people who invest in alternatives because they seek 1000, 15-20 percent returns compared to a fixed income investment of two or 3% above inflation. And so because you're seeking higher returns, these investors are more willing to tie their money up for a longer period of time. And so it's a liquid nature, is compensated by the potential higher return that alternative investments can return for you. And it goes without saying higher expected returns mean taking more risk. So yes, it's more illiquid, it's riskier, but there is a potential for higher returns in the alternative asset class. One last point I want to mention is that of diversity. So investors can invest and they always or often do invest across the asset classes in order to spread their eggs, in this case, their money across different baskets. By doing so, you're diversifying your portfolio. And this naturally hedges you against any downsides in one specific asset class. Because if you put all your money into, say, cash, and then an event happens that negatively impacts the cash market or your money or capital will be gone. And so investors are encouraged to split their money into different asset classes in order to compensate for ups and downs across the different asset classes. Also, this is more, you'll see this more with specific plants or pension funds will put a lot of their money into fixed income assets, more potent into alternatives, and a bit more into equities. And that's because it reflects the nature of their investments, their investing over a really long time horizon, they don't need to get really high returns. They just need to get small returns to pay back their retirees. And so this might differ from a high net worth individual who wants to put more money in alternatives, take a bit more risk because they don't mind risking some of their capital to get a higher return. And they don't have all of these retirees to pay off year after year after year. They're investing for themselves. So they can be a bit more riskier in their approach to investing. 7. How asset managers make money: You're probably wondering how did asset managers actually make money? How do they charge their clients? So before we talk about the fees and how they make money is important to understand the term AUM, assets under management. So assets under management is basically the amount of money that an asset manager is. Managing. Asset managers vary in the amount of AUM they have. The largest asset managers like Blackrock manage over $3 trillion of assets. And so they have a figure of over $3 trillion of AUM. Somewhat smaller managers have over $1 billion in assets under management. But what's important to understand is each client is going to invest some money into a portfolio or a fund with an asset manager. And so there are two main ways that asset managers make money. The first of which is the management fee, and the second of which is the performance fee. Whenever a client is giving money to the asset manager, the asset manager is going to charge them a fee, a small percentage of the total sum that's being invested as a management fee. So what this is is the asset manager saying because we're going to manage your money for you and invest it in the different parts of the financial markets. We're gonna take a small fee, a small percentage from this total sum as a yearly, annual fee for us. Now this v can range from anywhere between 0.2% of the total amount invested to one or 2% is typically very small, less than a percent because the sums that are being invested or north of a 100 million, sometimes a billion, so on and so forth. And so when you're investing such large sums, the percentage of the management fee only needs to be less than 1% in order for the asset manager to make millions from the management fee. So it might sound small when you're thinking in percentage terms, 0.5%. The grand scheme of things, it's massive because the assets being invested or nor for 500 million pounds for example, let's use an example. Let's say a client is investing 500 million pounds and they're giving that to an asset manager to invest 0.5% or 500 million pounds is 2.5 million pounds. And so that would be the fee that the asset manager gets. So they get 2.5 million pounds to manage that money for a year and they invest that and then hopefully they can get that money to reach certain levels of return that the client is seeking. So you've got the management fee, which is what the asset manager gets for managing the money. And then the second field is the performance fee. The performance fee incentivizes the asset manager to ensure that they hit the target and sometimes exceed that target of return. If the asset manager exceeds the target of return, anything above the target that they reach, they get caught and sold. The performance fee incentivizes them to reach the target. If they get that, they get a performance fees, so they get an additional fee on top of the management fee. The reason why it's more common in alternative and real assets is because these asset classes typically seek higher levels of return. And so if you can reach those returns, anything about that you share in the profits as a performance fee. Other products such as some of the basic fixed income products, the returns are, it's a very low 2.3.4 percent above inflation. And so having a performance fee tied to basic fixed income products just doesn't make as much sense. One will point to note is that large asset managers or asset management divisions tied to investment banks, sometimes by smaller asset managers or boutique or specialist asset managers. So for example, a few years ago, Goldman Sachs Asset Management Board, Specialist, ESG and impact investing company. So small company based in, I think it was San Francisco. That was because Goldman Sachs asset management didn't have any specialism or specialty in the ESG or impact investing space. And so they bought a smaller company. Now once they buy that smaller company, they can offer these capabilities to their clients. So any client's interested in investing in ESG or impact can do so through Goldman Sachs asset management. Now, by doing so, Goldman Sachs asset management can now offer more products, more resources, and more bespoke service. By doing so, they can try to higher management fee to their clients. 8. Progression and hierarchy: Progression and hierarchy really does vary between companies and between the taps of asset managers. So an investment bank, the asset management division. And typically investment banks habit typical hierarchy of analyst for two or three years and then associate for two or three years and then vice president, director, and then managing director. That's the typical structure of the hierarchy. However, in general, as a management pure play firms, only there isn't really as much of a hierarchy or structure is more. You go in and you are an investment manager or you're a salesperson, there isn't so much of a structure, so it's always important to be aware of that having said this, there is obviously different responsibilities that come with the amount of time or experience you have in the world of fund management or Asset Management. And so someone that goes into a junior level, their responsibilities will differ compared to someone who's been in the firm for five or ten or 15 years. And so although the titles might not defer, the roles and responsibilities will differ hugely similar to the hierarchy in terms of titles, the progression might differ from organization to organization. And so some organizations promote you fossa or give you more responsibility. If you are able to show them that you're capable, you can take on work and you can succeed at the work that you're doing. And you, if you are operating at a higher level, you progress naturally of organizations who have a structured hierarchy, they might say to you, even if you're performing extremely well, you need to do your two years as a junior and then you need to do your two years as an associate before you can become a VP. So it really depends from firm to firm. Some are more strict, some have a flatter hierarchy, but these are the points that are important to be aware of when you're thinking about progression and hierarchy in the world of asset management. 9. Work/life balance: Asset Management is typically a client facing role or industry is the parliament investment back where you are facing clients, you are building and prospecting relationships. You are investing into the financial markets. You are, you know, getting access into the different asset classes, into the depths of the financial markets. Wherever you are an investment bank in the asset management division or a pure play manager. Pure play as a manager, you are in a front office client facing role. And with that typically comes longer hours. It's not going to be a nine to five in your first few years. And that's because, you know, you're compensated really well, which we'll talk about later on, you get a bonus which is typically 102030, 40% of your base salary, and you know, you get treated nicely. And so in your first few years, your hours will be anywhere between eight AM to 6700 PM. And once again, this will vary from firm to firm. However, for the large firms, it typically is for someone in the sales side of things is eight AM to six or 07:00 PM. We'll talk about the different roles in a video later on. But on the investment side and the hours can be quite longer. You might get in a bit earlier, so 7730 AM and leave it about 07:00 PM, eight PM, nine PM. Now, this really varies with workload. Some parts of the UI like quarter end, lot busier for quarterly reporting, performance reporting to clients, how their money, how their capital, how their assets have performed over the last quarter, etc, etc. However, as time goes on, as you get more senior after you do 345678910 years in the industry, you ours do tend to reduce, but the responsibilities increase. So managing directors, associates, VP is they might get in at 08:39 AM and then leave the office at 05:36 PM. However, they have a lot of weight on the decisions that they make. So their responsibilities have a lot more weight compared to an analyst or a junior professional who does longer hours. Their decisions on as impactful to the business that I was in asset management are typically better than working in the investment banking division at an investment bank, they aren't in 95. Although as you increase your tenure and duration in the industry, you hours will naturally decline and reduce. And so you can get a good work-life balance, working in asset management and starting a family, having your own personal life, having your own personal interests, and maintaining them outside of work. 10. The different roles within asset management: When it comes to the types of roles within fund management or asset management, there really are three main types of roles. You've got the salesperson, you've got the investment or product professional, and you've got support functions. So let's go through these one by one. Sales, otherwise known as distribution, includes anyone that is responsible for client relationship management, prospecting, pitching declines, bringing in new business and nurturing those relationships in order to continually bring in business from clients, in order to bring that money and invest it into the financial markets. So as a salesperson, you are responsible for increasing the firm's AUM. You're helping the plants they invest with you reach that return objectives and you're responsible for going out and winning new business. Next, we've got product people or investment professionals. Now when you start off on the market side, so the Investing said you're likely to be an unlisted on a specific product. So you've got the different asset classes, you've got equity, fixed income alternatives and so on and so forth. You're going to be an analyst or a junior within one of these asset classes. Let's say you're in fixed income, you're going to be specifically focused on fixed income investments. So you're going to be a product specialist. You might be a specialist in corporate credit. You might be a specialist in emerging markets, one sub sector of fixed income. So you're going to spend some time there and get to know that product or that area of the market as much as possible. After two or so years in a product roll, you typically have the option to either go into more specific areas. You can go out and become a junior trader or a junior portfolio manager. Or you can become a researcher or economist, et cetera, et cetera. And so there are various different roles within the product side or the investment side. But you can venture into an explore for that given asset class after you do one or two years as a product specialist. Now as a product specialist in your first few years you're gonna be working on Excel spreadsheets. You're gonna be working on PowerPoint presentations, taking lots of data from various sources. There might be performance data, it might be data from Bloomberg, from the internet, so on and so forth. Collating that into Excel and analyzing that data. Once you do that, you're gonna be making a look nice and neat and tidy and presenting it in a PowerPoint presentation for when the salespeople go to meetings and pitch to different clients. Often you do that. You can decide to specialize within your subsets or within your asset class into a trading road or a portfolio manager role, or a research role, et cetera. So there's various different avenues that you can go into as a product person. And you start off at the beginning as a product specialist, traders in asset management, specifically, our execution only is different from a trading floor trader in the sales and trading division of an investment bank or a hedge fund, you're executing trades that go into the portfolio. So every idea that the portfolio management team has, you are responsible as a trader to execute those trades and ensure the capital gets invested accordingly. In a portfolio management role, you are primarily managing risk, is your responsibility to make sure a portfolio. So a portfolio or a fund is a investment strategy. Lots of client money can go into one fund. That funds might specifically only invest in emerging market debt. So as a portfolio manager for emerging market debt, you're responsible for making sure that portfolio and the money that goes into that fund meets its return objectives. You manage the risk accordingly and you ensure that the relevant trades and ideas go into that portfolio are met and in line with the objectives of an emerging markets debt portfolio. And so as a portfolio manager, it's your responsibility to make sure that given fund that you manage succeeds. The traders execute the treads, so execute the ideas that go into that portfolio. And the researchers are coming up with ideas as well and feeding them back to the portfolio managers and going back and forth and deciding whether they should invest or allocate money into an idea or not. And last but not least, in asset management, we've got support functions. So these are roles which are not directly cells related or trading or investment related. These roles are more assisting the salespeople or the investment professionals to do their jobs. You've got technology, you've got human resources, you've got legal, you've got audit, you've got compliance, you've got operations, so on and so forth. All of these areas are working behind the scenes to make sure the right contracts or getting written up to make sure nothing goes wrong after trade is executed to make sure the clients are being onboarded accordingly. And so they allow the front office or there are other cells and the investment professionals to do their job to the best of their ability. 11. Relevant qualifications: Relevant qualifications for asset management. So do you need to do an economics degree? Do you need to do a business management degree? What degree do you need to do in order to break into us and management? Does it really matter? And how helpful are the CFA, fRMI? So Chartered Financial Analysts, financial risk manager, how useful are these qualifications in breaking into us at management? And how helpful would they be and allowing you to progress and climb within asset management. So let's start with the first one. Degrees. What degree should you study? So honestly, it doesn't really matter. Nowadays, most firms, they appreciate the diversity of applicants that are applying for their organizations and they understand you don't need to do an economics degree to break into asset management. The core skills that you have in asset management on exactly tied to what you learned in an economics degree. Key competencies like communication skills, interpersonal skills, analytical skills, attention to detail, having a interests or genuine enthusiasm for learning about funded management, investing in the financial markets, et cetera, et cetera, et cetera. These qualities can come from a history graduate, a chemistry graduate, and non economics or finance focused graduate. So your degree doesn't really matter. My advice to you is study something that you enjoy and that you know, you can perform well in because the better you do in your degree, you know, it will help to get to one or a first-class degree. So when you apply, they, most firms want at least a 21 or a first-class degree, and so you should focus on getting that. However, what does help is relevant experience having an internship or to doing Spring weeks or professional experience outside of graduating after graduating, that is relatable or can be tied into your interests into asset management. So those things matter more than the specific degree that you study. The CFA, chartered financial analyst, this is a very specific qualification for finance professionals and it does help those wanting to break into asset management or the fund management industry because the free levels are very specific to investing and asset management. So asset allocation, investing capital, the financial markets, the different asset classes, and it goes into debt. Cfa takes longer than doing a Master's degree. For the most part, there's three levels which most people do over two or three years. And it's a big commitment is recommended that you suddenly for 300 hours per exam. And it's a huge commitment and it costs thousands of dollars. Having said this, a lot of the investment banks, a lot of the asset management firms will pay for you to do it so they'll cover all your costs. And this is typically offered to enlist associate vice presidents when you break into the organization. So you can start doing the CFA early if you want. However, if you get into an organization, they'll pay for you to do it anyway. They'll cover all the costs for you so you don't need to foot the bill in advance. So have a think about that. It does definitely help if you haven't got any experience seeing CFA Level one on offended at CV dust and out. It shows they're serious. It shows that they want to break into this field. And it is a qualification specific for asset management or the buy-side. And so it shows that you are interested in the industry. So definitely if you can do it, but if you think you can break into the asset management industry without it, then definitely break in first and then get the firm to pay for you to do it. And then we've got the 4M financial risk manager, this qualification. You don't really need it per se for asset management careers in general, CFA is preferred, but FOR M is a very good qualification to have. And it's more common for risk management professional. So people in risk, people working closely with traders, people that want to go into different risk type of roles, whether it's in asset management or not, that's more relevant for you. However, for asset management specifically, out of the two qualifications of CFA and F ORM, you should definitely focused on CFA because that's more relevant and it stands out more on your CV. 12. What companies look for in top candidates: Okay, so you're probably wondering, what do companies actually looked for in top candidates? What characteristics or key competencies do the candidates that succeed have in common? So let's talk about this, will break it into two key parts or key competencies at the junior level, and then key competencies at the more senior level. Although they're both quite similar, is important to distinguish. The difference is that very few differences between the two. So naturally you're going to want to have an interest in financial markets and an interest in investing. And then more specifically, if you're interested in like ourselves role, the team that you're joining, whether they are servicing pension fund clans or insurance companies, it's always good to have some sort of knowledge about how asset management helps the end clients. So how does it help pension funds? How does it help insurance companies know a bit about both of the clients or any other clients that you might be working on. And so it's good to know about asset management in general. It's good to know about financial markets, what asset classes are, and a bit about the different clients that asset managers serve because it allows you to go into interviews and have a conversation about the clients that the person that you're speaking to serve and how they manage those relationships, for example, in addition to their, Some of the most common key competencies include analytical skills. You're going to be analyzing lots of data, are working with Excel spreadsheets, transferring data and making it look nice into PowerPoint, you need good attention to detail. You're going to be sending lots of emails and data out to clients. You can't afford to make mistakes when reporting things out to clients or even internally within the organization. And so attention to detail is key. In addition to that communication skills, it goes without saying you need to be someone who can work with, not just to your team members, but other people within your organization, as well as individuals outside of your organization. And that brings us onto interpersonal skills. If you want to be a salesperson, especially junior professionals who want to go into cells roles, you need to have really strong interpersonal skills. You need to be able to build relationships, strengthen them, and then later on when you get more senior, being able to bring in business, be able to prospect and bring in more business from new clients. And so interpersonal skills are the key components of successful, many successful salespeople. And this is a key competency that you should have if you're considering to go into ASL SAP abroad, successful candidates also display a thirst for knowledge. So when you go into interviews, you want to be able to display that. You're always curious, you're asking the right questions. You want to learn more and more and digest that information. And then last but not least, you display growth potential. So this is something that's very important. A lot of the banks, a lot of the asset management firms, they hire people and then they want people that they employ to show growth potential. You don't just grow a bit and then flatten out your learning curve. Flattens. They want people who can embrace a steep learning curve and keep growing and growing and growing. And you do that by showing eagerness. You do that by showing a development of technical expertise. You do that by showing a grove in interpersonal skills, communication skills, and all of these key competencies. And so a mixture of those key competencies with the desire to learn more your technical knowledge about the markets and your ability to digest and construct, digest information and construct good presentations, PowerPoint skills, meeting notes, so on and so forth will allow you to stand out at the junior level. At the senior level is more results-driven. So as a salesperson, for example, you are going to be required to bring in more business. You're going to be required to go out and pitch in front of clients something that you want do a junior level. And so you need to have your technical expertise to a high standard. You need to have your markets knowledge to a high standard. You need to know what's going on with your client portfolios. You need to know what's going on in the different clients bases, the different client markets, where each client's portfolio is, how it is performing, how it performed last quarter, you need to be able to go into a pitch with a product or investment professional and pitch confidently to a crime and show them that they can trust you. And you can trust them to build a working relationship to help them reach their targets over a period of time. As an investment professional, you need to be the expert, the go-to person in your given asset class, in your given subset within that asset class. So as your inequities person working on large cap stocks, you need to know everything about the given companies within your reach. Because there's gonna be a lot of clients who, the salespeople who have invested in your products and you need to know what's going on in that space. You need to know where. You need to know what ideas are popular in eternal, what companies are performing well, what companies are not performing well? And generally be able to go into a pitch with a salesperson and pitch an idea as to why a client might want to invest in your given sub sector. A lot of salespeople and investment professionals work together. When you're going to pictures, you've got together, the salesperson does a lot of the introductory stuff, setting the scene and then the investment professional or the product person usually pitches the fund or portfolio that the client will be investing into. And so if you're a product person or an investment professional, you need to know your stuff about that given product, about your area of the market, you need to be the expert in the area. As a salesperson, you need to ensure that, you know, when the Klan invest with you, they can depend on you. Anytime they have a question, they can reach out to you. You'll keep them updated with how their portfolio is performing and you just give them a pleasant experience, as well as the fact that your firm will be able to reach the returns that they set out in their initial objectives and sustain a strong and growing relationship over a long period of time. 13. Firms to consider applying to: So as previously mentioned, there are three types of asset management firms. You've got the asset management firms that are attached to an investment bank as a separate division. You've got pure play asset managers and then you've got specialists, niche boutique asset managers who specialize in a certain part of the financial markets. And so when you're applying to asset management, I would encourage you to diversify your applications. Maybe it's most common to apply across the pure play and the investment bank division asset managers. However, if you've got a specific niche interests in a specific topic like ESG or impact investing, then you could do your research and find the relevant specific asset managers that operate in that space. So in terms of pure play asset managers and asset managers that are a division of an investment bank. Typical players in the bulge bracket space tied to an investment bank RD, Goldman Sachs Asset Management, JP Morgan Asset Management, Morgan Stanley Investment Management, Bank of America, Merrill Lynch, wealth management and investment management, UBS, all of the big investment banks tend to have asset management divisions. So definitely consider applying to dots. So in terms of pure glass that managers, the most notable in the biggest ones are Blackrock, Vanguard, Elgin, pimco, fidelity, legal and general, and a few others. You can easily find a whole list of these asset managers if you do a quick Google search. And so you should definitely include all of those on your list when applying for whether it's a spring weak and internship for graduate scheme or an experienced professional role. Definitely making lists and work your way through them and applies it all adults, in terms of applying to a specialist boutique pure-play asset managers. This really depends on your specific interests that are a bit harder to find compared to the big names. Some specialized in the charity space or the impact investing space or the ESD space. Check on line for the relevant as managers in those spaces and then apply to those as well. 14. Compensation (base salary and bonuses): So compensation really does vary from organization to organization. But what we do know is at the junior level, if you've got between one to three years of experience, you can earn a base salary or you can expect a base salary of between 40 thousand pounds and 55 thousand pounds. And then when you go from three years to five years, it can go up from 55 thousand pounds to 80 thousand pounds based salary. And then if you've got between five to ten years experience, that base salary can go from 80 thousand pounds to 200 thousand pounds. And then if you are like a managing director, someone who has been in the industry for ten plus years, your base salary will be anywhere from 200 thousand pounds up to nor for 500 thousand pounds. And those are the base salaries. Keep in mind, these ranges are for all types of asset managers. So those attached to investment banks, those are pupil asset managers and niche boutique asset managers. In terms of bonuses, these will really vary from firm to firm, and depending on the size of the organization, as well as performance for a given year and various other market factors. Things that influenced performers include assets under management, the fees or management fees, performance fees. If the rest of the market as seen an increase in fees, you might be able to increase your fees. And if the rest of the market has seen a drop in fees than feasible dropped for you as well generally is really hard to pinpoint how much bonuses are, but they can be anywhere from 20% up to 80 to a 100% of your base salary. It really does depend on the organization, and it really varies on a case-by-case basis. 15. Exit opportunities: While the exit opportunities like when leaving asset management. So typically in any finance profession, wherever its asset management, corporate finance, sales and trading, working for a hedge fund, private equity, wherever is the absorption it is tend to be quite good. And that's the same in asset management. Typically a lot of people leave and they go into banking. So corporate finance, some people go and join the world of startups. Some people go into industry and join their clients. So you might be an asset manager and product or investment or a salesperson. A lot people decide to go and work for their clients. So you go into industry, you work for a pension scheme, you worked for an insurance company, you're on the other side, so you have that technical expertise and knowledge and now you can help your clients understand better by joining them instead, other routes include entrepreneurship and consulting, whether that's investment consulting. So oftentimes in asset management, you have investment consultants, organizations like a on Hewitt, Willis House, Watson, Hyman Robertson. These organizations are typically hired by pension schemes, for example, to consult them on which asset managers to choose. So let's say the Microsoft pension scheme hires Aeon Hewitt as a consultant. Now, Aeon Hewitt will meet with Goldman Sachs asset management in order to find out about their funds, in order to do the technical research for the client, in this case, the pension scheme, to make an informed decision about which asset manager to choose? Should they choose Goldman Sachs Asset Management or should they choose JP Morgan asset management and investment consultant like a Harmons Robertson or an ion, or a Willis Towers Watson are responsible for making or helping pension schemes make informed decisions about which asset managers to choose. So a lot of Asset Management Professionals end up going to work for consultants instead, investment consultants, management consultants, professional services firms. So the extra opportunities are very broad and it gives you a lot of skills that are transferable. And so asset management in general gives you a lot of transferable skills that you can apply in various other industries, which is always very useful. 16. Useful resources: So I wanted to share a few useful resources for you if you wanted to stay up to date with things going on in the fund management space, anything and everything asset management related. Because a big part of getting an offer and asset management company is having a strong awareness of what's going on in the markets, knowing what's going on in the fund management space and in general, having good commercial awareness. So a few good resources that you should definitely explore and checkout when doing your research for interviews or in general, staying up to date include the following websites. Investment week, dot code dot UK, institutional asset manager, dot coda UK, FT.com slash fund hyphen Management. This one I think is a paid subscription. So be aware of that funds. Hyphen europe.com and then last but not least, fn London.com slash asset hyphen management. And this one I think is a paid subscription as well, but the others should be free. Definitely exploit those resources because they will help you keep up to date with what's going on in the industry. And they're very useful because everyone in the industry or the salespeople, the investment professionals, are reading these newspapers or articles or websites because they are specific for asset management and what's going on in the markets and in the investment landscape. So definitely do check those out. 17. What did I like about working in asset management?: Okay, so I spent a good few years in asset management at Goldman Sachs. And in this video, I'm gonna share with you what I personally enjoyed about asset management. And there are five key things. And the first is I was in a sales role, so I really enjoyed the client interaction. You get to build your interpersonal skills. You get to actually manage plant relationships. And you get to go to lots of meetings where you can sit between the client and the investment professional and find out about how a portfolio or the clients investment is performing. What's going well, what's not going well. So to get that insight and that client interaction is something that I personally really enjoyed. Secondly, the work-life balance was great for me personally. I was, you know, I had a lot of peers and friends who were working in the trading floor or in the investment banking division of the investment bank. And so their hours were really, really early starts or really, really long hours. Asset management was a front office division and it had a good work-life balance. I was getting in the office at 08:00 AM leaving about six or 07:00 PM. Now, that isn't a nine to five, but it's better than getting in the office at nine AM and leaving at two AM, Like the investment banking division or getting in at 06:30 AM and leaving at 07:00 PM like the traders on the trading floor. And so in terms of work-life balance for what you're compensated bonus, all of that asset management has a good work-life balance and it reduces and shortens as you get more senior and as you progress throughout your career. So Android, the work-life balance to the people. So the people in nasa management are and were really nice. You get a good mix of individuals who have families, who are young, who are, you know, very career focused, very ambitious, very driven, high calibre individuals. And naturally when you're around those types of people, you tend to get the best out of yourself as well. You're more driven, you're learning a lot more. You're around circles and individuals who are very bright and allows you to learn a lot from these individuals, not just about yourself and the working environment, but your technical expertise, how to build strong clan relationships. You can learn from the best salespeople. You can learn about the markets, one of the best investment professionals. And so the people in asset management, a very high caliber, they're very switched on and it's always good to be around those people throughout your career. It goes without saying the pay is great, the compensation is great for the work you're doing. You start off an above average base salary and then you get a bonus component tied to that at the end of the year. And so that was an added bonus, the compensation for the work that you're doing, work that you are enjoying doing is great. And so that's another thing that I really enjoyed about working in asset management. And then last but not least, the nature of the work in asset management. Yes, it's hard to see the impact of the work that you're doing. But at the end of the day, the end client, if you're working with pension schemes, for example, the implant is the retired person. If you're working with insurance companies, it's the people that are paying for insurance. And so there can be a sense of real meaning and purpose behind the work that you're doing. And generally, when you are building client relationships, taking money from them, investing into the financial markets, the general nature of the work that financial markets, asset management, fund management space, all of that is very interesting. It was very interesting to me. And so that's another thing that I really enjoyed about working in asset management. 18. Investment consultants: Investment consultants. So this is a very important part of asset management and specifically for pension fund clients. Now every pension fund in the UK, for example, is legally required to have a professional advisor, or in this case, they are investment consultants. So investment consultants, examples include Willis Towers, Watson, Aeon Hewitt, KPMG, PWC. There are various different consultants. These consultants or investment consultants. They are responsible for making sure the Pension Funds choose the right asset manager. So let's take an example. Let's say Microsoft has a pension fund. That pension fund is responsible for having an investment consultant in this case, let's say it's KPMG. So KPMG is the investment consultant that is responsible for helping Microsoft pension fund choose the best asset manager. So then the investment consultant, KPMG is going to go and talk with Goldman Sachs Asset Management, pimco, BlackRock, JP Morgan asset management, et cetera, et cetera. And it's going to do is research on the different offerings that these asset managers have. And then asset managers are going to pitch to the investment consultant and the client and say what they offer for the client, say how they can achieve the clans return objectives, how much they're going to charge, then basically pitch themselves to the client as well as the investment consultant and saw the investment consultant charges the plan a fee for that service. And the investment consultant is very, very technical. So they go into meetings with asset managers and they are very technical meetings. And so as such, asset management firms typically have a consultant relations team, so it's like a sales team, but this team is responsible for managing the relationship, not with the pension fund. What would the investment consultant? So in this case, the consulting sales team are going to be managing relationships with KPMG. So anytime KPMG have question, the consultant relations team will reach out to them and service them as a client. And it's important to impress the consultant because the consultant on locks the door or the opportunities to the pension fund. And so that's an insight into the investment consultants role within the world of asset management. The next video is going to focus on answering ten common questions that I get asked whenever I'm doing talks at university or when people are commenting on my YouTube videos. So I'll see you in that video. 19. 10 common questions: Can you break into us and management from the backoffice or the middle office of an investment bank? Yes, you can. And it happens so often. So if you're in risk or if you're in operations compared to if you're in human resources or finance or any other back-office division, those divisions on exactly close to the asset management division in terms of the nature of the work, whereas operations and risk, the nature of those areas the work is similar to asset management operations. People often deal with plan on boarding or deal with clan issues that arise. The risk division often works closely with the traders and the investment professionals. And so after you do a few years in those areas, it's very common for people to apply and move forward into the asset management business because they have the expertise. So yes, it is possible. It might just take you a year or two to build expertise, and then that builds a case for you to be suitable to move into the asset management business. What's the best way to prepare for asset management interviews? So I always tell candidates this you want to focus on four key areas. One, why do you want to join this company? Specifically, know your answer to that credit 1P gel with all your details and information and research on why you want to join the given company. So that's the company. Secondly, why management? What is it about asset management that makes you attracted to it? Why do you want to be a salesperson or an investment or product person? Specifically one page or your research or your answers on that one page or so, that's two p21 pages you've got. And then the third one is going to be y. You specifically, what do you bring to the table? Create a novel one. Peja, put all your answers on there. What makes you different from everyone else? This is where you tie into your previous experiences, results achieved, all of that on one page. And then last but not least, number for one page on commercial awareness. What's going on in the current environment that is relevant, that is useful for you to talk about in interviews because they will always ask you about the marketers or current affairs. And so it's always good to stay up to date and you can touch on some of the resources that I mentioned in a previous video about how to stay up to date with commercial awareness when it comes to preparing for interviews. How can you strengthen your CV for asset management? So one is due relevant experience, spring weeks or internships. If you're in university, if you're not, then you should leverage any finance experience that you have. An always consider positioning your CV to the role that you're applying for. So even if you've got experience that is an asset management related, you're going to have developed your communication skills, teamwork skills, interpersonal skills, analytical skills, attention to detail, so on and so forth. And so the key thing is to position your previous experiences even if they were irrelevant, the key skills positioned them in your CV. So it shows that you know what's expected in asset management and you had developed those key skills. For example, if you were a barista at Starbucks, you might say you develop your teamwork skills, leadership skills, your interpersonal skills, and these are all relevant for a sales position in asset management. If you want to apply for a trading role or a product specialist role or an investment role. You can say you've got a portfolio at demo account or a portfolio of investments that you spend your own time and money investing in. And these are the returns that you've achieved over the last six months to a year, and mentioned that in your CV and that shows the reader that you are interested. You're genuinely curious about the markets and you're spending your own time and money to learn more about the markets. And this is related to the role that you're applying for. And so it's those types of small things that can boost your CV when applying to asset management companies, what degree course should I study to break into Asset Management? This is really open. It doesn't really matter what you study. Just focus on getting the best grade you can. Most companies want a to one or above. And if you get that you're in good stead your wall position to get into an interview. What gets you? The interview is a strong cover letter and a strong CV. And those need to be selling you as a candidate who potentially has all the right skills and competencies to succeed in a sales position or a product position. As previously mentioned, what should I include in my cover letter? So a cover letter I've actually done a previous course on this topic to create a strong cover letter for banking, finance consulting, your cover letter should consist of three key points. You should answer with one paragraph. Why do you want to work for this company? In the second paragraph, you should answer the question, why do you want to work in asset management? And in the third paragraph you need to answer, why should they hire you specifically? So these are the key ways to structure your cover letter. And the key point is that you need to touch on always use relevant examples and experiences where possible. And if you can't, if you've met someone in the industry or in the organization, name, drop them. Say you met soul and soul who's in this business unit or this division, and they told you and then mentioned something good about the organization or something you learned. And it just shows them that you've taken the initiative, you're proactive, and it shows that you've gone above and beyond compared to the other candidates. And so it will make you stand out and it will make your cover letter stand out as well. What steps do you have for commercial awareness discussion is, it goes back to the video that I did on the useful resources. Just stay up-to-date. Find an area of asset management that genuinely interests you. And then naturally reading about those topics will be easy. You don't want to force yourself to stay up to date about content that you are not interested in. So find the area within Asset Management that interests you most, or which clients specifically interest you most. Are you more interested in insurance companies or are you more interested in pension schemes or sovereign wealth funds? And then stay up to date with the intricacies of what's going on in the industry relevant to that client. And that will naturally stand out in an interview when you can have that conversation with the person in front of you. What is the difference between asset management and private wealth management or private banking? In essence, they're both the same. You're taking money from clients and investing it in the capital markets or the financial markets. The key difference is in asset management, your clients are logical operations, pension schemes, insurance companies, sovereign wealth funds, and in private banking or private wealth management, your clients are high net worth individuals and family offices. So the amount getting invested in private wealth management or private banking tends to always be smaller than the sums in asset management. And the plants are smaller as well as individuals as opposed to corporations. So that's the key difference. Do you have any other advice for applications when you're applying to any asset management firm, I would definitely encourage you to mention in your application, if you have a preference for the role you're applying for. So for example, if you're applying for a grant scheme or an internship, oftentimes, you know, it's not specific. It's not like an application to a product roll or an investment role or a sales role. But if you know you want to go into more of a SalesRole as opposed to an investment. Raul mentioned it in your application and then the people hiring you to a hiring manager, I might be able to guide your application to the relevant team. So it's always worth doing that because you don't want to play for a role and asset management and you want to go into cells, but you didn't specify and you end up in an investment role and you hate it or vice versa. So always specify in your application what type of roles you're interested in or even if you don't want to be outright and say what Rhonda interested in. You can say, you know what, your key strengths, so you can hint. I would say my key strengths are interpersonal skills, building relationships, pitching, public speaking, for example. And so that naturally puts me in the pot of salespeople, as opposed to saying, I have detailed technical knowledge on equities and fixed income that naturally says product and investment. So small hints in your application like that can make a big difference to where you end up obviously at the more senior level, if you're applying as an experienced professional, you would be applying for a specific role. So it would say in the application, this role is for an investment professional in equities, or this role is for a distribution person in the UK sales team, for example, can I have a generic all-purpose cover letter? The answer is, I wouldn't recommend that you should always cater your cover letter to the organization that you apply to. So why the firm, why Asset Management tweet goes? Why You can stay the same for the most part, but why the firm, anything specific to the organization should be adjusted accordingly because the more specific your answers and your cover letter and your CV to the firms you're applying to, the more chance you have of getting an interview and an offer. Last but not least, how easy is it to move internally? So a lot of people do move, like it's not very common. By half seen salespeople move into investment and product rolls and you don't really see it as much the other way around. Because naturally I think investment and product, people tend to stick with the market side of things. They don't really move. Cells roles, why it does happen the other way. However, mobility is definitely an option if you go into a career and asset management and you feel like you're not in the right seat is not the be all and end all of your career. You can easily move around within the organization. You can move across different firms. The options are there if you don't feel like you're in the right seat, especially if you're an intern or a graduate, it's better to make that move sooner rather than later, you should just talk to the HR people or your manager and then explore your options from there, most organizations would rather change your seat within the organization as opposed to lose you to a competitor. So always think of it like that. Internal mobility is definitely an option. If you don't feel comfortable in your current position. 20. Class project: The course project for this skill share class is as follows. I want you to record an upload yourself or provide a written response and upload your answer to the following questions. One, why do you want to work in asset management? To which role, specifically within asset management do you want to work in? And Y, three, What type of asset manager do you think you are more suited to? Almost interested in abodes bracket asset manager attached to an investment bank, a pure play as a manager, like a pimco or BlackRock or a specialist, niche boutique asset manager specializes in a particular segment of the financial markets. Please keep video answers between 12 minutes for each question and written responses to less than 100 words for each question. Upload your video or written response for feedback from myself and the rest of your classmates on this course. Thank you.