Each sphere of business activities require financial expertise. Hence, there are diverse and a multitude of career opportunities to select for financially educated persons. Financial professionals take the responsibility of managing the capital and the finances critical to all businesses (Kochanek, 2008). We look at the two career options that a person with financial education may pursue along with essential skills the person possesses to be successful in the described position.
Portfolio managers develop and implement investment strategies for individuals or institutional investors such as mutual funds, hedge funds, banks, insurance companies, and pensions (Trudy, 1999, p-2). Their primary responsibility is creating and managing investment for the client. That they achieve by following a predetermined strategy for investment. To be successful, they acquire in-depth understanding of the market condition, trends, and overall economic outlook. Further, they often take the help of financial analyst and researchers to get a better understanding of the market conditions. They maintain a close relationship with the client to ensure investment objectives are met with current portfolio allocations.
Most portfolio managers do not start as a portfolio manager. After graduating aspiring portfolio managers often take up the job related to investment analysis. On achieving success as a financial analyst, they take up the role of the portfolio manager (Horton, 2016).
With increasing complexities involved in financial transactions, the role of risk managers in an organization has evolved to become indispensable. Risk management deals with identification and evaluation of uncertainties that is perceived to threaten the organization’s business objectives. It can also be seen as an exercise to continually look for opportunities and formulate risk management strategies to exploit those opportunities. The job of a risk manager is to address those risks in a structured way. Financial risk managers are involved in analyzing, assessing, or controlling potential liquidity risk, credit risk, and market risk. They also assess a non-market related financial risks. The job of financial risk managers may be an estimate of the amount of insurance that needs to be paid, or providing various investment strategies to guard against losses from exposure to volatility in the currency.
As can be seen from above descriptions, positions of both financial risk manager and portfolio manager have their own challenges and rewards. A person from a financial background aspiring to achieve success should make the selection based on his or her strengths and shortcomings. Both the profession requires a high degree of commitment and hard work. Both require a deep understanding of the financial market and analytic mind.
It may be mentioned that following the financial scandals and the global financial crisis in early 2000, risk managers have a greater role in corporate governance and corporate compliance (Kendrick, 2015, p-2) whereas the role portfolio managers has come under strain. A financial professional has better growth opportunities in the field of risk management. However, a financial practitioner reaches the pinnacle of his career on achieving success as a portfolio manager.
Each day in the life of a portfolio manager brings new challenges. He or she has to put up long hours every day to meet the demand of the job. But, each challenge brings new opportunities. How he or she copes with the daily pressure of expectations, defines his or her career prospect.
Horton, M. (2016, Feb. 18). Portfolio Manager: Job Description & Average Salary. Investopedia. Aug.20 2016, from http://www.investopedia.com/articles/wealth-management/021816/portfolio-manager-job-description-average-salary.asp
Jorion, P. (2007). Financial Risk Management Handbook, 4th Ed. John Wiley & Sons, Inc, www.elitebook.net. Retrieved Aug.21 2016, from http://web.ntpu.edu.tw/~yml/download/risk2011s/handout(15-2).pdf
Kendrick, A. (2015). The Changing Role of the Risk Manager. ACE European Group, London. Retrieved Aug.21 2016, from http://www.acegroup.com/eu-en/assets/ace_changing-role-of-risk-managers.pdf
Kochanek, D. (2008, Oct.12). Financial Career Options. Forbes. Retrieved Aug.20 2016, from http://www.forbes.com/2008/12/10/career-finance-banking-pf-ii-in_dk_1210careers_inl.html
Plimmer, G. (2011, Dec. 1). Working in Risk: the skills required for a rapidly developing and high-profile profession. The financial Times Ltd, ft.com. Retrieved Aug.21 2016, from http://www.ft.com/cms/s/0/8c452dfa-19af-11e1-9888-00144feabdc0.html#axzz4I2i3NsqJ
Trudy, R. (1999). Careers in Finance. VGM Career Horizons, NTC/Contemporary Publishing Group. Retrieved Aug.20 2016, from http://bookzz.org/book/1078238/378500