Pros and Cons of a Career as a Portfolio Administrator
Portfolio administrators, also known as portfolio managers, oversee a team of financial analysts to implement strategies that augment a company's portfolio. If you are unsure about starting a career as a portfolio administrator, the following pros and cons may help you in making a decision.
| Pros of a Portfolio Administrator Career |
|---|
| Quickly growing field (16% expected job growth from 2012-2022 for all financial analysts)* |
| High salary potential (median salary at about $79,000 in 2014 for all financial analysts)* |
| Opportunity for advancement to fund management position* |
| Education can transfer to other finance careers* |
| Cons of a Portfolio Administrator Career |
|---|
| Highly competitive field despite job growth* |
| Often requires licensure by the Financial Industry Regulatory Authority* |
| Graduate degree required for some positions* |
| Long hours are common (nearly 33% worked 50-70 hours per week in 2010)* |
| Requires frequent travel to visit companies and investors* |
Source: *U.S. Bureau of Labor Statistics (BLS)
Career Information
Job Duties and Responsibilities
Portfolio administrators usually work for portfolio management firms, including mutual fund and hedge fund firms, as well as banks and other financial services organizations. In this profession, you'll oversee a team of financial analysts to implement strategies that augment your company's portfolio. This involves evaluating current market trends and the company's financial resources to decide which investments will be the most beneficial, such as which industries, regions and products to invest in. You may also present investment strategies to investors through written reports and oral presentations as well as making investment recommendations to company executives.
Career Prospects and Salary
According the BLS, workers in the field of financial analysis are expected to see a faster-than-average job growth at 16% between 2012 and 2022. This rapid projected increase may be caused by new potential markets, an increase in portfolio complexities and market globalization. Due to a change in government regulations, you may also experience a greater number of openings in the private equity and hedge fund sectors. Despite growth, competition will still be keen due to the fact that the number of people drawn to this career outweighs the number of openings.
As of May 2014, the median salary for financial analysts was about $79,000. The highest-paying jobs were in the category of securities and commodities exchanges, which offered more than $124,000 on average per year.
What Are the Requirements?
Education
This profession usually requires a bachelor's degree in finance, accounting or a related field, like business administration, statistics or economics. A bachelor's degree in finance, for example, often includes courses in global business, marketing principles, business ethics, financial analysis and investments. Some programs also offer internships, which allow you to gain hands-on experience in the finance industry. You might benefit from taking electives in risk management and options pricing, which can be crucial to this career.
Licensure
Most jobs in the financial analysis industry require you to be licensed by the Financial Industry Regulatory Authority. Licensure, however, usually require sponsorship from your employer. As such, employers don't expect you to be licensed before they hire you, but you may have to become licensed in a specific period of time after being hired.
Useful Skills
There are a few basic skills that are required to be successful in this field, including understanding advanced mathematics, recognizing investment potentials and being able to work with large amounts of financial data. Other qualities and skills important for this career include:
- Superb attention to detail
- Highly motivated and career driven
- Ability to work on your own or with a team
- Advanced critical-thinking skills
- Ability to make important decisions under pressure
Job Posting from Real Employers
Employers tend to seek out portfolio manager with education and experience in finance particular to the employer's industry. You may also need to be proficient in Microsoft Office applications and the investment accounting software used by the hiring employer. Look through this sample of April 2012 job postings for an idea of what employers were looking for:
- A global investment advisory firm in Connecticut was looking for a portfolio administrator with a bachelor's degree in accounting or finance and at least three years of portfolio management experience. The employer also preferred applicants with proficiency in Microsoft Office and Eagle Star portfolio accounting software.
- A California financial services organization advertised for an administrator with a bachelor's degree and two years of experience in portfolio management. The ideal candidate is familiar with the Microsoft Office suite and Advent Software.
- An accounting company in Wisconsin looked for a candidate with a bachelor's degree in finance and five or more years of experience in commercial credit and collections, particularly working with distressed assets.
- A banking company out of Delaware was looking for someone able to manage loan and deposit accounts. The employer requires a bachelor's degree in a business-related field and 2-5 years of relevant banking experience. Education may be substituted for significant experience in retail and commercial banking.
- A New York City banking company was looking for a candidate who could do underwriting and credit monitoring in addition to portfolio management. Applicants should have a bachelor's degree and 5-7 years of banking experience, including 3-4 years managing commercial real estate portfolios.
How to Make Your Skills Stand out
Earn a Graduate Degree
While a bachelor's degree may grant you entrance to this career, you might increase your chances of being hired by completing a graduate degree program. In fact, the BLS reports that many employers require their portfolio administrators to hold Master of Business Administration degrees in finance. These programs can further develop your financial management skills and qualify you for advancement to position in fund management, which involves overseeing larger portfolios for single investors.
Get Certified
Certification is another means to advancement in the field. You might, for instance, earn the Chartered Financial Analyst designation offered by the CFA Institute. To qualify for this particular designation, you need to have a bachelor's degree, at least four years of professional work experience or some combination of the two. You'll then have to complete the CFA self-study program and pass a series of exams.
Alternative Career Paths
The same bachelor's degree that leads to a career in portfolio administration also leads to a variety of other finance careers. You may want to become a budget analyst or a personal financial advisor, both career choices that require a 4-year degree in finance, accounting or a related field and lead to relatively high salaries.
Budget Analyst
If you want a more general financial analysis career, consider budget analysis. As a budget analyst, you'll help organizations develop their budgets and make recommendations to reduce spending and increase profits. These professionals typically need bachelor's degrees in finance or accounting, though some employers require a master's degree. According to the BLS, budget analysts earned a median salary of around $69,000 as of May 2011.
Personal Financial Advisor
If you don't want to work for corporate entities and are more interested in assisting individuals with their spending, you may want to start a career in personal financial advising. Your role in this profession involves helping people decide how to spend their money, establishing financial goals and making investment suggestions. You'll also keep track of client expenses, factoring in risk when making decisions and reporting to clients on financial status. Depending on the type of advice you give or if you sell stocks and bonds, you may have to obtain licensure. The BLS reports that personal financial advisors earned a median salary of about $67,000 as of 2011.
