Everything you need to know
Buy side 101
Before considering a career on the buying side, consider the following key points:
· Structures on the buy side tend to be flatter than those on the sell side.
· This lean structure is made up of a couple of portfolio managers and a small group of analysts, which means that opportunities could be limited.
· Hiring usually takes place laterally, or the recent trend is to hire from key performance objectives (KPOs).
· The best opportunities are local, in India.
· Integrity is paramount because you are investing the wealth of your clients. Bad decisions have serious repercussions.
· Performance is a daily measure of whether or not you have met your benchmark. You are only as good as your last NAV.
· Technology replaces many roles, but it is not a deciding factor on the buy side.
· It is an exciting career option despite being a highly regulated industry.
The importance of the CFA® program
If you have a background in finance, accounting, economics or business and are looking for a career in asset management, the CFA program is the right way to go. As a three-part review, the CFA program tests the fundamentals of investment tools, asset valuation, portfolio management and wealth planning.
You earn the right to use the CFA® designation and become a CFA charter holder after completing the program and applying and after being accepted by the CFA Institute. CFA charterholders have the opportunity to hold executive and leadership positions in investment management, risk management, asset management, and more.
Excerpts from the Q&A session
Gauri’s presentation was followed by an interactive Q&A session that answered real-world questions. Here are excerpts from the informative and insightful responses given by Gauri:
· I passed level III. I am looking to join as an analyst or portfolio manager in a global asset management company. Where can I apply?
Since it is a flat structure, global businesses, in reality, are driven cyclically. This CFA charter is the only degree relevant to capital markets as these are equity markets where the 10,000 hour rule is required. This aspect is essential to assimilate before developing a sense of the market and an instinct of what to do. The ideal would be to get your feet wet, whatever the organization. Opportunities will abound because there are many and hiring is cyclical.
· How do I switch to asset management from another domain?
The way to do this is to keep yourself informed of the markets, keep up to date with what’s going on, and look for opportunities where they exist. Looking for opportunities in a global company might be a bit of a tricky proposition. On the contrary, looking for them in a KPO may be a better way to gain sideways entry and wait for the cyclic return. Expand your horizons and seek to move beyond a portfolio manager/analyst role. Compliance and operations are areas of massive growth right now, and these can be attractive options for getting involved in capital markets.
· Which role has faster pay or other features that are preferred over others?
In terms of compensation, there is no precise rule. Asset managers come in all shapes and sizes. Generally speaking, the front office can offer higher compensation than the back office. Also, international managers usually start higher than national managers. However, there is no cap for top talent anywhere, which means there is a very profitable market.
· How does a CFA charter help besides being a CPA or an MBA?
The status of CFA Charterholder is essential. Having the coveted CFA charter can give you a better understanding of your fiduciary obligations. For example, two important and fundamental topics for the capital markets are dealt with in the chapter “Portfolio management and ethics”. In addition to the hours of study, landing a position as a wealth manager with the CFA charter is considered a badge of honor. Having an additional diploma is a plus.
Capital markets, regardless of automation, are always about relationships. Basically, regardless of the level of automation, two aspects will never go away. The first relationship is between a fund and its clients. The second relationship is between the buy side and the sell side. Basically, asset management is a relational business. Combined with the ability to build trust, drive technology, and create relevant customer experiences, asset managers must also
– be more attentive to the needs of customers,
build a deeper relationship with customers,
make accountability a priority, and
· provide personalization and use technology to play a role in differentiation.
Watch the full webinar and learn more about building great careers in asset management as well as gaining an unbeatable edge through earning the CFA charter: