Investment Management Wso: A Lucrative Career Path?

Investment management is a highly desirable industry for MBAs recruiting at the top finance schools. It is a stable career with a more balanced work-life balance than investment banking. While investment bankers are on the sell-side, asset managers are on the buy-side. Investment bankers sell financial products, while asset managers buy them to manage for their clients.

Investment bankers work with companies to raise capital or acquire companies through M&A. Asset managers build and maintain investment portfolios for individuals and organisations.

Investment banking is a grind, with 70+ hour weeks being the norm. Asset management, on the other hand, offers a more appealing lifestyle with 40-60 hour work weeks.

Investment management is a great career path for those who are more quantitatively inclined, affable but not natural-born salespeople, and who prioritise a healthy work-life balance.

Investment management is a highly desirable industry for MBAs

Secondly, investment management provides a better work-life balance than investment banking. While investment bankers work extremely long hours, often 70-80 hours a week, asset managers typically work 40-60 hours a week and have weekends off, making it a more appealing choice for those who value their personal time.

Thirdly, investment management offers competitive compensation, especially for top performers. While starting salaries may be lower than in investment banking, asset managers can earn several hundred thousand dollars per year, with top portfolio managers at firms like PIMCO making around $25 million.

Finally, investment management is a good choice for those who want to pursue a career in investing. It provides a clear career path, usually starting as a research associate or analyst and working up to portfolio manager. It also offers the opportunity to work in prestigious finance jobs outside of major cities, such as private wealth management, which often comes with a view of the beach.

Overall, investment management is a highly desirable industry for MBAs due to its stability, better work-life balance, competitive pay, and focus on investing.

Investment management offers a more stable career than investment banking

The lifestyle is the most significant difference between investment banking and asset management. In investment banking, there is a lack of lifestyle as you put in an average of 80 hours a week. The work week in asset management is more along the lines of 40-60 weeks, and the weekends are completely your own. The intense work week in investment banking is conducive to burnout, which is why turnover is so high. There’s a reason everyone talks about the exit opps in investment banking—few people stay in the industry. Jobs in asset management pay nearly as well as banking (more in cases of top performers), and you work fewer hours. Because of these two reasons, asset management is incredibly appealing, which means turnover is far lower than in IB.

In addition, investment management isn't exclusive to major cities. Want to work in a prestigious finance job with a view of the beach? There's a job in asset management for that (often private wealth management).

Breaking into asset management is a process that involves a lot of luck. Generally, top asset managers only recruit from top target schools. They look for people with a track record of investing and want to be convinced that you are going to pursue investing as a career. Boutiques, on the other hand, rarely have openings due to low turnover. The teams at an asset management boutique are very small and tight-knit, and they’re willing to develop and promote talent from within. As such, finding a position with a boutique asset manager is more a shot in the dark than anything.

Investment management has a better lifestyle and culture than investment banking

The career trajectory in investment banking is also very clear, with well-defined roles and promotions. However, this can also be a negative as there is little room for flexibility. In asset management, the career trajectory is less clear, and performance plays a much bigger role in promotions. While this can be a negative for some, it also means that top performers in asset management can make far more than any banker. A portfolio manager at PIMCO, for example, will make something like $25 million, more than any Wall Street CEO.

In terms of culture, investment banking has traditionally been very cut-throat and aggressive. While this has changed in recent years, the fact remains that investment banking is a demanding career choice. Investment bankers should be aggressive and highly energetic, with a tireless work ethic. On the other hand, asset management tends to have a better culture as there is significantly less turnover and more development and promotion from within.

Breaking into asset management is also a less straightforward process than investment banking. While investment banking recruits from a wide range of schools and has a well-defined recruitment process, asset management tends to only recruit from top target schools. Additionally, boutiques in asset management rarely have openings due to low turnover. As such, finding a position with a boutique asset manager is more a shot in the dark than anything.

Investment management has a more varied career path

Investment management offers a more varied career path than investment banking. While investment banking is a specific division of banking, investment management is a highly desirable industry for MBAs recruiting at the top finance schools. Investment management is not exclusive to major cities, and there are many small AM shops.

Investment management is a career in investing, whereas investment banking is most notably a grind. The lifestyle is completely different, the compensation is comparable, and the career outlooks vary. In asset management, you choose investing as a career unless you choose to rebrand yourself, and hedge funds and other asset managers are your typical exit opportunities. In investment banking, leaving is the most typical exit opportunity, as people tend to feel symptoms of burnout within a few years.

The career trajectory in investment management depends much more heavily on performance than in investment banking. In investment banking, there is a clear, straight path in terms of promotions (analyst for 2-3 years, associate for 3-4 years, VP for 3-4 years, director, managing director).

The work-life balance is also a key difference between the two careers. Work-life balance is a misnomer in investment banking because work is life. Investment bankers are expected to prioritize work. This is not a Monday to Friday, 9-to-5 gig. Employees who are not comfortable working 80-hour weeks rarely last long in the industry. Even Sundays are not guaranteed off days for an investment banker.

Asset managers keep more reasonable hours. While a person's exact working hours vary based on their employer, 40-to-50-hour weeks are pretty standard in the industry, with occasional Saturday work required. The bonus here is that you tend to get weekends off for the most part.

Investment management is less exclusive to major cities

Unlike banking, private equity, and the like, asset management isn't exclusive to major cities.

Frequently asked questions