How To Become A Portfolio Manager: A Step-By-Step Guide (2024)

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Becoming a portfolio manager takes a lot of time and effort, but if you have the right skills, it can be a worthwhile venture. Portfolio managers often start out as financial analysts. With several years of experience—and professional certifications—they can work their way up.

Portfolio managers need the right blend of analytical and personal skills. They manage teams of analysts and work with clients to create financial goals and continually monitor their mix of assets. Portfolio managers must be resilient and strategic leaders—skills learned over years of professional development.

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What Do Portfolio Managers Do?

Portfolio managers supervise investment portfolios for their clients, usually businesses or wealthy individuals. These portfolios may include securities and other investment products. Portfolio managers might work for hedge funds, insurance companies, wealth management firms or other sectors of the securities industry.

Role and Responsibilities

Portfolio management is a senior position in the financial industry. These individuals often manage teams of analysts who perform research and provide recommendations to create and execute financial plans for clients.

Portfolio managers then make the buy-and-sell decisions, continually reviewing the investment mix to make sure it’s profitable.

Career Advancement

Typically, portfolio managers work their way up from early-career financial or investment analyst roles. These entry-level jobs allow new employees to get acquainted with the investment decision-making process over several years.

As professionals build their client base, prove their skills and earn certifications such as the Chartered Financial Analyst (CFA)® designation, they can work their way up to portfolio management.

For many, portfolio management is the final step in their career. However, portfolio managers can also reach senior leadership roles, such as head of portfolio management. They might also start their own firms. Since senior portfolio managers report to their chief investment officers, this role can also be a stepping stone to an executive position.

Skills for Portfolio Managers

Being a portfolio manager requires a combination of communication skills and investment expertise. These professionals oversee investment strategies, create financial forecasts, measure performance and mitigate risk. If a portfolio performs poorly, portfolio managers have to readjust—and be held accountable to their clients.

How Much Does a Portfolio Manager Make?

Portfolio management is a high-level career path, with a salary to match. The median wage for financial managers was $139,790 in May 2022, according to the U.S. Bureau of Labor Statistics (BLS). That’s significantly higher than the $46,310 median pay for all workers.

The top 10% of these workers earned more than $239,200, the BLS reports, while the lowest 10% earned under $79,050.

The CFA Institute conducts its own salary survey of charter holders. These portfolio managers report a median base salary of $126,000. That figure increases to $177,000 when considering all compensation, such as bonuses and long-term incentives.

Portfolio managers are in high demand, too. The BLS projects employment for financial managers to grow by 16% from 2022 to 2032. This rate is much higher than the projected 3% growth for all occupations during that time frame.

How To Become a Portfolio Manager

To become a portfolio manager, you need to work your way up within the financial industry. A bachelor’s degree qualifies you for an entry-level analyst position. After a few years of experience, you can earn certifications to prove you have the skills to be a portfolio manager.

Complete a Bachelor’s Degree

In almost all cases, the first step is to earn a degree—preferably in a related subject, such as a bachelor’s degree in accounting or a business administration bachelor’s. It isn’t necessary to get a master’s degree yet, but that can come in handy when you’re seeking a promotion down the line.

Gain Experience

While you’re in school, consider taking on a summer internship. This will help you get acquainted with the industry and make sure it’s the right fit.

After earning your bachelor’s degree, you are eligible to work as a junior financial analyst. Junior analysts are responsible for analyzing financial trends and providing investment recommendations. These professionals often work long hours, spending lots of time on research and documentation.

In time, early-career financial analysts may work their way up to senior analyst positions. These employees manage teams of junior analysts, compile their findings and provide recommendations directly to clients.

Earn Certification and Licensure

In most cases, senior analysts who aim to become portfolio managers must first earn certification. The CFA credential is one option. The Certified Financial Planner (CFP)® designation is another popular pursuit for portfolio managers. Many portfolio management professionals must earn licensure through the Financial Industry Regulatory Authority (FINRA).

Network through Professional Organizations

Anyone who earns the CFA or CFP certification can leverage those groups into new opportunities. Through continued education and networking, analysts can become portfolio managers.

Several professional organizations offer benefits, too. For example, the Portfolio Management Institute and the National Association of Active Investment Managers both provide professional development, conferences and networking opportunities.

Consider Graduate Education

Earning a master’s degree can be helpful when advancing to a senior analyst role, especially for portfolio managers. Some schools even offer a master of financial engineering program. Yale, for example, has a master’s degree in asset management.

Certifications for Portfolio Managers

Many portfolio management roles require candidates to hold certifications. The most common certification for these professionals is the CFA designation. CFP certification is popular among portfolio managers as well.

Moreover, depending on the types of assets they manage, many portfolio managers are required to obtain licensure through FINRA.

CFA Charter

Perhaps the most prominent certification for portfolio managers is the CFA credential offered by the CFA Institute. It takes years to earn this charter, which focuses on investment management. Candidates must pass three increasingly complex exams, which aren’t offered frequently. The first exam is offered three times per year. The second is offered twice, and the final exam is offered only once.

On average, successful students spend more than 300 hours studying for each level of the CFA exam. Even with a significant time investment, about half of students fail the exam. The 10-year average pass rates for each level range from 41% to 52%, according to the CFA Institute.

Besides the exam requirements, candidates need a bachelor’s degree and 4,000 hours of qualified work experience. They must also provide a few professional references and apply. Finally, charter holders should have an international passport and complete a Professional Conduct Statement form.

The CFA charter is costly, too. There’s a one-time fee to enter the program, plus exam fees for each level. In total, it costs between $3,050 and $3,950 to become a CFA charter holder. CFA Institute membership costs $299.

Certified Financial Planner

The CFP certification is offered by the CFP Board of Standards. Unlike the CFA charter, this certification focuses on managing individuals’ portfolios and financial planning. CFP professionals are bound to act as fiduciaries, meaning they act with their clients’ best interests in mind.

The CFP exam consists of two three-hour sessions, taken in one day. To sit for the test, candidates must complete coursework through a qualified CFP program. On average, that takes 12 to 18 months, the CFP Board says. Candidates must hold a bachelor’s degree as well, which can happen either before or after passing the exam.

The CFP certification requires 6,000 hours of professional experience or 4,000 hours of apprenticeship. The final step is to complete an ethics declaration and pass a background check.

The registration fee for the exam depends on when you register. There is an early rate of $825, a standard cost of $925 and a late-registration rate of $1,025. There is also an annual CFP certification fee of $455.

Securities License

Many securities professionals need to be licensed through FINRA, depending on the types of assets they work with. To receive FINRA licensure, project managers must pass two exams: general knowledge of the securities industry, and the Series 7 exam, which requires employer sponsorship. They can then be registered as a General Securities Representative.

In addition, any portfolio managers who manage more than $25 million need to register with the Securities and Exchange Commission.

Frequently Asked Questions About Portfolio Managers

What qualifications do you need to be a portfolio manager?

Portfolio managers need at least a bachelor’s degree, and sometimes they need a master’s degree. They should also complete several years of experience as an analyst in the finance industry. Usually, hiring managers look for professional certifications as well.

What skills do portfolio managers need?

Portfolio managers need strong skills in the financial industry, including asset management and risk management. They need communication skills to work with clients, set goals and analyze the portfolio to make sure it’s profitable. Strong math and computer skills are necessary, too.

Do you need an MBA to be a portfolio manager?

An MBA is not required to be a portfolio manager, but having a master’s degree does help. This degree doesn’t have to be in business administration; finance and economics are popular options for graduate study as well.

How To Become A Portfolio Manager: A Step-By-Step Guide (2024)


What are the steps to becoming a portfolio manager? ›

Steps to Become a Portfolio Manager
  1. Step 1: Get a Bachelor's Degree in Finance. ...
  2. Step 2: Apply for Financial Analyst Jobs. ...
  3. Step 3: Learn In-Demand Portfolio Management Skills. ...
  4. Step 4: Learn Advanced Financial Concepts. ...
  5. Step 5: Get the Required Licenses and Certifications. ...
  6. Step 6: Join Professional Finance Associations.

Can you be a portfolio manager without a CFA? ›

Most employers require portfolio managers to hold financial analyst certifications. The most prominent certification in the field and in demand by employers is the Chartered Financial Analyst (CFA) designation awarded by the CFA Institute.

How do I prepare for a portfolio manager? ›

Portfolio managers need at least a bachelor's degree, and sometimes they need a master's degree. They should also complete several years of experience as an analyst in the finance industry. Usually, hiring managers look for professional certifications as well.

What is the best certification for portfolio management? ›

Portfolio Management Professional (PfMP) ®
  • Certified Associate in Project Management (CAPM)®
  • Project Management Professional (PMP)®
  • Program Management Professional (PgMP)®
  • Portfolio Management Professional (PfMP)®
  • PMI Agile Certified Practitioner (PMI-ACP)®
  • PMI Risk Management Professional (PMI-RMP)®

How to be a portfolio manager with no experience? ›

How to become a portfolio manager
  1. Earn a bachelor's degree relevant to finance. ...
  2. Obtain experience in the financial industry. ...
  3. Pursue a graduate degree in finance. ...
  4. Gain experience as an analyst. ...
  5. Earn certification and licensure. ...
  6. Join professional organizations or associations. ...
  7. Apply for a portfolio manager position.
Feb 3, 2023

What qualifications do you need to be a portfolio manager? ›

Portfolio managers need to have a developed background knowledge of finance and experience with investments to succeed in the field. Some employers might also look for portfolio managers to have a master's degree in finance or a related major, such as economics or business.

Can I get my CFA without a degree? ›

The short answer is, again, no. The CFA Institute simply requires you to have a bachelor's degree (or equivalent) or be in the final year of your bachelor's degree program. You'll also need to have four years of relevant work experience, and, of course, you must pass all three levels of the CFA exam.

How many years does it take to become a Portfolio Manager? ›

No one ever “becomes” a Portfolio Manager from outside the finance industry; you need a track record and years of experience managing money first. The four most common paths to PM include: Perform well over 5-10+ years and get promoted internally (possible at MM funds; less likely at many SM funds).

Is a Portfolio Manager a stressful job? ›

Yes, the job of a portfolio manager can be quite stressful.

What is the average income of a portfolio manager? ›

While ZipRecruiter is seeing annual salaries as high as $187,500 and as low as $37,000, the majority of Portfolio Manager salaries currently range between $65,500 (25th percentile) to $130,000 (75th percentile) with top earners (90th percentile) making $153,500 annually across the United States.

What is the daily life of a portfolio manager? ›

A day in the life of a portfolio manager is a blend of analysis, decision-making, client communication, and market monitoring. It requires a strong understanding of the financial markets, excellent communication skills, and a commitment to staying up-to-date with the latest developments in the industry.

What is the highest salary for a portfolio manager? ›

Portfolio Manager salary in India ranges between ₹ 3.0 Lakhs to ₹ 35.1 Lakhs with an average annual salary of ₹ 12.3 Lakhs. Salary estimates are based on 3k latest salaries received from Portfolio Managers.

Which company is best for portfolio management? ›

List of Top Asset Management Companies in India 2024
  • ICICI Prudential Mutual Fund. ...
  • HDFC Mutual Fund. ...
  • Nippon India Mutual Fund. ...
  • Kotak Mahindra Mutual Fund. ...
  • Aditya Birla Sun Life Mutual Fund. ₹ 315,777.58 crores.
  • UTI Mutual Fund. ₹ 286,593.27 crores.
  • Axis Mutual Fund. ₹ 266,826.23 crores.
  • DSP Mutual Fund. ₹ 138,986.33 crores.
3 days ago

How to get a portfolio certificate? ›

You need to pay an application fee of Rs. 1 lakh and a registration fee of Rs. 10 lakh to acquire a portfolio manager certificate from the SEBI. Further, you must renew your certificate every 3 years by paying a renewal fee of Rs.

How much does portfolio management cost? ›

‍Advisor (Management) Fees

The industry typically refers to this as an investment management fee and averages between 1-2% of assets (i.e. A $100,000 investment could cost you between $1,000 - $2,000 annually).

How many years does it take to become a portfolio manager? ›

You will need between 5-6 years to get Bachelor's and Master's degrees and then will have to work for about 5 years or more as an analyst and senior analyst before becoming a hedge fund manager. While the BLS reports that the median annual portfolio manager salary was $81,590 in 2019, salaries vary.

Do portfolio managers make a lot of money? ›

In your position as a portfolio manager, you'll earn an annual income that ranges between $73,659.21 and $232,407.51, with average annual earnings of $126,998.64.

What are the seven steps in portfolio management? ›

Processes of Portfolio Management
  • Step 1 – Identification of objectives. ...
  • Step 2 – Estimating the capital market. ...
  • Step 3 – Decisions about asset allocation. ...
  • Step 4 – Formulating suitable portfolio strategies. ...
  • Step 5 – Selecting of profitable investment and securities. ...
  • Step 6 – Implementing portfolio. ...
  • Step 7 – ...
  • Step 8 –


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