Investment Manager

What is an investment manager?

An investment manager is an individual or firm that designs and implements investment strategies, manages portfolios, and handles day‑to‑day buying and selling of securities on behalf of clients. They monitor markets, measure performance, settle transactions, and adjust holdings to meet clients’ goals and risk tolerances.

Key takeaways

• Investment managers handle financial planning, portfolio construction, and trade execution for individuals or institutions.
• They may operate solo or as part of large firms (e.g., BlackRock, Vanguard, Fidelity).
• Fees are typically charged as a percentage of assets under management (AUM) and may include performance and custody fees.
• “Investment adviser” is a legal term for an entity registered with the SEC or a state regulator; an investment manager is one type of investment adviser.

Roles and responsibilities

Investment managers typically:

• Develop investment strategies aligned with client objectives and risk profiles.
• Buy and sell securities and manage asset allocation across sectors (e.g., technology, healthcare, energy).
• Monitor portfolio performance and rebalance as needed.
• Communicate strategy, performance, and market views to clients and stakeholders.
• Coordinate with other financial professionals (tax advisors, estate planners) when appropriate.

Fee models commonly include a management fee based on AUM, and sometimes performance-based fees. For example, a 1.5% annual fee on a $5 million portfolio equals $75,000 per year.

Investment manager vs. investment adviser

“Investment adviser” is a regulatory term for an individual or firm that provides advice about securities and is registered with the Securities and Exchange Commission (SEC) or a state securities regulator. Investment managers, portfolio managers, wealth managers, and investment counselors are all types of investment advisers; they differ mainly in the services they emphasize (portfolio management, financial planning, brokerage, etc.).

Skills and qualifications

Common qualifications and skills:

• Bachelor’s degree in finance, economics, accounting, mathematics, or a related field; an MBA can be advantageous.
• Professional certifications such as Chartered Financial Analyst (CFA), Certified Financial Planner (CFP), or Chartered Investment Counselor (CIC).
• Strong analytical abilities to interpret financial data and market trends.
• Excellent communication and client‑relationship skills.
• Capacity to perform under pressure and make decisions in fast‑moving markets.

Compensation varies by experience, employer, and location; mid- to senior-level managers often earn six‑figure salaries.

How to become an investment manager

A typical career path:

1. Earn a relevant bachelor’s degree and pursue internships or analyst roles.
2. Gain experience as an investment analyst or associate.
3. Obtain required licenses (e.g., Series 65 or other relevant FINRA exams, depending on role and jurisdiction).
4. Pursue certifications (CFA, CFP, etc.) to deepen expertise and credibility.
5. Register with the SEC or state regulators as required based on business model and assets managed.
6. Progress to portfolio manager or senior investment management roles through demonstrated performance and client development.

Choosing an investment manager

When selecting an investment manager, consider:

• Investment philosophy and process — is it consistent with your goals and risk tolerance?
• Track record and documented performance, including risk-adjusted returns.
• Fees and expense structure — management fees, performance fees, custody fees, and commissions.
• Fiduciary status — does the manager have a legal duty to act in your best interest?
• Communication style and client service — frequency and clarity of reporting and meetings.
• Team depth and resources supporting research and trading.

Beginner investors may prioritize financial planning and education (e.g., a CFP). Experienced investors focused on security selection or advanced strategies may prefer a portfolio or asset manager.

Common questions

Is the CFA required?
No—CFA is not legally required, but it is a widely respected credential that many clients and employers value.

Is an investment manager the same as a fund manager?
Not exactly. Investment managers manage individual or institutional client portfolios and can focus on specific securities. Fund managers run pooled investment vehicles (mutual funds, ETFs) that combine multiple securities into a single fund.

Is an investment manager the same as a financial advisor?
“Financial advisor” is a broad, generic term. “Investment adviser” (with an “e”) is a legal designation for registered firms or individuals. An investment manager is a specific type of investment adviser focused on portfolio management.

Bottom line

Investment managers guide investment decision‑making and manage portfolios to meet clients’ financial goals. They combine market analysis, portfolio construction, trading execution, and client communication. Prospective managers typically have finance-related education, industry licenses, and professional certifications; investors should evaluate managers on philosophy, performance, fees, and fiduciary responsibility.