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Key Roles and Qualifications in the Investment Management sector
The main roles in the investment management sector are as follows:
In each section you will also find links to the main professional bodies that provide further information and qualifications for anyone considering employment in one of the roles.
Fund Managers and Analysts
Fund managers decide how to invest the money held in a fund. The fund could be a pension fund, an insurance fund, an investment fund, such as a unit trust or open-ended investment company, an investment trust or a private client portfolio. They invest in line with the fund’s objectives, which are stated up-front. Depending on these objectives, they may invest in a selection of assets: the UK or overseas stockmarkets, namely shares and fixed interest securities or bonds; in money market instruments and cash; in various currencies, in property and in derivatives, futures and options and other financial instruments.
Fund managers have to be authorised by the FSA to practice and to qualify they need to pass exams. The main UK qualification they take is the Investment Management Certificate (IMC) run by the UK Society of Investment Professionals (UKSIP). However, many are now qualified Chartered Financial Analysts meaning they have studied for 3 - 5years and have passed the three stage, globally recognised CFA. Further information is available from the CFA Institute.
Investment Analysts work with fund managers in deciding how to invest a fund’s assets in the various markets. They also take the IMC or CFA and often go on to be fund managers. They may also work for brokers and investment banks, on the so-called sell-side, from where they supply research to investment managers, who are on the buy-side.
Investment Operations and Administration Roles
This comprises all the processes that are involved in managing a fund, other than the actual choice of assets, which are the responsibility of the fund manager. People specialise in different areas and the processes include: performance measurement, dealing and settlement, custody, fund accounting and administering private clients as well as the servicing of products such as unit trusts, OEIC’s; and ISA’s/PEP’s which are investment wrappers.
“Overseers” (those who supervise an administration function) have to be authorised by the FSA in order to practice and so have the Investment Administration Qualification. This is taken in three stages and at the final stage the exam taken will reflect the individual’s specialist area. Further information is available from the Securities & Investment Institute.
Dealers
Dealers in investment management firms execute orders given to them by their fund managers. They deal in various types of financial instruments, i.e. equities, fixed income securities, derivatives etc, which are usually traded on an exchange through an intermediary i.e. a broker. Dealers’ work, on behalf of the fund manager(s), with brokers to ensure “best execution” for the fund managers’ clients.
They are authorised by the FSA and to practice need to pass the Securities Institute Certificate exams. Further information is available from the Securities & Investment Institute.
Investment Advisers
Investment advisers can work independently (as IFAs) or for a provider, such as a bank, insurance company or investment firm. They have to be authorised to practice and so to have a qualification. They can choose one of three qualifications all of which are the same level: the Investment and Financial Advice Qualification run by the Securities & Investment Institute; the Certificate in Financial Planning run by the Chartered Insurance Institute, or the Certificate for Financial Advisers run by the Institute of Financial Services. All three qualifications are new following a review conducted by the Financial Services Skills Council.
Investment Advisers can then take more exams reflecting their advanced knowledge and specialist knowledge. For further information on adviser qualifications contact the Financial Services Skills Council.