Asset Management Jobs Just Got Harder To Find And Keep

(Forbes) The 18,000 Deutsche Bankers who were laid off are creating a glut of asset management professionals looking for new jobs. If you want to work in the asset management industry, here's what you can do to stand out from the crowd  and protect yourself from the onslaught of people competing for your job.

Profit margins at active managers are under pressure because passive managers, which charge much lower fees, have outperformed most of them for the past decade. Many of the largest active management firms are losing assets and shrinking staff. But, these firms are still willing to pay for people with proven investment skill. That's what it takes to stand out from the crowd of applicants competing for a shrinking number of jobs.

Ways To Prove Your Investment Skill

The easiest way to prove your investment skill is if you managed a fund that outperformed its benchmark for five to 10 years. If your resume does not include such a stint, it gets harder.

If you managed a fund for 10 years that did not beat its benchmark, you have to give a good reason why that does not reflect your investment skill. Perhaps you can say that the fund's investment restrictions did not allow you to manage the fund as you would have liked. If you go this route, you have to be ready to say how you would have managed the fund if you had your way, and how much of a difference it would have made.

Having listened to hundreds of investment professionals make their case, I can tell you that they begin to sound like fishermans' stories about the big one that got away. If you want your story to be credible, you need to have something to back it up.

I've been advising those who worried for some time now about layoffs due to Brexit that they need to establish a track record that complies with the Global Investment Performance Standards (GIPS).

After you've been working for a few years, where you went to school becomes less important, and objective measures of how good you are at your job become more important. Most of the measures that can show how well you did your job are going to be owned by your previous employer. But a GIPS compliant track record is something you can own.

A GIPS compliant track record tells an employer how well your clients would have done if you had been given the latitude to choose investments as you see fit.

Research analysts will have an even tougher time finding another job than fund managers. The analysts don't get to make any investment decisions but are judged by the fund's track record all the same. If they don't have their own track record independent of their former fund they will have a hard time convincing other firms that they have the potential to become portfolio managers who can beat a benchmark.

A GIPS compliant track record speaks directly to your ability to deliver what all clients want -- good returns after all fees. That's why those who have a GIPS compliant track record stand out from the crowds of people vying for the same jobs.

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