In the breakneck world of finance, financial professionals get tossed about along with their certifications, and sifting through them can be a challenge. An individual investor may not ever have occasion to deal directly with a portfolio manager, while a financial adviser's livelihood depends on close one-on-one interplay with everyday people and the personal financial milestones in their lives.
Roles and Workplaces
A portfolio manager is an upper-tier position in the asset-management world. Prior roles leading up to it include research analyst and junior PM. The financial adviser, on the other hand, is more of a mid-level position that people join after gaining at least five years of experience in investment planning, asset allocation and sales. You'll find portfolio managers working for mutual funds and pensions, while financial advisers may work at brokerage houses, banks or independently as their own small business.
The portfolio manager and the financial adviser are two different financial creatures. The portfolio manager selects a portfolio of stocks, bonds and other financial assets according to the investment objectives of the mutual fund or other company he works for, in order to generate the highest returns for the fund. The financial advisor is a generalist advising clients on an individual basis about their retirement, investment and estate planning goals. A financial adviser may buy or sell a set of funds to meet a client's financial objectives, but he does not make trading decisions within those funds.
Education and Training
Portfolio managers are generally expected to have bachelor degrees, as well as masters degrees in business administration. The Certified Financial Analyst credential is an industry designation that provides additional clout for the portfolio manager. Financial advisers may have a variety of different degrees and backgrounds, as well as industry credentials of the Series 7 and 63, which are the licenses to sell securities.
Day in the Life
On any given day, the portfolio manager might gather together with her analysts to review the investment strategy and make adjustments on asset selections to improve the alpha rating of the fund or funds she oversees. Switching gears, she might make a sales call to a potential institutional client to discuss her fund's strategy, or touch base with an existing client to discuss the fund's performance. For the financial adviser, the day is comprised of generating new clients and making recommendations appropriate to client financial goals and risk appetite on matters as diverse as life insurance, mutual funds, taxation issues and estate planning.
- Financial Industry Regulatory Authority (FINRA). "Series 7 -- General Securities Representative Exam." Accessed Oct. 12, 2020.
- Financial Industry Regulatory Authority (FINRA). "Series 66 -- Uniform Combined State Law Exam." Accessed Oct. 12, 2020.
- CFA Institute. "CFA Program: Exam Dates, Cost, and Registration Fees." Accessed Oct. 12, 2020.
- Global Association of Risk Professionals. "Financial Risk Manager (FRM)." Accessed Oct. 12, 2020.
Timothea Xi has been writing business and finance articles since 2013. She has worked as an alternative investment adviser in Miami, specializing in managed futures. Xi has also worked as a stockbroker in New York City.