While both investment fund managers and investment bankers work in financial services careers, there is a significant difference between investment fund managers and investment bankers.These two positions entail differing job responsibilities, educational backgrounds, and interactions between financial firm employees and clients. There are also unequal earning potentials between these two types of financial services professionals.
Job Responsibilities
Investment bankers are typically employed by either an investment banking company or a commercial bank. They are responsible for negotiating transactions between two parties. They generate capital for companies and profits for investors by facilitating or providing advice regarding stock sales. On the other hand, an investment fund manager would be more likely to handle responsibilities like marketing for portfolio management services, analyzing mutual funds, and managing hedge funds. They typically work either for private practices or for financial organizations.
Educational Background
A bachelor’s degree is the baseline educational requirement for both positions. Also, an MBA degree can put candidates ahead when it comes to applying for jobs both as an investment banker and an investment fund manager, according to Zacks. The two types of job are also similar in that that both require good mathematical skills and an understanding of regulations and trends that influence financial markets. However, investment bankers can sometimes get a position with a bank or company with a liberal arts degree or a degree that’s unrelated to finance or quantitative sciences. Investment fund managers almost always must have a degree that’s directly related to finance.
Interactions
Both investment bankers and investment fund managers need to have good communication skills, because both positions require a lot of interaction with others. However, investment bankers will typically interact with a different clientele than investment fund managers.
Whereas investment bankers work with business professionals or company representatives when closing deals on investments, investment fund managers will be more likely to actually represent both consumers or businesses looking for advice on managing money. Of the two positions, interaction with clients is more common for investment bankers than it is for investment fund managers.
Potential Earnings
The earnings for investment bankers are typically a bit higher than they are for investment fund managers. While an investment banker can bring in a salary of $162,000 on average according to the Bureau of Labor Statistics, an investment fund manager will make $99,300 on average. Although investment fund managers should expect slightly lower earnings, they benefit from the fact that investment management is a slightly less volatile area of financial services than investment banking. Investment bankers might be more strongly impacted by downturns in the economy than investment fund managers. Another advantage of investment fund management is that investment fund managers tend to work less hours than investment bankers.
Related Resource: Become a Financial Planner
Those interested in a financial services career that offers the potential for very high earnings along with a bit of excitement might be best suited to investment banking while aspiring investment fund managers should be expecting a job that’s more stable and relaxed. It’s important that those interested in pursuing either of these two positions as a career understand the difference between investment fund managers and investment bankers.
