Hitherto the vocation of stock brokers, portfolio management is all about selection and acquisition of securities and continuous purchase and sale thereof to optimise investment returns

With the deregulation of financial markets now a global phenomenon, the emerging worldwide money market is experiencing dramatic changes. As the Indian economy integrates with the world beyond, and the complexity and range of financial analyses and products multiply, the need for qualified financial advisors is becoming increasingly critical. That’s why there’s a spiralling demand for portfolio managers who help investors make intelligent and informed choices about money investment options. Therefore portfolio management is likely to be high on the list of career options in the coming years for those good at numbers-crunching and money management.

Portfolio management is all about selection and acquisition of securities and continuous purchase and sale thereof to optimise investment returns. Portfolio managers recommend effective investment planning after evaluating factors like fiscal and monetary policies of national governments, industrial and economic environments, business performance of companies and their impact on sectoral and corporate growth.

It’s only over the past few years that portfolio management — hitherto the vocation of stock brokers — has become an attractive career option. Today number crunchers such as chartered accountants, certified financial analysts, cost and works accountants, company secretaries and MBAs in finance are opting for this career in a big way. Success in the job requires information gathering and analytical skills, lateral thinking, quick decision-making and ability to work under pressure.

No specific study programmes are mandated for portfolio managers in India. However a one-year certified portfolio manager (CPM) programme leading to a Certified International Investment Analyst (CIIA) diploma awarded by the Association of Certified International Investment Analysts (ACIIA), London is a formal study programme. This programme has been developed by the Council for Portfolio Management and Research (CPMR) for the benefit of students and professionals engaged or interested in portfolio management and investment analysis. On completion of the CPM programme, membership of CPMR entitles diploma holders to use the designation of certified portfolio manager. The CIIA programme is offered in India by ICFAI University through its affiliate — Council for Portfolio Management and Research.

Portfolio managers usually start as security analysts and bank trust officers until they acquire sufficient experience of managing money to graduate to portfolio manager status. “With huge FII (foreign institution investment) inflows into the stockmarket, liberal taxation policies, low bank deposit interest, public interest in listed securities is at an all time high. As a portfolio manager I select and manage securities to meet the objectives of the firm’s clients. I meet with clients, measure their tolerance for risk, duration of investment and income expectations,” explains Shaival Dharia, investment advisory manager of Khandwala Securities Ltd, one of Mumbai’s top brokerage houses, which has been in business for seven decades and has been a listed company since 1994.

Dharia began working as a dealer in equities while studying in H.R.College of Commerce, Mumbai from where he graduated in 2001. Subsequently he enrolled in the Nirma Institute of Management, Ahmedabad which awarded him an MBA (finance) in 2004 following which he was immediately signed up by Khandwala Securities.

“The floodgates of opportunity have opened up in the portfolio management profession which has been attracting a rising number of youngsters during the past three-four years. Portfolio managers are being given red carpet welcome by brokerage houses, mutual funds, multinational banks, insurance companies and debt market advisors. They command very good pay packages with huge incentives. After two to three years’ experience the package could be as much as Rs.12 lakh per year,” says Dharia.

Remuneration apart, it’s an exciting new age profession as well. “The stockmarket fluctuates all the time, therefore we need to make informed decisions on the run. We have to identify buying or selling opportunities at the right time for our clients, who repose faith and trust in us to get them maximum returns. Moreover dealing in all types of scrips and securities forces you to become knowledgeable about every industry. Therefore you are learning consistently,” avers Dharia.

With too few portfolio managers available and numerous employers chasing them, Dharia believes there’s a big future for young people qualified for this profession. “At the moment only a small percentage of the population is investing in listed securities. With per capita incomes rising and the middle class expanding, more people will start investing in the stockmarket. They will need the advice and services of portfolio managers. For example BPO (business process outsourcing) companies where a lot of youngsters are earning a lot of money but are not aware of saving and financial planning methodologies. This is a promising market for us. With more youngsters opting for this career, it might become mandatory in India, like it is abroad, to possess a qualification in portfolio management, which will be a welcome development,” says Dharia who is quite clearly the right man in the right job at the right time.

Indra Gidwani