Top 30 Investment Management Interview Questions and Answers in 2023

The interview is the first opportunity for an employer to ask candidates more in-depth questions that will assist them in determining someone to hire. During the interview phase, hiring managers analyze the background and knowledge of each candidate. Therefore, those seeking employment in investment management might prepare for job interviews by anticipating questions and preparing responses. In this article, we give a list of frequent questions you may be asked during an investment management interview and sample responses you can use to formulate your own.

1. What Exactly Is Investment Management, In Your Own Words?

Management of an investment portfolio, or a collection of financial assets, is investment management. It may involve the purchase and sale of assets, the development of short- or long-term investment plans, the management of a portfolio’s asset allocation, and the formulation of a tax strategy. Investment management is performed individually or with the assistance of an investment manager. Portfolio management and asset management are additional phrases that relate to services that oversee a client’s investments. Investment management entails ensuring that a portfolio remains aligned with the client’s objectives, risk tolerance, financial priorities, and managing specific assets within a portfolio.

2. Why Are You Interested In Investment Management As A Career?

I would state two things: the first regarding the nature of investment management in general, and the second regarding my personality. First, investment management appeals to me because it enables me to assist clients over an extended period while maintaining a connection to the markets, which I enjoy observing. Second, I value independence and the capacity to wager on oneself, and any investment management position is quite independent.

3. How Effectively Do You Perform Under Pressure?

I am an individual who thrives under stress. Many investment management professionals must make quick decisions, so I am prepared for such scenarios. For example, when I worked as an analyst at my former employer, the senior manager required me to locate information on a new stock quickly. I anticipated it would be challenging to collect all the necessary information in such a short period. Nonetheless, I retrieved financial statistics from the company’s website and used them to inform my judgment.

4. How Do You Maintain Your Motivation At Your Job Despite The Obstacles You Face?

I understand that there are times when you lose enthusiasm as a result of losses you or your clients have experienced, but losses are an inevitable part of this industry. I was fortunate to have a mentor who taught me how to manage stress and keep a high level of enthusiasm. As noted previously, losses are a part of the game as victories. It is not acceptable; it is the market fee you pay in exchange for a return.

5. What Does Your Typical Day Look Like?

My typical day consists of rising at 7:30 a.m., keeping up on the market and updating all my models until 10 a.m., and entering the workplace. I would spend the day in the office developing strategies and executing trades advised by my models. I would perform European end-of-day deals at about 4 p.m. I would then head out to meet with friends, work out, or return home to track the US market. I would begin my US end-of-day trading at about 8:30 p.m. and conclude around 9:30 p.m. The day generally consisted of reviewing and updating spreadsheets and waiting for opportunities.

6. What Significant Obstacles Did You Face In Your Last Role? How Did You Handle Them?

At my previous job, dealing with clients was the greatest challenge because I was the only one who could recruit. In addition, the company was expanding, and the workload was enormous. I was responsible for managing everything till a candidate arrived while the hiring process was ongoing. Aside from that, I performed my duties without difficulty.

7. What Measures Do You Employ To Eliminate Errors From Your Work?

I am a firm believer in double-checking everything in my work. For example, at prior employment, one of my employees neglected to verify the underlying data utilized for analysis, and as a result, their client lost a substantial amount of money. Therefore, before submitting every transaction, I extensively evaluate the data that lead me to that conclusion. For example, I double-checked the supporting data and the calculations I utilized to formulate my strategy. In addition, I conduct a variety of analyses on each asset. If each investigation yields the same answer, I am more convinced that no underlying mistakes exist.

8. What Qualifies You For This Investment Management Role In Our Organization?

I am eager to apply for this position in investment management since I enjoy working with figures and evaluating information. In my prior positions, I honed my talents in financial analysis. I also like assisting others in achieving their financial objectives. I can assist clients in developing an investment strategy that will yield long-term returns. I have worked largely with small enterprises and startups for the past seven years. Small businesses frequently want assistance handling their finances to concentrate on business expansion. I appreciate assisting these businesses because I feel like I’m contributing to their success.

9. Describe A Time In Your Investment Management Career When You Failed And The Lesson You Learned.

When I first began working in investment management, I lacked a solid grasp of the market. As a result, I was impatient, and all I needed to do to increase my income was generate results. Then, one day, I met with a customer and presented her with a proposal that required research. I soon realized how much trouble I could make for that individual if I lacked a comprehensive understanding of market dynamics. So I immediately enlisted the aid of my supervisor, and we were able to prevent a significant setback for him.

10. Are You At Ease Working With Clients Who Have Diverse Investment Objectives?

I am happy to work with any client. I welcome the opportunity to assist any customer. I know that some investors are more comfortable taking calculated risks than others. My task is to assist every one of my clients in accomplishing the specific monetary objectives that they have set for themselves. I will be available to support them regardless of whether they want to put their money into the stock market or investments that are considered safer.

11. What Experience Do You Have In Developing Investment Plans With Other Professionals?

As an investment manager in the past, I worked with a team of financial experts to find the most profitable equities for our clients. Once every week, we would meet to review market trends and how we could use this information to benefit our clients. In one case, a few of our clients were interested in investing in renewable energy companies. So we decided to increase our holdings in green energy stocks to fulfill these requests.

12. What Is The Distinction Between Investment And Financial Management?

The focus of investment management is money. Financial guidance places emphasis on living. Security selection, asset allocation, expected returns, risk, and time horizons are fundamental to investment management. Money counseling is concerned with how you utilize all of your financial and other resources to live the life you desire. It requires decisions about using human capital (how long and how hard you wish to work), debt, savings plans, tax efficiency, disaster preparedness, asset ownership, insurance, estate planning, and philanthropy. Moreover, Investment management is concerned with analyzing portfolio performance by comparing returns to benchmarks, whereas financial advice focuses on delivering results regardless of performance.

13. How Do You Conduct Independent Research On New Investment Strategies?

I begin my study by comprehensively searching my preferred internet research platform for relevant publications and papers. Then, if I still can’t find what I’m looking for, I’ll contact coworkers who may have greater expertise in this area. Lastly, if I haven’t found anything relevant, I would contact the client directly to inquire about their aims and objectives to develop an investing strategy based on their specific requirements.

14. Which Is Usually More Expensive, The Cost Of Debt Or Equity?

The interest expense connected with borrowing debt can be deducted from taxable income, resulting in a tax shield for the borrower. As a result, the cost of equity is higher than the cost of debt. Furthermore, the cost of equity is often higher than that of debt because, in contrast to lenders, equity investors are not promised regular payments and are placed at the back of the line in the event of liquidation.

15. Before Initiating An Investing Strategy, What Are Some Of The Most Vital Questions You Ask A Prospective Client?

I always inquire about the client’s objectives, level of comfort with risk, and time frame for making investments. I am also interested in learning more about their current financial condition so that I can design a tailored strategy to meet their requirements. For instance, if they are responsible for the maintenance of other people or have other commitments, I may advise a different course of action than I would to someone solely responsible for their upkeep.

16. Explain The Sentence, “Without Investors, Businesses Cannot Grow.”

Investors are the backbone of any prosperous enterprise; operating cash is required for a business to continue expanding. The investors provide this capital. Some individuals have always questioned why firms go public, but the answer is straightforward: to raise funds. Those who purchase shares or stocks in these companies invest by supplying the necessary capital; in return, they receive dividends. Therefore, investors contribute to a company’s growth by giving funds the business would have otherwise had to borrow at a high-interest rate.

17. How Do You Build Good Relationships With Your Clients?

Relationships with clients are a top focus for me. I can perform my duties more effectively if I develop a close relationship with my clients. Therefore, I usually begin by scheduling a meeting with prospective customers to learn more about them. I learn about their financial background, objectives, risk tolerance, and, most crucially, their personal lives.

Most people base their financial decisions on their personal life; thus, I must understand what motivates them. After this initial discussion, I make it a priority to periodically update clients on the progress of their investments during subsequent meetings. I also prioritize communicating with clients for personal reasons, such as to wish them a good Christmas.

18. What Is The Distinction Between A “Trading Security” And An “Investment Available For Sale”?

In Trading Securities—these securities are typically acquired to generate short-term profits. Therefore, they are not held for a longer duration. While financial instruments are classified as Available-for-Sale, they are not actively managed to sell for short-term profits. Instead, firms own and value these securities at some time. Unlike trading stocks, AFS is neither actively purchased nor sold, nor are they held indefinitely to continue collecting investment returns. Instead, the management quickly sells these instruments on the market. 

19. In Your Opinion, When Should An Investor Conduct A Review Of Their Investment Portfolio?

I propose that an investment portfolio be reviewed at least once a year. I always review my investment portfolio twice a year to monitor the performance of each asset over time and make any necessary adjustments to guarantee that my clients are getting the highest potential returns on their investments. In addition, I make it a point to get together with customers once every six months to talk about their current financial status and provide updates on their portfolios.

20. How Is The Risk Level Of A Client’s Portfolio Determined? What Are Some Risk Management Measures You Use?

I employ a variety of methods to analyze the risk levels involved. I first consider their investment objectives and time horizons. Then, I examine their risk tolerance based on their responses to financial situation-related questions. Lastly, I examine their portfolio to verify it is suitably diversified. If these factors change, I will reevaluate the portfolio’s risk level.

21. What Is Your Procedure For Assessing And Modifying A Client’s Portfolio?

I begin by evaluating the portfolio goals and objectives of my client. I then evaluate all accessible financial data, including current holdings, performance history, and other pertinent information. After this initial evaluation, I will call my clients to discuss any portfolio modifications they may desire. If there are no big problems, I will immediately execute the adjustments. However, I will organize a follow-up meeting with my clients to review the adjustments further and answer their questions if there are concerns or issues.

22. How Would You Manage A Situation Where A Big Section Of Your Clientele Simultaneously Withdraws Their Funds?

In my experience, many specialists in investment management lose their clients’ funds when they fail to arrange for substantial withdrawals. To avoid this issue, I would establish an emergency fund from which I might draw in the event of an unexpected withdrawal. It will ensure that even if numerous clients withdraw simultaneously, I will have sufficient funds to cover their accounts.

23. What Is The Difference Between Stockholder And Stakeholder?

A stockholder or shareholder is the owner or holder of a corporation’s shares of stock. A stakeholder is any individual or group that has an interest in or is affected by a business. In other words, the investor is not the company’s sole stakeholder. Employees, families, suppliers, consumers, and the community are also stakeholders. Furthermore, some businesses have stakeholders rather than investors. The public university, for example, has no stockholders. Still, it does have several stakeholders, including students, their families, professors, administrators, employers, state taxpayers, the local community, the state community, society in general, custodians, and suppliers.

24. How Would You Attract New Investors To Our Organization?

I believe it is essential to acquire new clients by demonstrating our concern for their needs. Therefore, I would begin by describing what distinguishes us from other investing firms. I would inform them, for instance, that we have a team of highly skilled specialists that are committed to assisting them in achieving their financial objectives. I would also like to underline that we offer competitive interest rates on our investments to make people aware that we are not only looking out for ourselves.

25. Explain Disinvestment In Simple Terms With An Example.

Disinvestment in business refers to selling specific assets, such as a production facility, division, subsidiary, or product line. Sometimes, disinvestment is viewed as the antithesis of capital expenditures. Therefore, some refer to disinvestment by the terms divestiture or divest.

For instance, a manufacturer of electric generators may dispose of its consumer generator product lines and manufacturing facilities to acquire funds to expand its industrial generator product line. Another illustration is a corporation selling a profitable subsidiary that no longer meets its long-term objectives. The proceeds from this disinvestment are subsequently utilized to reduce the company’s debt and enhance its financial situation.

26. Which Investment Strategy Would You Recommend To Your Whole Client Base?

If I were to propose one investment approach to all of my clients, it would be index funds because of the low fees and high levels of diversification they provide. In addition, index funds make it possible for me to invest in a wide variety of businesses without requiring me to manage the portfolio of each account actively. As a result, it frees up my time to concentrate on other parts of client management while enabling me to continue offering helpful counsel.

27. In Layman’s Language, What Is Net Present Value?

The net present value of an investment is the sum of its cash inflows and cash outflows in the present. Future cash flows are discounted at a specified rate to derive the present value amounts. The defined rate could be the investor’s cost of capital or any other required minimum rate. Incorporating the net present value to evaluate investments has the advantages of:

  • Using all of the investment’s cash flows in the computation 
  • Take into account money’s time value by discounting future cash amounts to the present.

28. In Your Opinion, When Is The Right Time To Invest In A Mutual Fund?

A mutual fund is a corporation that combines the funds of numerous people and invests them in securities like stocks, bonds, and short-term loans. The mutual fund’s aggregate holdings are known as its portfolio. Investors purchase mutual fund shares. Each share indicates the investor’s proportional ownership of the fund and its revenue. Investors who want to diversify their portfolios but don’t want to spend a lot of time researching individual stocks might diversify their holdings effectively through mutual funds. When my customers have long-term goals, such as retirement or college savings, I typically propose that they invest in mutual funds. If my customers don’t have enough money to invest in other securities, mutual funds are another good option for them to consider.

29. Please Describe Your Ideal Financial Portfolio And The Reasons Why It Serves You.

My perfect portfolio would comprise equal balances of local stocks, overseas stocks, real estate, and bonds. I’ve selected these assets since they are all low-risk while still providing great rewards. I appreciate, for instance, that real estate has historically been a secure investment with consistent profits. I appreciate investing in rapidly expanding firms, making stocks a suitable option. I feel there is always money to be made elsewhere, so foreign equities are another great investment option for me.

30. Describe A Situation When You Had To Manage The Expectations Of A Client.

A client of mine was seeking an investing strategy that would yield an annual return of 45 percent. I explained to him that there are no investments that offer a guaranteed rate of return, but he persisted in obtaining one. I explained that if we invested in equities with a high-risk factor, we could potentially earn a 15% annual return. He opted to proceed with the risky stock transaction, and two years later, when the market plummeted, he phoned me angry. I talked to him about how investing in stocks is always a chance and that occasionally things don’t turn out as expected. He comprehended my recommendation and continued working with us.


Obtaining a position in investment management is difficult. However, it has unique bonuses and benefits that no other job provides. In addition, this professional path will place you in a position of growth you never anticipated. These are the leading 30 investment management interview questions and answers to help you prepare for your upcoming interview.

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