Credit analyst vs portfolio manager: Roles explained in depth

The finance industry has several prestigious job profiles that can be very appealing to young students. If you are a finance aspirant still charting the course of your career, it is also helpful to get sound advice to push you in the right direction.

This post will focus on two such professions — Credit analyst vs portfolio manager. Both designations have a lot of scope in their respective fields. They are powerhouse positions that can lead to bigger and better things in your future. Both jobs can be demanding yet fulfilling. Stressful, yet lucrative. If you’re keen to learn more, stay here as we dive into comparing credit analysts vs portfolio managers.

Credit analyst vs portfolio manager — Job description

A credit analyst is a finance professional who analyses and reviews the financial capacity of a potential loan applicant. If you are an employee of a bank or money-lending company, it is your responsibility to research the background, look into financial statements and analyse various relevant data. Your findings will reveal the exact nature of the client’s creditworthiness, and lead to the loan being granted or denied.

Credit analysts serve as guardians for the creditor company. They safeguard their interests and funds by approving only verified candidates with proven means to repay the loan. The job requires a lot of attention to detail and analytical thinking. Analysts are savvy professionals who understand the finance industry and use their expertise to mitigate risks.

When reviewing credit analysts vs portfolio managers, it is essential to understand the role they play in finance. A portfolio manager is an investment advisor who helps clients manage their portfolios and achieve their financial goals. The professional is deeply knowledgeable about the finance markets, investment opportunities and industry developments.

They help individuals and companies to build capital through strategic investment planning. They also help clients to invest for specific financial objectives such as an educational fund or retirement plan. The average portfolio manager uses advanced skills such as decision-making, analytical thinking, strong communication and market expertise.

Credit analyst vs portfolio manager — Roles and responsibilities

The economy runs on credit. People need loans for various purposes, whether to buy a house, expand their business, or pay for education. The credit analyst is the key figure who ensures the creditor and borrower form a mutually beneficial agreement. Their main priority is to verify whether the loaner has the means to make the payments or if they will default.

• Assess the creditworthiness of every client to ensure they are in good fiscal health.
• Analyse relevant documents such as financial statements, cash flow statements, credit reports, credit history, etc.
• Perform due diligence to ensure all data is accurate and not tampered with.
• Use credit analysis models and ratios to calculate parameters, such as risk factors and financial solvency.
• Keep track of loan payments, adjust terms and modify rates as needed.
• Ensure all processes follow company regulations and procedures.
• Present research to senior management and advise if the applications should be accepted or rejected.

Portfolio managers are savvy decision-making professionals who can pick the right investment opportunities from a sea of choices. They create customised portfolios that cater specifically to the individual’s needs or a company’s requirements. Here are some of their day-to-day duties:

• Monitor and manage a client’s portfolio to optimise profits and reduce risks.
• Create strategic plans for every client to ensure they get the maximum returns.
• Diversify portfolios to minimise risks and maintain healthy returns.
• Research financial markets, share prices, economic forecasts and potential investments.
• Make projections about the financial markets based on researched data.

Credit Analyst vs Portfolio Manager: Educational requirements

Portfolio managers are highly trained and skilled professionals who understand the nuances of financial markets. They rely on their industry knowledge, business acumen and sharp analytical thinking to make the right choices for their client. Most portfolio managers have a strong educational background in one or more of the following:

• Bachelor’s degree in economics/commerce/finance
• MBA (Finance/Investment Banking)
• Chartered Financial Analyst
• Chartered Financial Planner
• SEBI Portfolio Management certification

Qualifications play a role in how you navigate your career. When you analyse the role of credit analyst vs portfolio manager, there is an overlap between the two. Credit analysts require training in specific areas of finance and must have a deep understanding of credit-based regulations, industry terms and financial analysis. You need one or more of the following:

• Bachelor’s in commerce/accounting/finance
• Master’s degree
• MBA (finance)
• Chartered Accountant
• Chartered Financial Analyst
• Financial Risk Manager

Credit analyst vs portfolio manager: Pros and cons

Credit analysts have a lot of responsibilities. They serve the country’s economy by facilitating growth and development by allocating funds that fuel businesses and uplift individuals. But is this the right job for you? Check out the pros and cons below to fully understand this career better.

Pros Of Becoming A Credit Analyst:

• It is a great starting point that propels you to other bigger, more lucrative positions.
• Credit analysts have a good work-life balance as they mostly work 40-hour weeks.
• Many credit jobs come with a good salary, bonuses, and perks.
• It is a challenging and stimulating career that will give you a lot of job satisfaction.
• You develop several industry-relevant skills to help you crossover to other finance fields.
• There is considerable job security for credit analysts.

Cons Of Becoming A Credit Analyst:

• Entry-level positions earn slightly less than peers in other finance fields.
• There is repetitive paperwork involved, such as filling out forms and verifying documents.
• It is a sedentary job; you will be at a desk in front of the computer for a long time.
• It may not be the right choice for introverts as you deal with several clients.

Portfolio managers are experienced finance experts who understand how the markets work, how economies thrive, and how to build wealth through careful strategic planning. It’s an attractive career option, but is it right for you? This field comes with its fair share of pros and cons.

Pros Of Becoming A Portfolio Manager:

• Portfolio management is known to be a highly lucrative profession.
• There is the potential to make even higher figures as you rise in the company.
• Portfolio management can be exciting to work in if you have the passion and drive for it.

Cons Of Becoming A Portfolio Manager:

• Work-life balance may not be great as you may have to work longer hours on occasion.
• It is known to be a stressful job, so you should be able to deal with the pressure.
• It is a highly competitive field, so you must continuously work towards proving your mettle.

Credit analyst vs portfolio manager: Comparison Table

Comparison of Career Growth In Both The Fields

Let’s map out the career ladders for both roles because, let’s face it, who doesn’t want to know where these jobs will take you?

• Credit Analyst Career Path

  • Entry-Level: Junior Credit Analyst
  • Mid-Level: Credit Analyst → Senior Credit Analyst
  • Advanced-Level: Credit Manager → Vice President (Credit) → Chief Financial Officer (CFO)

• Portfolio Manager Career Path

  • Entry-Level: Investment Analyst
  • Mid-Level: Assistant Portfolio Manager → Portfolio Manager
  • Advanced-Level: Head of Portfolio Management → Investment Director → Managing Director

Demand for These Roles

• The demand for credit analysts is growing at 8% annually due to increased lending and credit penetration in India (Source: PwC Report, 2024).
• Portfolio managers see high demand in India’s burgeoning wealth management sector, expected to grow at a CAGR of 12.5% by 2026 (Source: Statista).

Flowchart: Career Progression

Future Trends in Finance For These Roles

The finance industry is constantly evolving, and so are the roles within it. Let’s look at what the future holds for credit analysts and portfolio managers.

Impact of AI and Fintech

• For Credit Analysts:
  • AI-based credit scoring models like CIBIL 2.0 are reducing manual evaluations.
  • Fintech companies like CredAvenue are integrating automated underwriting systems.
• For Portfolio Managers:
  • Robo-advisory platforms like Upstox and Groww are reshaping investment strategies.
  • AI algorithms are predicting market trends faster than ever.

Emerging Opportunities

• Credit Analysts:
  • Specialization in green financing and ESG credit ratings.
  • Roles in blockchain-backed lending platforms.
• Portfolio Managers:
  • Managing digital assets like cryptocurrencies.
  • Expertise in sustainable investments and climate funds.

Skills in Demand For Credit Analysts Vs Portfolio Manager

Both roles demand a unique blend of technical expertise and interpersonal skills. Here’s a breakdown:

How to Choose the Best Career for Yourself?

Making career decisions isn’t like picking your favorite Netflix series. Here’s how you can choose between being a credit analyst or portfolio manager:

1. Evaluate Your Skills:
   • Are you detail-oriented and love analyzing numbers? → Credit Analyst.
   • Do you enjoy strategic planning and market research? → Portfolio Manager.
2. Check Your Long-Term Goals:
   • Want stability and work-life balance? → Credit Analyst.
   • Thrive in high-pressure environments with high rewards? → Portfolio Manager.
3. Follow the Money:
   • Credit analysts earn ₹9-12 LPA on average, while portfolio managers can start at ₹12 LPA and go up to ₹40 LPA in senior roles.
4. Test the Waters:
   • Start in an entry-level finance role and explore both fields before committing.

Courses & Qualifications That Can Help You

Courses For Credit Analysts:

• • Diploma in Credit Risk Management.
  • Certification in Financial Analysis and Modeling.

Courses For Portfolio Managers

• • Post Graduate Program in Wealth Management.
  • Advanced Investment Planning Certification.

Institutions Offering These Courses in India

• Proschool: Offers comprehensive CFA and financial modeling training.
• NSE Academy: Known for investment management certifications.
• ICAI: Provides in-depth training for Chartered Accountancy.

About Proschool’s CFA course

A career in finance is a serious business. It helps to have the proper qualifications and skills to get your foot in the door. The CFA course is one of the world’s best certifications that gives you a leg up in your chosen industry. Proschool has an incredible faculty of experienced teachers who understand the world of finance. They help students navigate the rigorous CFA syllabus through active learning methods and real-world training.

You learn important knowledge and concepts in both fields—credit analyst vs portfolio manager, giving you a fantastic perspective for your career. Proschool also offers additional resources and excellent facilities that help you achieve your career goals as soon as possible.

Why Proschool is perfect for you:

• 16+ coaching centres are available in cities across India.
• You can also register for online classes.
• Students receive customised study plans, revision classes, and doubt-clearing sessions.
• The professors are approachable and engaging.
• You can access the exclusive placement portal with job openings in all areas of the finance industry.
• Students are also given recruitment training to perform better at interviews and resume writing.

Conclusion

Credit analyst vs portfolio manager? Which one do you want to be? You don’t have to choose. You can be both. First, start your career as a credit analyst, and within a few years, you can move up to portfolio manager. The CFA course is perfect as it will give you a broad range of knowledge concerning both professions. Once certified, you can begin working your way up the corporate ladder.

FAQs

Is a portfolio manager a higher position than a credit analyst?

Yes. A portfolio manager earns this position after six to eight years as a financial analyst. A junior credit analyst can become a credit analyst after one or two years.

Which job is more stressful — credit analyst vs portfolio manager?

While both professions have challenges, a credit analyst may have a better work-life balance than a portfolio manager. However, if you are well-trained and enjoy your job, it is easy to keep the stress at bay in both careers.

How can the CFA course help me decide on my finance career?

The CFA program offers an excellent education in various important areas of finance. You can work in several job profiles such as credit analyst, portfolio manager, financial analyst, trader, financial planner, and many more. When you do the course, you get a clearer idea about the different job profiles and also understand where your potential lies. You’ll be able to make a good decision on the direction of your finance career.

Can a credit analyst become a portfolio manager?

A competent credit analyst with a proven track record and enhanced expertise can become a portfolio manager.

Credit analyst vs portfolio manager — who has the better work-life balance?

Credit analysts tend to have a slightly better work-life balance than portfolio managers. However, it is possible to have long days when you work in credit and have to meet deadlines. Portfolio managers have more stressful work environments and longer working hours.

Is a portfolio manager above a credit analyst?

Yes, it takes 6–7 years to become a portfolio manager. An experienced credit analyst can move into portfolio management.

What is the highest salary for a portfolio manager?

The salary for a portfolio manager can go as high as ₹40 lakhs. Portfolio managers promoted to senior positions will see their income shoot up even more.