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Paul Smith: “Future trends of the Investment Profession”

23.11.2017Comments are closed.

On the 7th of November, the president and Chief Executive Officer of the CFA Institute – Paul Smith held a lecture at the Faculty of Economics about the state of the investment management profession and the goals of the institute he is leading. Matija Filipič, a member of the Slovenian CFA society, started the lecture with a short introduction about the CFA Institute, which has more than 130 000 members worldwide, 149 member societies and is focused on ‘’promoting the highest standards of ethics, education and professional excellence for the ultimate benefit of society.

After taking the floor, Mr. Smith continued his lecture with further information about the CFA Institute, and briefly set up topics of the meeting, such as the prevailing distrust of the industry and various changes he believes will be happening. He also emphasized that the institute focuses on the investment management industry specifically, which concerns various aspects such as pension funds, private wealth management, mutual funds and so on.

“The curriculum of the CFA exams doesn’t try to point you in any direction, (…); it tries to expose you to all aspects so when you get a job in a certain profession you can make your own way.”

The CFA Institute is famous for its exam separated into three levels. After passing all of them and gaining 4 years of relevant work experience in the investment world, you get the title of a Chartered Financial Analyst (CFA). The difficulty of the exam is high. On average students who then pass the exam spend roughly 300 hours of work at each level, as the curriculum is very broad. When explaining the descriptiveness of the material, Mr. Smith said: “It doesn’t try to point you in any direction, (…); it tries to expose you to all aspects, so when you get a job in a certain profession you can make your own way.” Nevertheless, despite its broadness, the focus is made entirely on the investment management world.

“We feel that as a professional body we have a big role to play in reconnecting finance with its purpose.”

When touching upon challenges that the profession faces, Paul Smith mentioned an enormous distrust of the public towards the finance industry in general, while on the other hand the whole industry of the investment management is founded on trust and integrity. He underlined the importance of the contribution of professionals.  As a professional in the field, you are required to constantly update your knowledge and “keep your wits about”, devote yourself to learning throughout the entirety of your career and to help establish the profession in a public’s mindset differently from the current distrusted view.

Changes in the profession

As for the changes in the profession, the digitalization in general, such as the usage of big data and data analysis has not disrupted the industry yet, however, it is beginning to happen. From a skillful perspective, Paul Smith predicts that one extreme will be about many more technically skillful people joining the industry, while on the other hand, there will be more soft skills required. He noticed that companies have started hiring people with not just general business degrees but also from other areas such as liberal arts, as they require more relationship skills and portfolio management skills.  Furthermore, companies are being encouraged to think more carefully about the people who are brought into the profession. There has been a certain similarity between the employees in the area regarding skillsets, schools and values, while the industry is searching for more innovation and cognitive diversity among its professionals. Furthermore, the industry has a problem with keeping female workers in the profession for various reasons; so many asset management businesses have set as a goal to increase the share of women in the industry.

Mirna Lazar, EFnews

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