As disrupting trends from fintech to artificial intelligence are set to rapidly re-shape the future of investment over the next decade, the number of employees in many investment roles will fall, according to the global head of the CFA Institute’s Chartered Financial Analyst Program. However, more opportunities are likely to be created in other areas, such as private wealth management.

“When we talk about changing roles, there is a lot of impact of fintech. It is not the only trend that we see changing roles as we go forward, but focusing on fintech, it’s about thinking of these advancements as benefiting the end investor,” CFA Institute’s global head of the CFA Program, Lisa Plaxco, told Zawya in an interview in Abu Dhabi.

“We do see that the number of individuals who need to be providing a lot of these types of investment services will dwindle because they will become more efficient with technology,” she said. She added that the specific areas in finance that will be impacted the most are the ones where artificial intelligence is able to do basic tasks repeatedly, such as junior levels of research analysis.

On the other hand, there are particular fields where the numbers of investment professionals is expected to grow.
“When we give advice to our members on where the opportunities are, we see that globally private wealth management is an example where we see more opportunities occurring,” she added.

“We see retail financial advisors growing, because there is a huge section of the globe where wealth is coming up to the level where there are more individuals who need personal financial advice,” Plaxco said.

The CFA Institute has forecast an overall 1.5 percent compound growth rate in employment in the industry over the next decade, but this will be skewed towards emerging markets. Investment professionals roles are set to grow at a rate of 2.9 percent per year in India and 2.3 percent in China, compared to 1 percent in the United Kingdom and 0.9 percent in the United States. Research conducted for the institute by Mercer estimated the global number of ‘core investment professionals’ to be 1.05 million at the end of last year. This is set to rise to 1.2 million in 10 years.

“I do believe as well that there will be dramatic growth in Asia Pacific region in the number of providers… that is probably more so than in the legacy markets,” Plaxco said.

Learning new skills

Technological change will drive the need for investment professionals to acquire more ‘T-shape skills’, according to Plaxco.

“It’s not all about individuals who know how to use technology. It’s more about ‘T-shape’ skills… we believe that through lifelong learning, rather than just picking a mosaic of expertise across areas, the benefit would be to have one area for a period of your career that you can be a specialist in. That is what makes the ‘T-shape’, so you go deeper in one specific area,” she said.

From the employers’ perspectives, Plaxco said that although there are a lot of investment professionals with good technical skills, “what we continue to hear is that the weaknesses are on the human side or soft skills”.

“This isn’t just about communication, which is tremendously important, but even for analytical abilities. It is these types of skills that allow you to go to a higher level of your career,” she said, adding that analysis isn’t just about calculating the value of an individual stock, but about applying analysis to develop new investment ideas and being able to properly convey these to clients, while understanding what a clients’ own needs are.

“This entire suite of abilities of soft skills are the areas that are most prized now,” she added.

On how these trends will affect the CFA Program, Plaxco said: “We don’t seek to add the specialist training to the CFA Program because we are looking to have the very strong base.

She added that CFA Institute is not only an educational body, but also a membership organisation that challenges its professionals to pursue lifelong learning - whether in Artificial Intelligence, machine leaning, cryptocurrency or any other areas that are relevant to the industry.

“We’ve had elements of fintech in the program for a long time. What we introduced, though, last year for the first time, is that we collected it together in one targeted reading in level 2. This is a common approach for us, as we did the year before for ESG for example,” she said.

The institute recently announced that interest in pursuing the CFA Charter reached record heights, with the number of candidates registering for the different levels growing by 11 percent year-on-year. More than 250,000 candidates registered for an exam in 348 centers globally. For the Middle East and North Africa (MENA) region, over 6,000 candidates registered to sit exams in eight countries – a 5 percent year-on-year increase. Jordan recorded the highest growth rate in the number of candidates for the June 2019 exams, rising by 26 percent, followed by Saudi Arabia, increasing by 25 percent.

“In Saudi Arabia, there is a major 2030 plan, where the state would like to grow its skilled population and the government is investing heavily in knowledge…Having started an office last year in July, and having already a society on the ground, we know for a fact that from the top down, a major push for young Saudi talents to become chartered,” William Tohmé, regional head of MENA, CFA Institute, told Zawya during the same interview.

Many employers in Saudi Arabia are asking for the CFA designation as a minimum requirement before hiring, according to Tohmé, and he said that regulators offer waivers from some local exams for people taking the qualification.

“Wherever we look in Saudi we see a big push from regulators, government and the young talents towards the CFA designation,” he said.

The United Arab Emirates still provides the biggest pool of candidates in the region, though, which Tohmé said was logicial given the country’s two financial hubs in Dubai and Abu Dhabi.

In the UAE, more than 2,000 individuals registered for the June exam – an 11 percent increase on the previous year.

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(Reporting by Nada Al Rifai; Editing by Michael Fahy)
(nada.rifai@refinitiv.com)

© ZAWYA 2019