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Private wealth seen as significant area of jobs growth
A new global report has found that advancing technologies, the explosion of ‘big data’ and greater regulation are changing the shape of financial advisers in the investment industry, while private wealth management is expected to be an area for significant growth in jobs as populations age.
The CFA Institute report, Future of Work in Investment Management: The Future of Skills and Learning, found that 75 per cent of Australian CFA Institute members believe the biggest disruptive factor in the workplace in coming years will be new analytical methods, including artificial intelligence (AI) and machine learning. That is followed by changing regulatory requirements (64 per cent) while another 61 per cent of respondents believe that expanded data sets will be a source of disruption, the same percentage of candidates that nominated sustainability.
Among CFA members worldwide, regulatory changes are of highest concern among risk analysts and financial advisers. Not surprisingly, fee pressures are expected to be an important disruptor according to financial advisers. The report draws on CFA Institute survey data to identify the skills and learning required for building talent and careers in the investment industry.
Wealth manager numbers to grow
The CFA Institute report found that private wealth managers and financial advisers appear to have the most varied career pathways among CFA charterholders: 12 per cent had been equity analysts, 12 per cent had been portfolio managers, 9 per cent had been in sales, and 9 per cent had been investment consultants.
“Given the growth of the wealth management business in markets with ageing populations and a shift away from defined benefit pensions, private wealth is an area for growth with many available roles,” the report found.
“CFA Institute has conducted internal analysis that indicates the number of private wealth professionals servicing high net-worth clients (assets greater than US$1 million) globally is forecast to grow by more than 30 per cent over the next 10 years.”
Data and soft skills being sought by investment experts
The report analysed 16 trending skill areas to determine which skills investment professionals are currently pursuing, or plan to pursue, and found soft skills are most in demand: 84 per cent of Australian respondents said they want to acquire soft skills, followed by 78 per cent who are seeking skills in sustainability or Environmental, Social, and Governance (ESG) (78 per cent) while another popular area was leadership skills in a hybrid workplace (78 per cent).
Lisa Carroll, CEO of CFA Societies Australia, said that soft skills, unlike technical skills, transcend roles. In an industry known for technical and quantitative prowess, acquiring these skills is very important for professional development and career growth. “Some of the skills that have become more important in the new world of work include being effective at influencing, persuading, and negotiating with stakeholders. Also very important is direct communication and collaboration, especially when a significant amount of time is needed to solve a problem or to brainstorm ideas,” Carroll said.
“Technical skills are most important at the start of one’s career, with soft skills, leadership skills, and T-shaped skills (a combination of deep knowledge in a single domain and wider knowledge in other fields and the ability to connect them) growing in importance over time.”
The educational background of those pursuing an investment career has become less focused on finance, with growth over time in the popularity of STEM (science, technology, engineering, and mathematics) studies. Across all global CFA charterholders, over the last 30 years, the number of Level I CFA Program candidates with a finance degree or course of study has fallen to 38 per cent from 43 per cent.
“As the industry becomes more complex, investment firms are seeking more diverse educational backgrounds and a wider knowledge base from which investment expertise can be developed. You can see this in the survey results with the rising importance of data analysis skills in the age of ‘big data’, which will inevitably draw professionals with STEM backgrounds,” Carroll said.
Once working within the investment industry, continuous professional development is essential for professionals to stay fluent beyond their foundational studies. “For graduates and early career professionals aspiring to roles within the investment profession, the CFA Program offers a comprehensive curriculum for demonstrating professional competence, and a platform from which candidates can deepen their expertise and drive forward their careers,” Carroll said.
