The finance industry and educational providers need tight relationships

Industry engaged education is necessary for producing investment leaders of the future, Dan Daugaard writes.

A new CFA Institute study predicts large scale trends will have a significant impact on the investment industry. The landscape is expected to change dramatically and new skill sets will be necessary for investment professionals to be successful in this new environment. 

This is likely to produce fresh challenges for organisations providing education to the investment industry. They will need to adapt and construct educational services relevant for the industry of tomorrow. Some are evidently already moving towards a more engaged role. 

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The ‘Future State of the Investment Profession’ study provides a comprehensive analysis of the potential future scenarios for the investment industry. The study describes the mega trends likely to affect the industry. 

These are “large scale changes in circumstances that are omnipresent in all facets of our world” and include ageing demographics, tech-empowered individuals and organisations, economic imbalances, government footprint, and resource management.

Based on the impact of these mega trends, the study develops scenarios (or narratives) about the future. The central themes from these storylines are already starting to take place:

  • Fintech disruption is beginning to occur right across the finance industry including insurance (e.g. Trov), property investing (e.g. BrickX), wealth management (Stockspot and OwnersAdvisory) and lending (SocietyOne);
  • There is significant geopolitical instability throughout the globe (e.g. Brexit, Trump, North Korea) and being incorporated into investment decision making (e.g. Nikko Asset Management);
  • Economists are almost unanimously predicting a prolonged period of lower returns; and
  • Environment, social, and governance (ESG) policy integration is actively pursued by investment managers (e.g. Repoint Investment Management), asset consultants (e.g. JANA) and asset owners (e.g. HESTA).

The views in the CFA Institute’s study are based on a large survey carried out by Institutional Investor across 1,145 investment management professionals as well as subsequent interviews with 19 investment management executives to refine the insights from the survey results. 

The findings therefore reflect the key concerns of investment leaders about their industry and the ongoing sustainability of their businesses. In particular the survey participants provided details on what they thought the most important skills for investment leaders would be in the future. 

These details provide a practical list of the “new skills for new circumstances” required by chief investment officers, portfolio managers, and chief executives of asset managers to retool for the future. The new skills can be interpreted as the new educational curriculum for any individual aiming to be successful and influential in the future industry. 

The most important skills identified were: the ability to articulate a compelling vision for the institution; relationship building skills; specialised financial analysis skills; and the ability to instil a culture of ethical decision-making. The last two skills also represented the most significant areas for their business’ future training focus. 


The range of skills required are highly diverse in nature and reflect varied education disciplines. This diversity is illustrated by comparing the two skills identified as the most difficult to find in the labour market: 

  • The ability to communicate the institution’s vision; and 
  • Sophisticated IT knowledge. 

The former is a high level strategic management skill and, in contrast, the latter is a deep and specialised technical skill. The knowledge types are similarly varied across the full set of skills required for the future. 

This aspect therefore raises significant questions. How will the future leaders achieve the required skills they need? Will educational providers have the breadth and flexibility to provide the wide range of skills they need? The challenge for educational organisations implicitly posed by this study is to re-invent themselves so that they can equip investment professionals with the appropriate mix of strategic leadership development, people and societal knowledge, technical competencies, and capacity to apply their knowledge to real world problems. 

It is likely that the most successful educational organisations will be those with the closest connections to industry and therefore the deepest understanding of the changes occurring in industry. 

Education organisations are already busy developing strategies to achieve this increased industry engagement.  Examples include: industry advisory boards being structured to inform curriculum; universities entering strategic partnerships with companies and industry bodies and at the micro level individual subjects are now being offered which provide students the opportunity to engage directly with industry leaders and focus their research on projects directly relevant to industry problems. 

A tighter relationship between industry and educational organisations can also deliver ancillary benefits for both parties. In particular, a potential two-way flow of ideas and stimulus could eventuate.

The skills achieved by the industry professionals would be more applied and directly relevant for their responsibilities. The research outputs of educational institutions are likely to be more relevant and therefore have greater influence on the approaches applied in industry.

This closer relationship could also lead to an increased awareness by education providers of subsequent transformations occurring in the industry. Which could ultimately lead to more flexible and rapid adaptations by educators to meet the ongoing dynamic needs of industry.

Dan Daugaard is a senior lecturer and the director of CFA Institute Partnership Program at Macquarie University’s Applied Finance Centre.

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