Moneywise investment gurus – yes, that’s it! Or not?
Antje: How many times have you heard from young people that they want to become investment analysts?
David: I have stopped counting. It seems crazy to me!
David: There are so many other rewarding careers in the investment industry.
Antje: Perhaps share with the readers what other career options there are in the investment management field!
David: Well, firstly it is important to understand the different areas of the investment value chain, and realise that all along this value chain different skills are required.
Antje: You mean from product design all the way to an after sales-service?
David: Exactly! Standardised investment products are often designed by investment specialists, who understand client needs, and have some information technology knowledge. This area is becoming more and more important, since it is very expensive to customize investment products to small individual clients, unless they are high net-worth individuals. The analysis and construction/management of portfolios as such is often completed by investment analysts and portfolio managers. Those individuals need a PGD in Investment Management or Honours in Portfolio Management, at least. Most study further to complete a Masters in Finance or MBA.
Antje: Just to add: those individuals often times also complete the CFA (Certified Financial Analyst) Exams, which links to a designation in the finance and investment field.
David: Indeed. Although many people are afraid of the CFA Exams, because the pass rates are incredibly low. It’s always a good idea to complete at least a postgraduate qualification to build some of the knowledge before attempting this set of exams.
Antje: Agree completely! Plus, I would like to add that this area of employment is exceptionally competitive and the working hours are extreme. Not many individuals can survive in this environment for the whole of their career.
David: Sure, it can get very lonely, and stressful. But the money is good and it is absolutely fascinating and thrilling! The investment management environment is always changing in line with new economic realities and changing geopolitical views as we’ve seen with the new wave of nationalism that has swept across the world in the last few years, trade wars and the like.
Antje: Won’t many of the trading roles be replaced by artificial intelligence, and trading algorithms? Including machine learning?
David: This may be the case is some roles where trading algo’s and or machine learning may be used to improve brokers’ execution of trades for instance. The problem with automated execution is that in many cases this may lead to unforeseen risks. Human execution will remain necessary for as long as there are large orders which need to slowly and systematically processed. Automated execution is far more likely for retail clients where there is significant liquidity and depth in the market.
Antje: Makes sense. Now, how about the sales side of the process? What are the job requirements there?
David: The sales team needs to be extremely knowledgeable about the investment products, to the point where they actually also end up completing a PGD in Investment Management or similar. In order to be able to recommend the correct product to the client, the sales person has to understand quite technical issues, so they need to be analytical and people minded at the same time.
Antje: And the middle and back-office functions? Like trading and settlement, accounting and reporting? Isn’t there a lot of detail orientation required? Apart from having good judgement about ethical questions, and doing the right thing?
David: You are correct these roles require significant detail orientation! Plus we have seen a more pronounced move towards many of these roles requiring more than simply a first degree or diploma. A PGD in Investment Management will make you much more marketable when considering roles such as these!
Antje: Plus, we must remember that the bulk of the jobs in the investment sector revolve around these operational and back office roles.
David: I am not sure for how long … Experts in the field of future analysis of trends have been overzealous in certain predictions in the past. However, that being said, over time automation of many of the tasks will probably become a greater factor, and as such it will be important to differentiate yourself, by becoming a specialist in the investment field and adding information technology as well as other soft skills to the pot. A relevant BCOM in Investment Management for those that have not studied followed by a PGD with relevant electives could be a worthwhile investment to help you differentiate yourself from the rest of the pack!
29 May 2019