Financial advisers remain the most unfazed of all investment industry professionals about potential job disruption after fending off the robo-challenge, a recent CFA Institute survey reveals.
According to the CFA global survey of over 11,000 investment professionals conducted in 2021, ‘private wealth managers’ (and advisers generally) reported the largest easing in concerns about their future roles compared to the previous 2019 study.
“The threat of robo-advice as a significant disruptor has decreased in recent years because the robo-advice model has worked best in serving the mass affluent segment that traditional private wealth managers typically cannot cover profitably,” the CFA report says. “Consequently, robo-advisers do not compete in the same target market segment as traditional private wealth managers.”
Furthermore, advisers and others in client-facing roles have already adapted to significant change following a hyper-evolution phase sparked by the COVID-19 pandemic.
“Those who have adopted technology effectively should be well positioned for the future and may therefore anticipate relatively less change over the specified time horizon, although some high-trust situations may require reverting to more traditional approaches,” the research paper says.
But chief investment officers reported the biggest sentiment swing over the two-year period with rising concerns about looming job disruption. CEOs, traders and chief financial officers also saw an uptick in role-change expectations compared to the 2019 findings – albeit at much lower intensity than the CIO cohort.
Regardless of the shifting moods of the various industry players during the two years between the CFA surveys, in absolute terms the fintech/IT professionals are more likely by far to expect job disruption over the next five to 10 years.
More than 70 per cent of fintech/IT specialists expect their roles to change over the five to 10 years ahead including 9 per cent who said their job would probably disappear.
“Traders and those in sales are the other roles where a majority expect significant change,” the CFA report says. “Accountants and auditors, chief investment officers, and risk analysts are also above average in terms of anticipating change.”
However, all sectors of the investment business are primed for some kind of disruption over the medium term with technology, investment trends, fee-squeeze and regulation all cited as factors.
“The respondents most likely to say that new analytical methods, including AI and machine learning, will be disruptors work in quantitative analyst or performance analyst roles. Those most likely to view sustainability as a disruptor are product specialists, investment consultants, managers of managers, investment strategists, and credit analysts,” the paper says.
“Regulatory changes are of highest concern among risk analysts and financial advisers. Fee pressures are an important disruptor according to financial advisers, managers of managers, those in sales, and portfolio managers.”
Both investment businesses and those who work in them will have to adapt to meet the many organisational, social and technical challenges ahead.
“As the industry undergoes transformational change, having the right skills and a culture of learning will be essential for success,” the report says.
In addition to the 11,000-plus professionals surveyed, the CFA study tapped into qualitative data supplied by 41 investment business leaders and more than 100 other industry executives.