Fintech has not sounded the “death knell” for high-quality investment advisers and analysts, according to CFA Institute head of Asia Pacific, Nick Pollard.
Pollard, in NZ last week for the local CFA Society AGM, said well-qualified humans were still in demand despite the rise of automated investment and advice systems.
“We surveyed our members recently on their attitude to fintech and overwhelmingly in the Asia-Pacific region they saw it as an opportunity to provide better advice to a wider audience,” he said. “It’s democratising advice – delivering at least some kind of advice to more people.”
Likewise, the growing reach of technology in the investment management arena – where the CFA charter-holder qualification is more predominant than in retail financial advice – has not diminished demand for analysts and portfolio managers, Pollard said.
“Technology can create a ‘black box’ element that needs to be interpreted and explained by people,” he said. “And that may require [CFA charter-holders] to develop further skills around communication and relationships.”
In fact, Pollard said the CFA curriculum has been amended to include competencies around these ‘soft’ skills in addition to the traditional high-level number-crunching the qualification demands.
Over the last couple of years the CFA program has been adapted to accommodate both fintech and the burgeoning field of environmental, social and governance (ESG) investing, he said.
“Ethics has always been a massive part of the CFA curriculum,” Pollard said, with ESG adding further depth to the field of study.
“The rest of the world sometimes views the Asia-Pacific region as the ‘wild east’ but we see a huge interest in ESG in, for example, China and India, where it is now considered best practice across the investment industry,” he said.
Asia-Pacific was also the fastest-growing region for the CFA, Pollard said, led by China where annual growth-rate in charter-holders was in the order of 30 per cent.
New Zealand, too, was experiencing rapid growth in CFA membership – up about 15 per cent last year.
“There are about 350 CFA charter-holders in NZ but in the last fiscal year we had 700 candidates going through the program,” he said.
Pollard said the high quality of NZ CFAs could see the country emerge as a regional leader, despite the relatively small size of the population.
“New Zealand’s positive regulatory environment, education system, international reputation for low corruption and adoption of ESG principles means CFAs from this country are in high demand,” he said. “New Zealand has everything going for it in transforming into a global, IP-based financial hub.”
While CFAs tend to be concentrated on the investment side of the ledger – either as institutionally-based analysts or in funds management – Pollard said there was increasing demand for the qualification from retail financial advisers.
“Since the global financial crisis [GFC] people have been more questioning of their advisers,” he said. Post GFC, increasing financial literacy levels and personal experience of poor advice has seen retail investors demand greater, demonstrable competence from advisers, according to Pollard, with the CFA designation rising in prominence.
However, he said the CFA would not over-ride any NZ-specific or other industry advice education marks.
“We always expect there will be local advice qualifications – the CFA complements that,” Pollard said. “The CFA is not about how to be a great adviser in NZ, but how to be a great adviser.”