It is a logical truism that advancing our skills advances our careers. The challenge, however, is knowing where to focus our personal development so that it will have the maximum benefit. The “Future of Work in Investment Management: Skills and Learning” research report from CFA Institute identifies current gaps in the supply and demand of skills in the investment industry, highlights the sources of disruption in the sector, and examines the intersection between them. As such, it provides a roadmap for how best to move our careers forward.
Areas for Development
The report breaks investment management down into four skill categories:
- Technical skills are the sector’s foundational competencies, such as financial analysis, asset valuation, portfolio management, and so on.
- Soft skills are more nuanced and qualitative. Negotiations and relationship management as well as effective communication are some prime examples.
- Leadership skills focus on ethical culture, governance, and how to articulate an organizational mission and vision.
- T-shaped skills form the nexus between deep technical knowledge in one domain, a broad understanding of other disciplines, and the ability to synthesize the two.
Just how crucial these skill categories are depends on where we are in our careers. Technical skills have more value early on: They are often required knowledge for entry into the industry and to perform our jobs on a day-to-day basis. As we climb the ranks, however, soft skills and leadership skills grow more vital as relationship management and influence become integral to fulfilling our responsibilities. T-shaped skills also increase in importance as we ascend the professional ladder and are called upon to demonstrate our situational fluency and grasp of organizational contexts.
Importance of Skills in Career Progression
Of course, new products and technologies combined with regulatory uncertainty have added to the complexity of the investment management industry’s already complex ecosystem. So while there is no substitute for technical, soft, or leadership skills, T-shaped skills have become especially critical. The earlier “Investment Professional of the Future” report from CFA Institute found that such skills were the most important type to develop. A recent poll of more than 8,000 LinkedIn users backed this up: T-shaped skills were rated more valuable than technical, sustainability/ESG, and soft skills. The question is why.
Rank the importance of the following skill types for successful investment professionals in the next 5 to 10 years (% ranked first)
Disruption as a Driver of Change
Nearly 4 of 10 respondents to the Skills and Learning survey believe their job role will either substantially change or cease to exist in the next 5 to 10 years. Disruption, according to this cohort, is inevitable.
So, where is disruption coming from? Respondents to the Skills and Learning survey expect that new analytical methods, including artificial intelligence (AI) and machine learning (ML), and an increased emphasis on sustainability will be the two main sources of job role disruption.
Which of these industry disruptors do you expect will significantly contribute to the change? (select all that apply)
T-shaped mindsets help us hone our adaptability and adjust to new trends and technologies. Indeed, the continuous development of such skills may be the most effective way to prepare for the uncertain future that lies ahead. Industry disruptors often emerge from the gaps in key skill development. Recent industry trends bear this out. AI/ML and sustainability are the two main sources of disruption. They are also areas where those demonstrating proficiency are vastly outnumbered by those pursuing or interested in pursuing proficiency. That is, the demand for talent in these areas vastly outstrips the supply, which is why current and aspiring investment professionals may want to focus on them.
Supply and Demand of Key Skills
As new technologies and investment products and strategies come on line, broad knowledge across multiple disciplines will be critical. Today’s innovations will become tomorrow’s conventions as specialist skills are integrated into the generalist toolkit. How quickly we can adjust to such transitions is a factor of skill adjacency: The more aligned the emerging skill is to the generalist skillset, the faster it can be integrated.
AI/ML and sustainability demonstrate this relationship. Sustainability is an extension rather than a rejection of traditional investment approaches: It seeks to build a more holistic view of investment risks and opportunities. That means that the required technical skills overlap with or are adjacent to those already widely applied in investment management. So, integrating sustainability approaches into the generalist skillset should not be too tall an order.
AI and ML, however, pose a much larger challenge. They require fundamentally different skillsets — data science, coding, etc. — than most investment management generalists have at their disposal. Thus, the sustainability supply and demand skill gap will likely close at a much faster rate than the gap in AI and ML talent. And that’s something to keep in mind when considering how to position your career for the future.
Upskilling for the Future
Investment management is both ripe with opportunities and ripe for disruption. Amid such a competitive and changeable landscape, diversifying our skillset is essential. An added focus on developing more T-shaped skills can help us prepare for and adapt to the industry’s inevitable transformation. We need to identify the gaps between the supply of talent and the demand for training to position ourselves for career advancement.
Right now, adjacent skills — like sustainability — may be the low-hanging fruit. We should think about what skills are in demand and adjacent to our existing knowledge base. Those might be good targets to focus on. They can be developed quickly without straying too far into unfamiliar ground.
Other skills that are less analogous to those of traditional finance may be harder to develop. But if they have anything like the potential of AI and ML, they also may pay more of a dividend over the long run. Given their complexity, such skills are likely to remain the domain of specialists for the foreseeable future.
But whatever subject or skill category we choose to focus on, we need to commit ourselves to lifelong learning, to learning something new every day. Investment management is too dynamic an industry, the pace of change too rapid, to do otherwise. No practitioner can afford to let their knowledge or skills remain static for long.
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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.
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