The Future of Work in the Investment Industry

The CFA Institute has released the fourth report in its “Future of Work” series, exploring the context, culture and content of work in the investment industry.

The report, “The Future of Work in Investment Management: The Future of Skills and Learning,” posits that the fundamental purpose of finance is to contribute to society by enabling wealth creation and increasing societal well-being. It also highlights current gaps between the supply and demand for skills in the investment industry, examines learning trends and proposes changes to investment teams to better leverage diverse talent and the combined power of discrete but complementary skills.

The “Future of Work” series uses quantitative responses from a combined group of more than 11,000 investment professionals globally across three surveys, 41 investment organizations representing more than 230,000 employees and more than 100 investment and human resources professionals in the investment management industry.

The Next Generation

As competition for talent has grown across several industries, the report begins by analyzing the investment professional pipeline, including how students view finance as a course of study and the attractiveness of finance as a career.

Overall, finance remains an attractive field, as 80% of students studying accounting or finance reported believing their career prospects were as good as or better than those of their parents’ generation, the report states. Among Level I CFA program candidates, the most prevalent undergraduate studies are finance (38%), economics (15%) and business (15%), while STEM subjects (science, technology, engineering and mathematics) have risen to 14%.

The continued interest in finance bodes well for the future of the industry, though investment professionals have varied educational backgrounds, and many organizations are beginning to hire those who leave school before completing their degree, the report notes.

The pandemic has caused some notable disruptions for those in the pipeline, including a change in candidate demographics, the report states. The loss of a year of CFA exam availability between 2020 and 2021 meant the average age of candidates upon entry to the CFA program, which had been trending lower, increased in 2022.

Additionally, the gender gap among candidates widened in 2021, reversing a multiyear trend and highlighting how women have disproportionally felt the effects of the pandemic, the report states. This has led to a candidate ratio of 60% men and 40% women.

The Future of Investment Roles

With 37% of CFA Institute members who believe their role will be substantially different in five to 10 years, the report examines the type of roles investment professionals have, as well as how much the roles are expected to change and why.

Fintech and information technology (63%) were the roles most expected to change in the next 10 years, with 9% who reported expecting that their role will not exist in the same way in the future, the report states. This was followed by trader (56%), sales (48%), accountant/auditor (47%) and chief investment officer (45%).

Most expect some roles will be disrupted by the impact of artificial intelligence and machine learning, the report states. Some also cited the incorporation of sustainability considerations into investments and the changing regulatory landscape.

The report mapped the career progression of CFA Institute members and found the most common job role transition is from analyst to portfolio manager to CIO. Career paths are becoming more varied—primarily influenced by the technology sector via fintech and entrepreneurs, particularly private equity boutiques.

Skills for Success

The CFA Institute uses a career skills framework competency model to help identify the knowledge, skills, abilities and other characteristics needed to perform a job well, the report states. In a dynamic field such as investing, where the skills needed for mastery often change, it is important to differentiate the minimum foundational elements required.

Technical skills are most important at the start of one’s career, with soft skills, leadership skills and “T-shaped” skills growing in importance over time, the report states. T-shaped skills are a combination of deep knowledge in a single domain and wider knowledge in other fields and the ability to connect them.

The most important soft skill category is influencing, persuading and negotiating, the report states. Some of the skills that have become more important in the new world of work are more efficient time management; being effective in influencing, persuading and negotiating; direct communication; and being more resourceful.