As China's financial markets grow, Hong Kong financial analysts are facing ever keener competition from their mainland counterparts. In a bid to respond to challenges in the industry, Hong Kong professionals must continue to expand their knowledge base while embracing high ethical standards.
To become a successful CFA (Chartered Financial Analyst) charterholder, it is important to be resilient, as the job requires hard work and a real commitment to the profession, says Frederick Tsang, CFA, director, the Hong Kong Society of Financial Analysts.
"CFA candidates must study for the three-level programme which usually takes three years, while managing tough work schedules and frequent business trips," Mr Tsang says. "The curriculum consists of multiple components, which require real commitment from candidates. It's a challenge for busy financial analysts, so time management is crucial."
Mr Tsang emphasises that putting in the effort is well worth it. The CFA designation enhances professionalism and career prospects. The curriculum lays the foundation for young analysts to master essential financial and investment analysis tools, and build their understanding of portfolio management and investment decision making processes.
"The professional designation indicates that analysts have mastered a wide range of investment knowledge and that they have met the profession's high ethical and professional requirements," Mr Tsang adds. "The designation is also an indication of the analyst's level of professional experience, which gives confidence to investors."
Trust and ethics
Regulatory bodies such as the Securities and Futures Commission (SFC) are setting higher requirements for financial institutions, which in turn tighten their internal controls and guidelines for analysts, Mr Tsang remarks.
"Our industry is built on trust. Particularly for institutional investors, credibility is the first criterion when choosing a financial institution. Investors tend to scrutinise the management, internal controls and overall reputation of an investment house before they look at its performance."
The structure of the CFA programme reflects this. Each of the study programme's three levels includes a substantial ethics component. This is also the first module of the first-level curriculum. With 10 to 15 per cent of each level focusing on ethics, candidates' results can be a decisive factor.
Also chairman of China Everbright Limited's risk management committee, Mr Tsang plays a pivotal role in enforcing the code of ethics of his own company. He oversees the drawing up of internal guidelines, which specify both the requirements of external regulatory bodies and those of the company.
Adherence to the guidelines depends on analysts' own attitudes. "In our industry, professionals shouldn't place their own interests before those of their clients. My advice for young CFA charterholders is that good ethics is a long-term asset in their career development. By staying pragmatic and patient as they work their way up, they will reap the rewards in future."
In his capacity as the director of The Hong Kong Society of Financial Analysts, Mr Tsang focuses on promoting continuous education for the society's members.
In addition to training programmes and seminars, the organisation also offers regular lunch meetings featuring international finance specialists and arranges leisure activities like hiking and wine tasting as networking opportunities.
Study groups for CFA candidates are also in place. These serve as platforms for mutual support and the exchange of study tips. Candidates seeking to consolidate their knowledge before sitting exams can take advantage of the short programmes on offer. The organisation also runs short public investment education programmes in collaboration with the SFC and other institutes.
With a prospering mainland China market and H-shares gaining prominence in the Hong Kong market, CFA charterholders can look forward to a challenging future. In the past, both overseas-funded and Hong Kong institutions favoured Hong Kong analysts, but this is changing, Mr Tsang notes.
"Nowadays, mainland analysts are popular with both Hong Kong and overseas-funded institutions and in many cases in Hong Kong they play an important role in research and investment analysis," he says.
With the mainland's fast-growing pool of qualified candidates, Hong Kong CFA charterholders may find it a challenge to build careers across the border in the future. Mr Tsang says, "Every year, several hundred CFA charterholders qualify in China and the rate is increasing. Furthermore, many mainland Chinese professionals working in Hong Kong and China these days are graduates from top universities who have returned from internships at large investment banks overseas. Still, China's fast growing financial market will create ample opportunities for those who excel in the industry."