Career Path

Portfolio strategist sees the big picture

By Priscilla Chong

Patrick Shum, portfolio strategist, global investment strategy, Karl Thomson Investment Consultants Limited
Photo: Edde Ngan

It has long been said that the secret to successful investing is to diversify. Therefore, some professional financial advisers and strategists are surprised that many local investors still seem to concentrate so much of their money-making activities on the ups and downs of the stock market.

"Stocks are only one of many investment products, especially when we are talking about investing for the different stages of life," says Patrick Shum, a portfolio strategist in global investment for Karl Thomson Investment Consultants Limited. "It is important to take full account of all the options."

Mr Shum's primary duties include developing comprehensive financial plans for clients and providing investment advice to help the company's team of consultants manage client portfolios. His usual routine also involves writing a daily commentary on the Hong Kong stock market and a weekly assessment of global financial developments. This has led to regular TV appearances in which he comments on the latest market trends.

Despite being part of the research team, which is often seen as being a "behind the scenes" function, there are now many opportunities for financial experts like Mr Shum to gain media exposure and speak on behalf of their companies. Their insights are valued, but require long hours of research work to prepare and check the relevant information. "We have to digest an immense amount of numerical data every day, so that what we say is well supported and reliable," he says.

We have to give comments regardless of how they may affect a company's business

Understanding figures
Therefore, the first step to becoming a successful portfolio strategist is to have an eye for detail, a broad knowledge of financial markets, and to be sensitive to figures. "Before joining this industry, I thought the job mainly concerned stocks and mutual funds, but when you are a strategist for an independent financial adviser (IFA), the product range and scope of responsibilities are much wider," he explains.

Mr Shum set his sights on a career in the financial industry after graduating with a Bachelor's degree in economics. He was offered a position working for the research team of an IFA and his first role required reading newspapers and financial reports for two to three hours a day. He notes that not all graduates can settle into that kind of routine and that around 80 per cent of new recruits in research positions leave within a year. Clearly, it is a career which best suits those who have the patience and skills to analyse a large volume of numerical data and extract the key points.

In his own case, Mr Shum has found that keeping closely in touch with the latest political and economic news has definitely broadened his perspective. His eight years in the industry have given him the knowledge and experience to interpret financial developments and forecast the possible impact of changes in economic policies.

Independent views
As there are usually comparatively few openings for analysts, he suggests that graduates should start with an IFA, even a small one, where they will have access to numerous sources of information and can learn about a wider range of products. They will also get to understand the many different views expressed by other professional analysts and become more independent in their thinking. "Analysts must be impartial. We have to give comments regardless of how they may affect a company's business, especially if we feel it is not the right time to buy," Mr Shum adds.

An academic background in economics or finance is preferred, but all staff working in the field of investment are still required to learn continuously. This will involve attaining specific professional standards and taking examinations for such qualifications as chartered financial analyst, certified financial planner or financial risk manager.

There is often no direct recruitment for positions as portfolio strategists. People in such posts might begin as investment consultants with an IFA or, if they are lucky, find a research position in a fund house or securities firm. Later on, if they have become portfolio strategists and done well, they may move on to being fund managers, dealing more directly with investments. For that to happen, it is essential to have a track record showing good performance.

Portfolio strategists can easily assess the accuracy of their forecasts by checking what actually occurs in the market. Another measure of performance is how willing colleagues and clients are to ask for and follow their advice. If their recommended investments are making a good return, it is the best possible proof that the portfolio strategist is doing a good job.

China Opportunities

As China's financial markets are still developing, there are unlikely to be opportunities for Hong Kong-based portfolio strategists to relocate to the mainland in the near future. However, many do need to keep a close eye on mainland market changes. Anyone who does have medium-term plans to develop their career in China should be sure to keep fully up to date with financial and regulatory developments and to achieve proficiency in Mandarin.


Taken from Career Times 02 July 2005, p. C8
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