Globalisation has brought new opportunities for investment professionals and at the same time led to a greater demand for their skills. To take on new challenges, analysts must equip themselves with quality, up-to-date knowledge of both local and world markets.
"Some 20 years ago, financial analysts only had to worry about the local market," says Jan Squires, managing director of Asia Pacific operations at CFA Institute's regional office in Hong Kong. "Nowadays, they need to know so much more."
With over 94,000 members worldwide, including 13,000 members in the Asia Pacific region, CFA Institute is a global, non-profit association that aims to set the highest standards of ethics, education and professional excellence for investment analysts.
One of the institute's main features is its CFA programme, a three-level, self-study, graduate-level curriculum that culminates in the awarding of the CFA designation. Recognised worldwide and relevant to every market, the programme offers investment professionals credibility, a competitive advantage, a global network of connections and media recognition. It also demonstrates an analyst's long-term commitment to the profession.
The CFA programme has become a designation of excellence in the investment community worldwide. It is not a requirement for analysts, but it provides them with a professional advantage, particularly when competing for a promotion or new position. "Better financial and career rewards await those who have successfully completed the programme," Dr Squires says.
"Continuous education and life-long learning are an essential part of the CFA programme's raison d'etre, and one that the institute emphasises. As markets are changing constantly, new and diverse products emerge and analysts need to be aware of these. They can do so by utilising the numerous education tools we have to offer," Dr Squires says. "However, they ultimately have to remind themselves that the investor's interests must be served first and foremost."
Another important function of CFA Institute is its Centre for Financial Market Integrity, a research and policy authority on global capital market issues. The centre's missions are to promote fair and open markets and advocate for investor protection and high professional standards. The centre acts as a multi-functional channel that addresses issues such as fairness, efficiency and investor protection by developing standards and codes of conduct, speaking out to regulators, employers and media, and working to improve financial reporting. It also conducts research and promotes ethical standards for investors on topics relating to corporate governance, short-term financial results, and other common concerns of investors in the industry.
Ethics also constitute a large component of the CFA programme. CFA Institute has a long history of advocating on such issues on behalf of members and investors in general. According to Dr Squires, the programme's success comes from the active involvement of its practitioners as they take part in every stage of the process. "Studying and passing the examinations are important steps to CFA Institute membership, but most important of all is committing to uphold our code of ethics and conduct," he says, adding that an annual professional conduct statement is required from each member.
With its Asia Pacific branch located in Hong Kong, the institute makes an enormous contribution to the region's financial prosperity and stability. It is also making its presence felt in China. There are currently 1,130 active CFA Institute members on the mainland, all holding the CFA designation and ready to address investors' needs, and this number is growing rapidly.
"It's always a challenge to find people who are both skilled and ethically grounded and focused on the interests of investors. We understand the mainland requires a large number of well-trained professionals. So far, the majority of our CFA charterholders are located in Beijing, Shanghai, Shenzhen and Guangzhou. There is little penetration elsewhere. We would definitely like to reach out and promote our CFA programme to the second- and third-tier cities in China," Dr Squires says.
Having made a start in China, Dr Squires says the institute will continue to grow globally. "We don't have a large Latin American or South African presence yet. We would like to grow in those regions and expand our existing local member societies regions. We will continue to promote the highest standards of ethics, professional skills and lifelong learning, and to contribute to the positive development of the global investment industry."
Dr Squires predicts that the local wealth management sector will be a major growth area in the next five to 10 years as economies develop and individuals accumulate greater wealth. "We have already adjusted our curriculum to include more emphasis on working with individual investors and private clients, adding interesting topics such as behavioural finance which helps to determine an investor's risks and investment constraints," he says. Other areas being addressed include alternative assets such as hedge funds and the consistent reporting of financial results. "CFA charterholders of the future will be even more knowledgeable than those of today, and they will continue to demonstrate the highest ethical standards," Dr Squires says.