Why finance professionals need to change the way they work

The advancement of technology into the investment management world is a huge and unalloyed positive for the industry. Today, many clients and regulators feel that this industry is over-priced, opaque and produces little of value. Technology offers us the opportunity to scale, to dramatically improve transparency, and to clearly demonstrate that we help clients achieve their end goals.

In the same way that the discovery of bacteria and the need for hygiene revolutionised and legitimised the medical profession in the 19th century, I believe financial technology provides us with a moment in time of equal importance.

As financial professionals, we must learn to leverage technology so that we can clearly establish our purpose and our value to our clients. We should not fear it, nor should we fight it. Successful firms don’t dodge industry realities. We must address macro challenges such as profit-margin pressures, tightening regulations, and the need to differentiate business models by being attuned to investor needs and wants.

In the art of portfolio construction and investment management, technology leads us to advanced techniques to make decisions driven by the data that financial technology can provide. To succeed in a fintech-driven world, investment professionals needs to supplement their technical skills with cross-disciplinary knowledge around some of the softer aspects of the profession: Listening, empathy and telling stories so that clients can relate to what we are proposing.

Many more of us are going to be on the front lines, dealing directly with clients. We need to bring solutions, not just technical platforms. Advice, financial products and client solutions are more than data and computing power. The talent of the future will need to harness fintech and artificial intelligence to supplement human intelligence—not replace it.

For those in the business of delivering advice, the so-called 'soft skills' further help build trust and take on increased importance in a fintech-driven world. The skills of the future are likely to migrate from working on Excel spreadsheets. Humans will need to be able to interpret numbers, not just calculate them. Culling insights from vast swaths of data will be just as important as collecting the data. The industry is already inundated in data, and humans need to make sense of it all.

Our forthcoming CFA Institute research, The Investment Professional of the Future, sees a future in which 'T-shaped' individuals will flourish. The top horizontal part of the T denotes wider industry knowledge and an ability to connect across disciplines, while the vertical line represents deeper professional relationships and connections.

Firms will succeed by recognising that people and technology are better together. They will need more of these 'T-shaped' professionals—those that have both domain-specific specialist knowledge and wider understanding and perspective, to unlock the full value of their tech platforms.

Investment professionals must adapt in their careers to two underlying types of accelerating and disorienting change to succeed in the future environment: Adaptive change and destructive change. In the former, current roles and responsibilities transform to meet the needs of the new paradigm. In the latter, old roles are replaced by new technology.

Financial professionals must continue to evolve to succeed in the future. No website, app, or software package can advocate for investors like financial professionals can. No robot or artificial intelligence interface can deal with investment uncertainty, poor data and implied risk.

Fintech will continue to change the industry; smart investment management professionals will use the right tools that technology can provide while honing their skill sets to meet the needs of the future.

The author is President and CEO of CFA Institute.

The thoughts and opinions shared here are of the author.