The future of careers in asset management

Author: Maha Khan Phillips

Asset management is changing in a myriad of ways. But what will that mean for its job functions? In this Q&A, Professional Investor asks Ben Burling, Managing Director at Logan Sinclair, and Jo Stone, Director, Asset Management, at Dartmouth Partners, to provide a view.

PI: Will Covid-19 have any long term impact on careers in asset management? The fact that more of us will be working from home with more frequency, even after Covid, comes to mind, for example?

Jo Stone: Covid-19 hasn’t necessarily fundamentally impacted careers in asset management, although the pandemic has most certainly sped up the pace of change which was already happening in the industry, including digital transformation. Many programmes that had been scheduled to take place in the next three to five years have been completed by asset managers within the year. This includes technology adoption, for example wider use of collaboration tools and platforms that aid more real time client reporting. And, whilst the pandemic may not have directly impacted what roles are required, it has certainly changed how productivity and contribution are measured.

With asset managers enjoying less face time with clients and with the markets in turmoil, building brand new client relationships this year has been challenging, and existing clients have expected more real time reporting on performance and much more regular market updates. Another trend that the pandemic has accelerated therefore, has been an increase of resources and technology to improve the client experience.

Could this finally be the end of the traditional salesperson, networking on the golf course and the conference circuit? Distribution teams are having to get used to a “virtual first” approach to sales and this may well continue into the future. Data and content are key and I think we will continue to see asset managers having to take a much more joined up approach to Sales and Marketing.

Ben Burling: I think we are experiencing an archetype shift with working from home policies and it is exciting to see attitudes change. Everyone has seen the impact on the environment, it will be hard, and possibly unnecessary in asset management to return to offices full time for so many reasons.

Working from home policies have the potential to catalyse a more diverse workforce and offer opportunities to those previously excluded or restricted from the industry based on their location or financial situation or even attract new people to the industry. If we can dismantle the office-centric model that has stood for decades, why can’t we rethink everything holding back societal development? 

This moment also has the potential to be a real tipping point for productivity and workflow. Whilst working in an office, working long hours and being physically present can often translate to working hard, when the physical location is removed, people can be evaluated on their delivery and results.

PI: How easy or difficult is it to start or sustain a career when working from home, especially if you are early in your career?

Burling: Regardless of seniority, we have seen difficulties in starting a career or new role remotely.

People early in their career, who learn by seeing and shadowing, may be set back by less office exposure, but that means managers and leaders need to adapt. My message to individuals starting their career is to ask this question at the interview stage: “How do you handle internal and external conversations online and do you have a policy of including those that are learning?”

For young people at the beginning of their careers, networking and those “happened to be there” moments can be invaluable for development. However, there are still plenty of opportunities for virtual networking such as conferences and events that young people can engage with and hopefully recreate some of the exchanges that would happen in person. For more senior employees, often you can rely on your network a bit more but there may still be barriers in terms of process and culture.

The pandemic will definitely force employers to rethink opportunities for employees in terms of personal development, growth and training. Those managers that make a concerted effort to connect with their team, despite the potential difficulties, will be far better placed to develop stronger teams long term and ease the transition for those starting out during this period.

It is important for managers to reach out to all members of their team with language such as: “I am busy but do still call on me, I might be able to help you solve it”. We have seen access to decision makers and a directness in the discussion increase. This will help all those starting out new roles remotely.

I would also add that a continuous home working environment may negatively impact junior employees who are house sharing without suitable long term home office setups and intense careers will be difficult to maintain.

Stone: Starting a new role is considerably more challenging when done remotely, especially if you are early in your career and don’t have the networking experience and confidence to navigate yourself around a business. Not having easy access to those individuals who can help get you up to speed quickly on systems and processes, as well as the challenge it places on building relationships with peers and team members, doesn’t help.

I started a new job this year and, whilst I have been lucky-enough to spend a bit of time in the office, it has definitely been harder to hit the ground running and to build trust with colleagues then it would ordinarily have been when we were all working together daily, and I have over 20 years’ experience behind me!

It also adds an additional layer of complexity to building trust, proving your work rate and general value. I have spoken to a number of people who have started new roles this year and are feeling like they are being really under-utilised by their teams because of this, which will most certainly have a negative impact on their ability to contribute value and also on the pace of their personal development.

One positive of the trend towards working from home becoming the norm, is that it should enable firms to attract and retain a more diverse workforce. Most asset managers seem to be planning to remain flexible post Covid and offer a blended approach to working, with teams spending time together in the office but maintaining a level of working from home. Hopefully, this will trigger some senior returners (e.g. people who have left to have a family and relocated away from London) back to the industry, which can only be a good thing.

PI: The industry seems to be at an inflection point, with margin pressures, shifting business and fee models, and indeed the rise of automation and technological innovation all playing a part. What does this mean for job functions in asset management? Are they changing?

Burling: The pandemic has definitely accelerated change that has been building for a few years.

Digital transformation remains intrinsically important to the development of all departments across the asset management industry as investment, technology, distribution, compliance and product need to better connect and understand how they work together to represent value and efficiency for their clients.

The business model is broken and needs to wipe out inefficiencies, data can’t exist in isolation and business decision lag needs to be removed. Fifteen years ago asset management traditionally outsourced the back office or operations, if anything. Now, market disruptors are offering a fractionalised ownership model that moves beyond operations, into risk, client, legal and compliance frameworks, you will see what the iPod and later, the Apple Store did to the recording industry for example. It’s also happened to the film industry and during the pandemic it’s happened to restaurants.

Someone will build the open source and compliant infrastructure, and fund teams and product structurers will use the platform to sell, using technical sales people or salespeople that really understand their clients through a mix of supportive quantitative data and qualitative data. There's a handful of impressive companies that already have this. The iPod and Apple Store example shows they are not the most cutting edge technology but the best blend of UX/UI and technology to offer a product and service that connects with people.

The ability to manipulate big data alongside small data to ask meaningful questions has always been a significant part of the future of the asset management industry. Data Analysts need to intelligently bring together product, economic data and customer data in one place where it is clean and connected and the pandemic has expedited the timeline for change.

Stone: As we’ve already discussed, we have seen over the last few years that these trends and pressures are impacting long-term industry career profiles with more technology roles, more use of third parties and less traditional operational roles. And this year the shift towards more technology innovation has been amplified, and therefore technologists and data-literate staff are most in demand.

This is not just having an impact on front office careers but Sales, Marketing and Client Services departments at investment management firms have also been investing in digital transformation. Distribution functions are therefore increasingly looking for people who can help capture and analyse client insights and produce meaningful and targeted data, who can bring the science into sales and who can add value to the overall client experience.

PI: For people who are early in their careers, are there particular skill-sets they should think about building?

Stone: Pretty much every job in the industry in future will have some level of technology knowledge required so those wanting to enter the industry now should strongly consider developing data mining & analysis and coding skills.

Client service is also going to be critical to the future success of asset managers, so firms will look for softer skills like communication and collaboration skills. Those with strong technical capabilities, the communication skills to be able to explain the complex to a less sophisticated audience and the emotional intelligence to be able to build rapport, will be much in demand.

Burling: Engineering and coding skills will only further proliferate across the industry. Having the ability to create bespoke IP to solve business issues, automate processes and fix inefficiencies will be invaluable to employers. Most asset managers have a lack of understanding of UX/UI engineers. The current majority of leadership of fund houses understand the key principles of the industry: client decision making and buying or developing investment teams but they aren’t good at building new models or thinking differently about solving the next generations goals.

I would encourage you to fill your own deficit. To develop you’ll need to be good at everything: analytics, relationship building, writing, pitching, fixing broken models, and building new processes. An asset manager with purpose and conviction is rare, if I were early in my career I’d pick a mission-led business, I’d examine closely listed asset managers, they are conflicted with short term performance measurements and long term goals. Examine the neurodiversity of the leadership and middle management and get a mentor to help you.

Foreign language skills will always be important and a real value add for employers, especially considering Brexit.

Additionally, ESG has the potential to embed itself across all job functions, rather than a specialist job role or department which is really what we should have been doing 20 years ago. We have seen clients this year inform us that they were not hiring specialists focusing on ESG but rather adjusting job descriptions and responsibilities across teams to accommodate and champion an ESG focus. Maybe take the CFA UK Certificate in ESG Investing, as my clients seem to be responding to it well.

PI: What will be the careers of the future?

Stone: One chief technology officer I asked this question of recently suggested there would be a "crazy' assortment of titles like "Chief Hyper Intelligence Officer" or "Head of Human Interpretation of Artificial Intelligence".

Certainly, there will continue to be a vast array of opportunities in asset management for technologists including developers, data scientists and cyber security specialists. We have already seen asset managers building out data science hubs in their Technology, Investment and Distribution functions.

In addition, increasingly more asset managers are moving to the cloud and adopting agile working, with some even starting to follow the insurance and banking industry trend of building innovation or ideation hubs. There is likely to be an evolution of product management with firms trying to operate more like Fintechs and develop real-time tech-enabled platforms in-house, so they will increasingly seek talent with the ability to develop new solutions in an agile fashion. 

Another contact I spoke to recently noted that client service will become as important as investment performance. We have already seen the asset management market moving towards a focus on high end tailored solutions to enable the attraction and retention of long-term sticky business. The feeling is that clients will forgive a blip in performance if you are servicing them in the right way. So, we are likely to see Sales, Marketing and Client relationship functions working much more closely together across client-channel lines, and the establishment of more Client Experience and Strategic Global Client teams.

The leaders of the future will not just have to be much more technology-minded but will need the ability to engage with a younger, more tech-minded audience and change the way their firms service and communicate with clients.

Burling: I can see asset managers becoming multi-discipline portals offering wealth, platform accounts, discretionary and cryptocurrency if we continue with industry consolidation. I will be interested to see how many companies employ a “Head of Cryptocurrency” within the next five years.

“Head of AI” may also become the norm but I question the data points that asset managers have to even class it as “AI” and not “Boolean logic” or “natural language query”. That’s not to say that asset managers won’t get there, they just are more likely to buy it in. But there’s a good business case to build it!

Any career that offers employees the ability to create and own a share of IP will be vital. I have a number of future CEOs deciding if they stay for a further ten years or do they leave to join a start-up now.

Whilst I’ve talked at length about data and technology careers, there is still the need to deliver the correct strategies and manage the complexity of the business. Therefore, careers of the future may not necessarily need the ‘hard’ skills but understand their use to move away from digital assimilation and towards digital intuition.

PI: Are asset managers focusing enough on Diversity & Inclusion?  

Burling: Diversity is on its way, inclusion has very far to go. In 2019/20 we had clients engage more with our diversity & inclusion targets, which is a good start. These include processes such as genderless, redacted employer or education name recruitment. 

A lack of enforcement and passion from leadership often fosters a cascading ambivalent response to these initiatives. If CEOs and executive committee members are not involved in hires, then management teams will quite often go down the path of least resistance. It’s important to be acutely aware that not everyone believes diversity is an issue that should be a priority over financial targets. 

I am hopeful that in our role as a service provider to the industry we can be a driving force for change and ask the difficult questions of my clients. “Why are there no black people in your executive management team?” “What are you actively doing to address the gender pay/pension gap?” “Why are there more American-born individuals in your Executive Committee for APAC than those born in Asia?” “Why is only hiring from certain institutions not damaging to your firm?” “How are you currently going about encouraging candidates with a neurodiverse background to apply work with you?”  

The hope is that we can go beyond tokenism and that the pandemic has the potential to help rebuild the industry in a diverse, inclusive and equitable way.

Stone: Most certainly there is an awful lot of talk about Diversity & Inclusion across the asset management industry (to the point that the phrase diversity fatigue is coming up more and more!), but arguably there has not been nearly enough action. Because setting up some networking or employee resource groups, asking for balanced shortlists and moving a couple of senior women into key roles does not fix the problem.  

Tackling cultural barriers and biases is much harder and takes considerably more time to achieve than setting some targets, but are essential to really make the change the industry needs. Thankfully, fantastic bodies like Investment 2020 and the Diversity Project are doing some great work with asset management companies to help move the dial across the industry, but this evolution will take time. 

Ben Burling is Managing Director at Logan Sinclair

 Jo Stone is Director, Asset Management at Dartmouth Partners