Investment Professional of the Future

Investment Professional of the Future

How Globalization and Growth in Asia Pacific Will Affect the Future Roles of Investment Professionals


There are profound regional differences in the investment industry’s development across the world, as Exhibit 12 shows. Markets with high potential for asset growth and low investment industry penetration will exhibit higher demand for investment professionals, and many of these are found in Asia. We take a closer look at China and India here.

Further opening of China’s financial markets has global implications

China already has the second-biggest equity markets globally measured by domestic market capitalization, as of December 2018.xxvii China’s bond market ranks third globally measured by the value of outstanding debt securities, as of Q3 2018.xxviii

Both markets appear set to support significant demands on future professionals. In particular, as the government loosens restrictions for foreign investors to enter the bond market, international investors are rushing in. Bloomberg Barclays indices will start including China in April 2019. JP Morgan reportedly might be making similar changes to their bond indexes as well.xxix International asset managers will require a significant number of fixed-income professionals who are familiar with China’s nascent debt market. The government has been more open to allowing corporate debt to default in recent years, which has in turn driven up demand for credit analysts.

Investors have often complained about the volatility of the China A-shares market, which may be a function of its relatively high level of retail investor participation and ownership restrictions. This could all change in the coming years, however, because institutional ownership is expected to approach half of the stock market float, according to data provider Wind, and foreign ownership is set to increase. This situation bodes well for the careers of CFA charterholders in China as local capital markets attract more investment flows and the industry expands, even as China’s population nears its

Multinationals can now also set up asset management firms with foreign majority ownership in China. Many large international asset managers are expected to set up wholly owned subsidiaries in China in the coming years. Their staffing needs for mid- to senior-level positions will remain high, and executives who understand the local markets, are at home in the local culture, and also have broad international experience and know-how will be in high demand.

Exhibit 12
Chart looks at Regional Development Differences, specifically industry penetration and AUM Growth potential. Developed markets have high industry penetration but low AUM Growth Potential whereas Asia and Latin America have low industry penetration but high AUM growth potential.

India has the potential to become the world’s future investment hub

As noted in Exhibit 4, the Mercer study for CFA Institute indicated that India is expected to be the fastest-growing market for investment professionals, growing by 33% in the next decade. In addition to benefiting from the country’s strong economic growth and the population’s increasing demand for financial services, India enjoys strong tail winds in the form of favorable globalization and technology trends. We believe India has the potential to become the world’s investment hub in the coming decades.

India’s education system—most notably, the Indian Institutes of Technology (IIT), with campuses across the country— has produced a steady stream of capable engineers. Although pay packages for graduates continue to rise, IIT graduates remain very attractive candidates to international employers. As employers ride the wave of globalization, the India operations at many major international investment fund managers have grown to account for 10%–20% of these managers’ global workforce today, compared with almost zero a decade ago, according to participants in our roundtables.

The positions that multinational investment firms fill in India have been extended to include more investment roles, in addition to IT and operational roles. In our discussions with industry stakeholders, one senior executive from the wealth management operation of a major international bank commented that the firm considers India first when recruiting for all but client-facing roles.

One thing in common across China and India is the role that technology plays. A challenge, however, is whether those looking to enter the investment industry in these markets have the right skill availability. Many in India who have completed all levels of the CFA Program fall short of industry requirements because they lack soft skills and cannot gain the experience needed to become a CFA charterholder. Ironically, in the world’s most populous country in terms of millennials, there may be a skill shortage given a mismatch between skills and industry requirements. Another interesting geographical difference is in the career paths of professionals. In prior research, Mercer examined typical career paths and found that across markets, career paths are similar, although in growing markets, such as India, China, and Hong Kong SAR, career paths are shorter (i.e., there are younger investment professionals in more senior roles).

Job roles are most specialized in the United States, the United Kingdom, and Canada. In Brazil, firms hire very few investment professionals via job postings; these positions are mostly filled by internal hires or by referral. In China, state-owned banks are a training ground for professionals before they move on to asset management firms. The United States is the only major market in which the research analyst role is prevalent as a long-term career.