We speak of skills in the industry, but employers will often reference “competency models” in which competency is associated with “knowledge, skills, and abilities” to describe the exact needs of the job and its function.
Knowledge, skills, and abilities are qualifying statements about competencies that align to the suitability of a professional for specific roles at work. They govern the talent and expertise, experience, and accomplishments that professionals need to perform at the highest level, according to 2019 CFA Institute practice analysis data collection, which is used to inform the CFA curriculum.xxxii
This discussion has covered some trending skill areas and how much CFA Institute members and CFA Program candidates are currently learning. We also asked how many are already proficient in these areas. Few say they are proficient, although 24% say they are already proficient in soft skills. In contrast, just 6% say they are proficient in data analysis coding. Looking regionally, self-assessed proficiency levels are lowest in Asia, which is consistent with research indicating there is a skill gap in the region.xxxiii
With these indications of supply of talent, we asked industry leaders what skills are most in demand for the future. These are categorized in four main areas in Exhibit 13.
Percentages indicate the number of expert opinion survey responses ranking each item first. Respondents were asked to rank each set of skills and then the four categories as a whole. This summarizes several questions: Rank the importance of the following skills/skill categories for successful investment professionals in the next 5–10 years.
|Solutions skills (i.e., understanding client needs and developing appropriate portfolios)||40%|
|Foundational investment skills (as in the CFA Program)||31%|
|Information technology and computer science||9%|
|Science, engineering, math||5%|
|ESG analysis skills||1%|
|Ability to articulate mission and vision||45%|
|Instills an ethical culture||32%|
|Globally attuned, familiarity with multiple languages||3%|
|Ability to connect across disciplines||21%|
|Understanding and leveraging diverse perspectives||21%|
|Cultivating a valuable network of contacts||20%|
|Systems savvy/understanding larger context||14%|
It is important to note that the mix of skills typically varies over the career of an investment professional. There is a natural bias to technical skills at the beginning of the career and an increasing emphasis on the other three skill types as the career develops. Exhibit 14 is our suggested pathway; it illustrates the normative progression of a hypothetical professional tracked through a productive career.
We also asked survey respondents about the availability of these skills in the marketplace. The most difficult to find are generally soft skills, followed by T-shaped skills, leadership skills, and then technical skills, as shown in Exhibit 15. Although this result does not diminish the importance of technical skills for career success in the investment industry, it does imply that the industry has undertrained in the other areas and has an opportunity to improve. The trend toward hyper-specialization in technical areas in the industry has resulted in fewer generalists focused on soft skills and T-shaped skills.
One key, overarching dimension to competencies is the part played by ethics. Strong ethical orientation is derived from knowledge (e.g., clarity surrounding conflicts of interests and doing the right thing) and abilities (e.g., applying strong values in serving others and understanding the client point of view). Increased accountability of investment firms and the importance placed on the societal license to operate will be conducive to individuals with ethical competencies and good character.
We comment later on the idea that all these types of skills can be developed—most likely through a growth mindset and access to high-quality educational programs and other learning resources.