Investment professionals are responsible for managing trillions of dollars of assets and growing wealth for both institutional and individual investors.
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Investment professionals are responsible for managing trillions of dollars of assets and growing wealth for both institutional and individual investors.
The CFA Institute is a global not-for-profit organization of investment professionals that distinguish themselves through both maintaining the highest standards of professional competency and by their commitment to ethical practices. Â The CFA Society Hartford is one of 151 chapters of the CFAs Institute worldwide and has approximately 700 members from the Greater Hartford region.
At our second annual “Putting Investors First” conference held May 17 at the Hartford Club, a significant focus was placed on sharing the results of a new CFA Institute survey on the importance of trust in the investment management industry.
The good news is that the level of trust by investors in the financial services industry has increased since the survey was last done in 2016. Nevertheless, the survey reveals a significant gap between what retail investors expect from their financial advisers versus what many advisers actually deliver.
The misalignment between investor expectations and the value proposition conveyed by advisers has brought to light the need for advisers to think and act differently. Investors' needs are changing and so are the tools and resources available to them.
As advocates for best practices that uphold fairness and integrity, the CFA Institute provides a roadmap for how the investment industry can increase its credibility and allay investor concerns. By adhering to the core tenets of professionalism — putting the interests of clients first, being transparent about fees and performance, and demonstrating expertise — advisers will earn the trust of their clients.
A wave of younger clients is now challenging the definition of value in the adviser-client relationship. New tools and technologies are disrupting the traditional model and offer investors new options for consuming financial services. Combined, these trends raise the importance of cultivating professional standards to ensure that the advisory function delivers premium customer outcomes. The customer is king and is ready to hold advisers accountable.
Thriving in this new era will require considering the value proposition offered to each and every customer more closely than ever before. To be sustainable and grow the business, wealth managers must demonstrate greater relevance to the current and future needs of clients and prospects. This includes reaching out to individuals who have not historically seen value in working with a financial adviser.
Of over 3,000 retail investors surveyed, 25 percent do not currently have professional advice concerning their finances. Advisers must actively seek to engage with their audience by truly understanding their needs. Trust and value in the mind of the investor comes from demonstrated credibility and professionalism on the part of the adviser.
The rigorous requirements for earning the CFA Institute sponsored Chartered Financial Analyst (CFA) designation provides a strong foundation of advanced investment analysis, real-world portfolio management skills, and the ethical framework to give charterholders a real advantage in the marketplace. It is the most respected and recognized investment management designation globally.
Successful candidates take an average of four years to complete the program. It includes passing three exams and accumulating 48 months of approved work experience. Each exam level generally requires six months of preparation. Ninety-six percent of CFA charterholders surveyed believe that the designation has broadened their expertise around private client investments.
Advisers will only earn the trust of their clients by being transparent about fees and performance, demonstrating their financial knowledge and putting the needs of their clients first.
John Fuller is president of the CFA Society Hartford and vice president, director of operations for the investment advisory group of Hooker & Holcombe in West Hartford.
