The investment industry faces a growing skills gap around big data and ESG

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Radhika Panjwani is a former Toronto journalist and blogger.

The investment industry in Canada has a somewhat tricky problem.

It will have to retrain and re-skill – with some sense of urgency – a large cohort of mid-career and middle-aged workers, and bring them into the age of technology.

“There has been a disruption in the industry, particularly in terms of a gap between supply and demand for skills,” says Viveck Panjabi, 32, a research associate at National Bank Financial. “Recent trends I have noticed in the investment management industry relate to Fintech, Blockchain, Machine Learning and Environmental, Social and Governance (ESG). Over the next five years, I think fund managers and investment management firms will look more to ESG-focused companies and look to incorporate more clean energy stocks as a percentage of their portfolios.

Where sufficient ESG data exists, it is incorporated into the investment process.

Panjabi works in sell-side equity research covering 16 Toronto Stock Exchange-listed companies focused on the sustainability and cleantech sector, and he admits that big data technologies will soon become a big driver.

Mr. Panjabi’s observances are in line with the findings of a CFA Institute report, which indicates that the largest gaps between the interest in learning and the supply of expertise are in the area of ​​emerging technologies in Canada. The industry needs tech-savvy professionals comfortable with artificial intelligence (AI), machine learning (ML), and decentralized finance. Additionally, Canada needs investment professionals who can analyze data related to future pathways to get Canada to net zero by 2050, but their numbers are low.

No greenwashing, just facts

“ESG has introduced a level of complexity to investing that I’ve never seen before in my career,” said one CFA Institute expert interviewed. “This complexity comes mainly from two sources: the values ​​introduced and the differences in materiality by sub-sector. It is this last source that introduces the opportunity for a skills-based approach to investing.

Sustainable investing is based on the idea that ESG/climate considerations are important to both investors and society and that we need to develop sustainability accounting for both purposes.

But to integrate ESG/climate into the investment industry, the sector will need to develop and hone the skills and capabilities of its workforce. It will not only need new talent, but may need to create new learning pathways for its current workers.

AllianceBernstein, a New York-based global asset management firm, in partnership with Columbia University, has created an academy on climate change and investing. The academy provides its clients and partners with training in climate-sensitive investing so that they are aware of the science of climate change and its impact on investment decisions.

T-skills

More than a third of CFA Institute members surveyed acknowledged that their roles would change significantly over the next five to ten years. And the biggest disruptors will be new analytics methods, including AI and ML.

“The good news is that most investment roles are going to be changed in interesting ways because you’ll have much more reliable data feeds,” noted Rebecca Fender, head of strategy and governance for research, advocacy. and standards at the CFA Institute and lead author of the report. “As a result, professionals will have more time to do a thorough analysis.”

Soft skills such as the ability to influence, persuade, manage time effectively and communicate remain essential. Hiring managers said finding candidates with T-shaped skills remains an ongoing challenge. “T-shaped skills” refer to the qualities that make an employee valuable. The vertical bar in the “T” represents in-depth subject matter expertise, while the horizontal bar is that individual’s ability to connect to cross disciplines and bring it all together.

Way to go – training, retraining

Less than half of respondents in the CFA Institute report said they receive support from employers to develop the new skills they need. And this is perhaps the stumbling block to the introduction of reconversion initiatives. Retraining seems to be the antidote to the skills gap.

In 2018, Guardian Life, an American insurance company, in partnership with the General Assembly to create a data science curriculum and gave salaried actuaries time off to learn.

Similarly, Verizon’s development program provides free technical and soft skills training to its employees. The program was developed in partnership with Generation USA, a non-profit organization. The 10- to 15-week online programs are aimed at roles such as Cybersecurity Analyst, IT Support Specialist, and Junior Cloud Practitioner.

Investment bank JP Morgan has Reserve more than $350 million for its development plan, New Skills at Work. Under the plan, the company will spend $200 million to train people for new, in-demand tech jobs; investing some $125 million to improve existing training courses at community colleges; and it will allocate $25 million to research initiatives to understand current and future labor market trends.

“One of the things that’s interesting when you compare our 2017 report to the current one is that there were a lot of skills that people thought they were acquiring, but over the last few years we’ve seen more people take action,” said Aile. “The action/aspiration ratio has changed and that’s good.”

What I read on the web

  • A recent Microsoft Work Trends 2022 index report found that the average Microsoft Teams user now sends 42% more chats per person after hours. And weekly meeting time has increased by 148% since February 2020. Some key findings are that employees have now found a new “worthwhile” equation; managers are caught between leadership and employee expectations.
  • In this article Sam Dogen, 45, an investment professional, recounts how he negotiated a severance package with his employer in 2012 and decided to retire, using income from his rental properties, stock dividends and sales of electronic books. But a year later, he realized that a life of leisure was not for him. Today, Mr. Dogen considers himself a “false pensioner” because he now indulges in side activities to occupy his time.
  • An Oxford Internet Institute study of 39,000 video gamers found “little to no evidence” that time spent gaming affects their well-being. The results contradict a 2020 study from the same department, but with a smaller test group, which suggested those who played longer were happier. “Common sense says that if you have more free time to play video games, you’re probably a happier person,” Professor Andrew Przybylski told BBC News. article. He worked on both studies. “But contrary to what we might think games are good or bad for us, we found [in this latest study] pretty conclusive evidence that the amount of gaming you play has no bearing on changes in well-being.

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