Securities Industry Development Corporation (SIDC), the
learning and development arm of Securities Commission Malaysia (SC), co-hosted
an event with Chartered Financial Analyst (CFA) Society Malaysia on 26 April 2018. The topic of the event was “Future State of
the Investment Profession”.
According to a survey done by CFA Institute, 84% of
investment leaders expect consolidation of the industry in the next 5-10 years;
70% of the participants in the survey expect investors will increase their
allocation to passive investment vehicles; 52% of CFA charterholders expect
substantial or moderate contraction of profit margin at asset management firms;
while 57% of the participants in the survey expect institutional investors will
reduce cost by insourcing more investment management activities.
The survey on investment leaders revealed that 73% of them
expect environmental, social and governance (ESG) factors will become more
influential; 70% expect financial centers in Asia will become more influential;
but only 11% believe that the investment industry’s impact on society is very
positive; 55% expect globalization will offer new opportunities for investment
professionals; 49% expect new technology will offer new opportunities for
investment professionals.
The following diagram shows the megatrends and potential
future development of the investment industry.
Source: CFA Asia
Pacific Research Exchange (ARX)
Fintech Disruption will have high impact on the future state
of the investment industry. Technology
such as robo-advisor and Blockchain will becoming more dominant in the
future. The Parallel Worlds indicates
that product preferences for personalization, social engagement, speed and
simplicity is very important. Lower interest
rate and returns for the next 5-10 years is due to slower global growth and
political instability. Purposeful
Capitalism is about diversity, culture and sustainability, which will overtake
conventional Capitalism that focuses only on profit.
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