John L. Bowman, CFA, Managing Director, Americas, of CFA Institute addressed the crowd of more than 1600 investment professionals at the 70th CFA Institute Annual Conference in Philadelphia to update them on the progress that they have made in leading the investment profession.
Below is the transcript of his remarks.
Good morning, welcome back to the CFA Institute Annual Conference. As you heard from Paul yesterday, we’re celebrating both our organizational and our conference 70th year anniversary.
Our founders were committed to bringing members together to transform what had simply been a “trade” into a profession. All that began in the Spring of 1947, when visionaries from five societies — New York, Boston, Providence, Chicago, and, yes, Philadelphia — met at the New York Athletic Club.
And on May 2, just a few weeks ago, a group of us had the privilege of sharing a special celebration at that very same venue to honor and pay tribute to those pioneers whose sense of purpose, values, and legacy are still flourishing today, seven decades after their first initial meeting, to create “a more perfect union.”
The point I’d like to make in sharing this history with you is “they got it right.” In fact, you may be surprised that not much has changed. Back then, as it does today, every society and every member counts, and every step forward has moved us closer to our goal of building a profession that truly serves the communities in which we live and work. The pioneers of our organization stated, “Professions are not founded. They grow.”
There is no doubt, we have grown both in society partners and members. Today, we are supported by 147,000 members and 148 partner societies, including our newest society in Shenzhen, China. And our mission hasn’t wavered.
As investment management professionals, our role in society is a crucial one. We are stewards of other people’s hopes and aspirations. It is thanks to your expertise and passion that jobs and wealth are created. Businesses grow. People can retire with dignity. Economies and communities prosper.
We thank you for sharing our passion and vision as we work together to continue growing a profession that is worthy of public trust and confidence. For those of us at CFA Institute, we are here to serve and address your needs, because our work is far from over.
As I committed to you last year, with the formalization of the Americas Region, we have worked hard to turn our perspective outward towards you, our members. To delivering more products and services that matter to you. And hopefully, you’re seeing and feeling a difference. In that vein, I’d like to provide a brief regional update and progress report of our three-year strategy framed around our four key priorities.
Last year, we announced that we were going to increase our focus on private wealth management. Despite the roughly 40% of our members in the region who work for organizations that serve primarily private clients, only 2% of high-net-worth investors have awareness of the CFA charter.
We admitted we could do a better job of serving and enabling our growing and abundant membership who manage private wealth. We said we were going to increase recognition of the CFA charter among high-net worth investors and position CFA charterholders as integral to the wealth management process.
In March, at our sold-out Wealth Management Conference in Nashville, we unveiled our “New Way Forward” to take a leadership role in helping to facilitate the future of wealth management.
As part of that new commitment, we released a signature thought leadership piece: The Value of Premium Wealth Management Advice, which is available in the Forum.
We also developed a private wealth brand campaign, initially running in four strategic markets, and we committed to stepped-up practice management tools and continuing education as well as intensifying our advocacy work on behalf of private wealth members.
But despite these initial accomplishments in year one, we are screaming in a very noisy and crowded space, and frankly, we were fashionably late to the party. For decades, the wealth management industry has let down the public in its attempt to professionalize – standards are too low, the public is confused, and qualifications are too uneven.
No investment professional is in a better position to claim the higher ground than the charterholder. And as your professional body, we want to exploit that privilege on behalf of you and your client. In this period of rapid evolution of financial advice models and disruption from technology and regulation, we must be bold and decisive if we want to overcome these challenges and maintain relevance.
Our primary focus in the coming months will be to crystallize the differentiated value proposition that charterholders and CFA Institute offer to the wealth management value chain. We must ensure we are fit for purpose to provide value to the future wealthy client.
Last year, we expressed concern about our industry’s reputation in the public square. Our competency, fees, motivations, and integrity are under intense scrutiny. We’ve lost the PR battle for the greater good of our industry and we must seize back the narrative that investment management is a necessary building block to help societies and communities thrive.
To cultivate a true profession that has a clean license to operate on Main Street, like the medical, law or accounting professions, we argued for a two-legged approach: 1) amplifying our voice on targeted advocacy work in the media, and 2) strategically engaging and partnering with the C-suite. So, we said that to create an industry business model that was sustainable, value-focused and always put the client first, we needed to influence the influencers.
We’ve endeavored to be much more vocal on regulatory matters. Over the last year, we provided in-depth coverage of the DOL fiduciary duty rule and other regulatory viewpoints in several prominently placed interviews and op-eds in the Wall Street Journal, The Hill, Financial Advisor, P&I and CNBC. Our new PR agency, Ogilvy, has brought a much more proactive, creative and provocative posture to our cadence and messaging, and I’m hopeful you’ve noticed.
And in direct response to member feedback, and as another example of how we’re turning our perspective towards you, our members, we created and held the first meeting of the US Advocacy Advisory Committee composed of local society leaders, to make sure that our regulatory agenda is your agenda. To ensure that what you see us trumpeting in the press are the issues that you want your member dollars focused on.
Regarding the C-suite, as I mentioned yesterday, Monday’s Wall Street Journal featured a full-page ad of an open letter to senior leaders of the asset management industry calling them to sign the CFA Institute Asset Manager Code. In Boston earlier this year, we launched our first C-suite city “takeover” that included support of an anchor society event, PR and media interviews, a localized brand campaign and heavy C-suite meeting engagement.
We believe these concentrated and intense blasts of promotion and senior industry leadership activity will provide bridges to conversations and collaborative work that will create greater impact. We have several more city takeovers planned in the next 12 months.
Quite candidly, our historical challenge with engaging the C-Suite is justifying a regular rhythm of relevant interactions and compelling content that interests them and helps them manage their businesses. But change only happens from the inside out and from the top down, so we must work together with the highest levels of the industry in order to transform it.
Last year, we also said we would empower societies. Changing the mindset of investors and delivering member value requires local touchpoints – faces and relationships. Fortunately, we have an established local network of 89 member societies in the region that serve members so that members in turn can serve their clients. And so, we made a commitment to bring to bear all the resources, both in-kind and monetary, to help societies impact, shape, and create more relevancy in the markets they serve.
This past year, we strived to build better partnerships with societies and continued to improve our product and service offerings to members and other stakeholders. We’re far from perfect, but I’m confident we’re making strong progress.
As an example, after three years of discussions, we have achieved agreement among 12 Canadian societies to formalize CFA Societies Canada, a new pan-Canadian entity to allow for country wide advocacy, brand awareness, and events. My heartfelt thanks to the leadership of our Canadian societies and our PCRs Aaron Brown and Clayton Gall for their bold and sacrificial leadership toward bringing this vision to fruition.
We also secured interest from most our regional societies for our Society Brand Activation program, which provides societies funds and agency support to broaden their reach locally and publicly through advertising campaigns. From ads on hot air balloons in New Mexico, to movie theaters in the Cayman Islands to bus stops in São Paulo, we are making it known that CFA charterholders are the most-trusted experts in the industry.
And in case you haven’t heard, earlier this year, Boston Security Analysts Society changed its name to CFA Society Boston — and the more breaking news is that the New York Society of Security Analysts will officially become CFA Society New York in a few short weeks. We now have two of our founding societies that will more explicitly capitalize on the CFA Institute brand to help further our collective mission and better serve their local members.
Rebranding your name after nearly a century is no small feat, and we couldn’t be more thrilled to support these monumental decisions and undertakings. Kudos to these courageous society leaders. We know that our collective work is much more impactful when activity and value is delivered through the local communities. Our local society partnerships are the fuel that nourishes this organization, always has been, and we will continue to ratchet up our support and deployment of increased resources.
Finally, last year we said we were going to extend our reach in Brazil and Mexico. These two Latin American countries are the two largest economies in the sub-region with the most influential firms and regulators. Given the projected growth in Latin America, we said we would aim to increase the demand for our professionalism agenda and credentials with firms, regulators and universities. In short, the thinking was that if we can get Brazil and Mexico right, our success will be contagious through the region.
One of the highlights of the year, for me, was opening the CFA Society Brazil office in São Paulo – the first physical society office in Latin America. The office is staffed with a passionate local team that provides an important foothold in the region to push our agenda forward. We held our first ever Latin America Investment Conference in Cancun, Mexico, and are in the early stages of planning our second in Rio next year.
And thanks to a dedicated Americas team and local society leaders, we’ve secured regulatory waivers from several licensing and oversight bodies in the sub-region to accept the CFA charter in lieu of country-specific credentials required to practice in the industry.
While there are enormous opportunities for our programs in Latin America, the economic, political and social trappings remain fragile and volatile. A sustainable future that endures inevitable volatility and challenges in any emerging market is therefore contingent upon building a solid growth platform — one with appropriate infrastructure, a mature staffing and governance model, a deep volunteer base and senior industry partnerships. We are committed to doing just that.
Ladies and gentleman, many have gone before us, but our work is just beginning.
And, despite my optimism about our start, I have no delusions that we are in year one of a marathon. And it’s a marathon run with tectonic shifts altering and threatening our path. The industry’s core continues to be under immense pressure. Skillset demands are shifting, technology and artificial intelligence are offering hybrid, and perhaps even substitutionary, models of investment management. The regulatory agenda has never been more unpredictable, fee pressure is increasing, the passive/active debate is intensifying, trust issues abound, and we are teetering on post-growth status in the CFA Program in North America.
That’s why it’s so critical that we get both our diagnosis and prescription right.
That’s why it’s so critical that this strategic plan and set of objectives is informed and bears the mark of all of you.
That’s why we need your help and support at the local level. We can’t possibly get this done alone from Charlottesville and New York. This mission must be personal. Our next 70 years starts now. Let’s work together in the Americas and globally to build upon the legacy of our founding fathers in building a profession designed to serve investors.
Thanks very much.
Follow the 70th CFA Institute Annual Conference online with the Virtual Link. It’s an insider’s perspective with live broadcasts of select sessions, exclusive speaker interviews, discussions of current topics, and updates on CFA Institute initiatives.
All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.
Photo courtesy of W. Scott Mitchell