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Radhika Panjwani is a former journalist from Toronto and a blogger.
The investment industry in Canada has a somewhat vexing problem.
It will need to retrain and reskill – with some sense of urgency – a sizable cohort of midcareer, and middle-aged workers, and nudge them into the age of technology.
“There has been a disruption in the industry, especially with respect to a demand and supply gap in skills,” says Viveck Panjabi, 32, a research associate at National Bank Financial. “The recent trends I have noticed across the investment management industry have been around Fintech, blockchain, machine learning and environmental, social, and governance (ESG). In the next five years, I believe fund managers and investment management firms will pivot more toward ESG-centric companies and look to integrate more of clean energy stocks as a percentage of their portfolios.”
When there’s sufficient data around ESG, these are integrated into the investment process.
Mr. Panjabi works in sell-side equity research covering 16 publicly listed companies on the Toronto Stock Exchange focused on the sustainability and cleantech sector, and he admits big data technologies will soon become an important driver.
Mr. Panjabi’s observances are in line with the findings of a CFA Institute report, which says the largest gaps between interest in learning and supply of expertise is in the area of emerging technologies in Canada. The sector needs tech-savvy professionals comfortable around artificial intelligence (AI), machine learning (ML) and decentralized finance. Also, Canada needs investment professionals who are adept at analyzing data related to future pathways for getting Canada to net zero by 2050, but their numbers are small.
No greenwashing, just facts
“ESG has introduced a level of complexity into investing that I haven’t seen before in my career,” noted a CFA Institute expert who was surveyed. “That complexity comes principally from two sources: the values introduced and the materiality differences by sub-sector. It is the latter source that introduces the opportunity for a skill-based investment approach.”
Sustainable investing is built on the idea that ESG/climate considerations are significant to both investors and society and that we need to develop sustainability accounting for both purposes.
But to incorporate ESG/climate into the investment industry, the sector will need to develop and refine the skills and abilities of its work force. It will not only need new talent, but may have to create new learning pathways for its current workers.
AllianceBernstein, a New York based global asset management firm, in partnership with Columbia University established a Climate Change and Investment Academy. The academy delivers climate-aware investing learning for its clients and partners so they are aware of the science of climate change and its impact on investment decisions.
T-shaped skills
More than a third of CFA Institute members surveyed acknowledged their roles would be significantly altered over the next five to 10 years. And the biggest disruptive factors will be new analytical methods, including AI and ML.
“The good news is that most investment roles are going to be changed in an interesting way because you will have data feeds that are much more reliable,” noted Rebecca Fender, head of strategy and governance for Research, Advocacy and Standards at CFA Institute and lead author of the report. “As a result, professionals will have more time to do in-depth analysis.”
Soft skills such as the ability to influence, persuade, manage time effectively and communicate remain critical. Hiring managers said finding candidates with T-shaped skills remains an ongoing challenge. ‘T-shaped skills’ refers to qualities that make an employee valuable. The vertical bar in the ‘T’ represents deep subject matter expertise, while the horizontal bar is the ability of that individual to connect to cross-disciplines and bring it all together.
Road ahead – training, reskilling
Fewer than half of survey respondents in the CFA Institute report said they receive support from employers to develop the new skills they need. And that may be the stumbling block to introducing reskilling initiatives. Reskilling appears to be the antidote for the skills gap.
In 2018, Guardian Life, a U.S. insurance company, partnered with General Assembly to create a data science curriculum and gave the actuaries on its payroll time away from work to learn.
Similarly, Verizon’s upskilling program offers free technical and soft skills training to its employees. The program was developed in partnership with Generation USA, a non-profit. The 10-to-15 week online programs are for roles including cybersecurity analyst, IT support specialist and junior cloud practitioner.
Investment bank JP Morgan has earmarked more than $350-million for its upskill plan, New Skills at Work. As part of this plan, the company will spend $200-million to train people for new, in-demand tech jobs; invest some $125-million to improve existing training courses through community colleges; and it will direct $25-million toward research initiatives to understand current and future labour 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 were thinking of acquiring, but in the last few years we have seen more people take action,” said Ms. Fender. “The action to aspiration ratio has changed and that’s good.”
What I’m reading around the web
A recent Microsoft Work Trends Index 2022 report found the average Microsoft Teams user now sends 42 per cent more chats per person after hours. And weekly meeting time has increased 148 per cent since February, 2020. Some key findings are employees have now found a new “worth it” equation; managers are caught between leadership and employee expectations.
In this article Sam Dogen, 45, an investment professional, shares how he negotiated a severance package with his employer in 2012 and decided to retire, thanks to income from his rental properties, stock dividends and e-book sales. But one year into it, he realized a life of leisure wasn’t for him. Today, Mr. Dogen considers himself a “fake retiree” because he now takes on side-hustles to fill his time.
A study by the Oxford Internet Institute of 39,000 video gamers found “little to no evidence” that time spent playing affects their well-being. The results contradict a 2020 study by the same department, but with a smaller test group, which suggested those who played for longer were happier. “Common sense says if you have more free time to play video games, you’re probably a happier person,” said Professor Andrew Przybylski, in a BBC News article. He worked on both studies. ”But contrary to what we might think about games being good or bad for us, we found [in this latest study] pretty conclusive evidence that how much you play doesn’t really have any bearing whatsoever on changes in well-being.”
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TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets climbed to their best week of the year.
“It’s been almost a complete opposite or retracement of what we saw last week,” said Philip Petursson, chief investment strategist at IG Wealth Management.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
While last week saw a “healthy” pullback on weaker economic data, this week investors appeared to be buying the dip and hoping the central bank “comes to the rescue,” said Petursson.
Next week, the U.S. Federal Reserve is widely expected to cut its key interest rate for the first time in several years after it significantly hiked it to fight inflation.
But the magnitude of that first cut has been the subject of debate, and the market appears split on whether the cut will be a quarter of a percentage point or a larger half-point reduction.
Petursson thinks it’s clear the smaller cut is coming. Economic data recently hasn’t been great, but it hasn’t been that bad either, he said — and inflation may have come down significantly, but it’s not defeated just yet.
“I think they’re going to be very steady,” he said, with one small cut at each of their three decisions scheduled for the rest of 2024, and more into 2025.
“I don’t think there’s a sense of urgency on the part of the Fed that they have to do something immediately.
A larger cut could also send the wrong message to the markets, added Petursson: that the Fed made a mistake in waiting this long to cut, or that it’s seeing concerning signs in the economy.
It would also be “counter to what they’ve signaled,” he said.
More important than the cut — other than the new tone it sets — will be what Fed chair Jerome Powell has to say, according to Petursson.
“That’s going to be more important than the size of the cut itself,” he said.
In Canada, where the central bank has already cut three times, Petursson expects two more before the year is through.
“Here, the labour situation is worse than what we see in the United States,” he said.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
