The challenge comes in a global study entitled “Future of the Investment Profession” issued on April 5, led by CFA managing director Nick Pollard, which includes findings from a survey of 1,145 industry leaders worldwide, including in the Asia-Pacific. "For those people who are running the investment management industry, they have to come out with their own responses to how their own organization plays this out, and which aspects they want to embrace and which ones they want to downplay. Doing nothing is not a solution,” believes Pollard.

This study shows how important CFA think they are, e.g. “The fundamental purpose of finance is to contribute to society through increases in societal wealth and well-being. Looking at finance as an ecosystem reveals important interconnections and points of friction in how finance currently works in relation to this purpose.” But their diagrams are superb, e.g. The Financial Ecosystem: 

Source & Copyright©2017 - CFA Institute

The study identifies six megatrends which are combining into four important scenarios:

Source & Copyright©2017 - CFA Institute

The study identifies four significant trends: 

• Uncertainties brought about by geopolitical developments such as Brexit, Trump’s election, regulatory reform, etc.
• Disruptions brought about by fast-paced developments in the financial technology (fintech) sector
• The persistent low-yield environment and the resulting shift from passive to active management
• Capitalism is evolving and investment needs to change too.

Investment industry focus needed 

In particular, CFA recommends that the industry focus on changes such as:

• New skills for changed circumstances: recruit and develop talent along new dimensions and improve diversity. “The industry’s biggest challenge is finding leadership who can articulate a compelling vision for the institution and instil an ethical culture. Improving diversity is linked to better performance and culture,” Pollard says.
• Fiduciary implementation: learning to balance fiduciary responsibility by putting the interests of clients first when determining investment strategy, limiting conflicts of interest and investing to the standard of care of a prudent expert – within the context of their own viability.
• Restoring industry trust: emphasize strong values and show societal responsibility; communicate early, fully, and often, and to fill gaps in understanding. 

There is a particular focus on ’The Trust Equation’, and the Trust Checklist for Organisations is must read for all investors. 

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CTMfile take: This report shows how the investment industry feels it is deep in the mire, and that large parts could disappear if they don’t adapt to the four key disrupters: fintech, new parallel worlds, low % for longer, and the need to change their version of capitalism. Corporate treasury investment managers responsible for pension schemes take note.