The COVID-19 pandemic has impacted our lives and businesses. As reopening resumes globally, companies and their employees are figuring out work environments that will work for everyone.

CFA Institute launched the “Future of Work in Investment Management” series in early 2021 to answer pressing questions about the future of the investment industry. The first report of the series highlights some of the changes investment organizations and professionals are likely to make as they reassess the context of their careers, content of their work, and their organizational culture. The report is based on survey data from 4,600 CFA Institute members across 120 markets (the Investment Professionals Survey), as well as from leaders across 41 organizations (the Investment Organization Leaders Survey) in early 2021. This article provides a detailed summary of this report and a recent episode of CFA Institute’s Take 15 Podcast, “Is a Hybrid Model the Future of Work?”

Investment professionals & leaders survey

AMER = Americas
APAC = Asia Pacific
EMEA = Europe, the Middle East, and Africa

Source: CFA Institute

Location, location, location

After the onset of the COVID-19 pandemic, investment professionals were forced to work from home, and companies began rapidly updating their technology. 

Among survey respondents, 53 percent said working remotely had increased their productivity. Early in the pandemic, there were concerns that remote work would negatively impact productivity; however, at the organizational level, only 17 percent of the firms surveyed said productivity losses were a top concern, and only 20 percent of employees noted a dip in productivity. 

The report showcases specific investment management roles that are well suited for a hybrid work environment. Even roles that were once thought to be incompatible with remote work—such as chief investment officers, chief financial officers, and traders—have proven to be adaptable. Client-facing roles, however, report less ability to work remotely. 

The percentage of organizations providing strong support and cultural acceptance of remote work has increased from 15 percent pre-pandemic to 77 percent today. There has been a similar shift in relation to flexible work policies, from 23 percent of organizations supporting them pre-pandemic to 75 percent today. 

Change in remote work support

Strong support: culturally accepted and easy to get approval

Limited support: available in certain circumstances only or with only some managers

No support

Source: CFA Institute

Eighty-one percent of survey respondents would like to work remotely part-time. Employees with less than two years of work experience since earning their CFA charters were least likely to want to work from home, seeing it as reducing their opportunity to learn from their colleagues.  

What motivates you most in your work? 

 Denotes increase from 2019

 Denotes decrease from 2019

 2021 

 2019

Source: CFA Institute

The report also highlights three areas in which investment firms should adapt to the new environment: 

1) Client engagement
There has been a significant shift in client engagement options, particularly in terms of the role of travel and video calls. Both employers and employees expect that business travel will be permanently reduced by 25 to 50 percent. Pre-pandemic, 39 percent of survey respondents were heavy travellers, and only 17 percent expect that level of travel to resume. On the flip side, those reporting to be heavy users of video calls increased from 21 to 82 percent. 

While the industry has embraced the use of video calls, they can only be used as a substitute for business travel and in-person meeting in some cases, such as standard updates. Business travel is still needed at the start of a relationship, at major transition points, and for strategic decision making. The report authors note that “some asset managers and consultants may charge premium rates for more in-person access, and others may use in-person access as a competitive edge, especially for larger clients.”  

2) Operational risks
According to a Baker McKenzie survey, 40 percent of compliance leaders in financial institutions said their organization was employing technology without considering compliance risk. Up to 64 percent predict that regulators will focus their scrutiny on tech-enabled business models, data privacy, and intellectual property protection. 

CFA Institute’s survey revealed similar results, as hybrid work models become the norm. In addition, 15 percent of respondents expect there will be an increase in unethical activity under a remote or hybrid model due to less social pressure to act in accordance with conduct policies and the law. 

3) Professional skills development
As work arrangements change, companies can change their processes and strategies, making professional skills development more important than ever. Soft skills, such as communicating through technology and the leadership to build and maintain team dynamics, are critical in a hybrid work environment. Leaders should be aware of these larger cultural shifts and look to take them into careful consideration in their own organizations as they build a new culture in a hybrid environment. 

Organizational culture shifts

Making policy changes to support flexible work arrangements is a signal that companies understand the importance of managing their workforces and considering employees as key stakeholders. Remote work arrangements, however, can lead to mixed results, depending on company culture. 

An all-remote environment evens the playing field, particularly in terms of inclusion. In an all-remote environment, people in satellite offices receive the same acknowledgement as those at the head office, as everyone is attending the meetings remotely. 

In addition, video conferencing provides insights into their colleagues’ personal lives and creates more connections. The CFA Institute’s Investment Organization Leaders Survey revealed that 59 percent of organizations said that organizational culture has improved as people learned more about each other’s personal lives. However, 26 percent said that culture has suffered due to lack of in-person interaction. 

The remote work environment has also shifted motivating factors for investment professionals. Previously, intrinsic motivators—such as a passion for markets and learning new things—were important. Today, the extrinsic motivators—such as financial compensation, flexibility, and having good colleagues—have become more important. 

These cultural shifts have affected professionals’ commitment to the investment industry. Half of the respondents in the 2021 Investment Professionals Survey said they would consider taking a new position outside of the investment industry. 

A lack of in-person interactions and burnout as employees juggle work and personal priorities while working from home may lead to a decline in employee engagement. Companies can counteract this by having a clear organizational purpose and good leaders who communicate in clear and compelling ways.

Conclusion

A hybrid of working at the office and at home is the future of work in investment management. Most companies that previously did not support flexible or remote work have changed their stance. There are challenges in a hybrid environment, however, such as the risk of a decline in productivity and engagement, operational and compliance risks due to extensive use of technology, and erosion of company culture. We will have to collaborate and experiment with different arrangements to find the model that works best. Global companies may have an advantage in this regard and find the right approach sooner, as they have teams who habitually worked together remotely even before the pandemic. 

Content of this article is copyright 2021, CFA Institute. Reproduced from Future of Work in Investment Management: Context, Content, Culture with permission from CFA Institute. All rights reserved.