CFA Society Toronto’s members work across all sectors of the investment industry. The Analyst spoke with three CFA charterholders who have made the transition to academia, teaching and inspiring the next generation of investment professionals. In the following interviews, they share a glimpse of this work.

Steve Balaban, CFA, is the founder and chief investment officer of Mink Capital, a private equity solution for family offices. Balaban is an adjunct professor at the University of Waterloo where he created a course titled Private Equity and Venture Capital. In addition, he teaches at Wilfrid Laurier University in the MBA/MFin program, where he lectures on investment management and corporate finance. Furthermore, Balaban is an active volunteer with CFA Society Toronto and a member of the Mentorship Committee and the Awards & University Relations Committee. He has recently been appointed to CFA Society Toronto’s Board of Directors.

How did you get into teaching?

I was mentoring the University of Waterloo team in the CFA Institute Research Challenge in 2013 and enjoyed it immensely. Through that experience, I connected with a number of professors and became more involved at the university. Around the same time, there was a need for a private equity course and I was asked to create it. I designed the Private Equity and Venture Capital course and started teaching in 2014.

What excites you most about this work?

Seeing my students flourish. Many of my ex-students now work on Bay Street and I’m extremely proud of that. It’s a great feeling knowing that I was a part of their journey to get to where they are today. And students always keep me on my toes. If I look at the last three years I’ve learned so much about the industry because students ask the toughest questions. They’re not shy about asking whatever they want to know. My job is to know it. The students are the ones who make this experience so different and rewarding.

You’re an advocate of simulating real-world problems in the classroom. How does this benefit students?

My philosophy—and the way I think about teaching—is that, as an educator, I’m here to create problem solvers. I’m not here purely as a content producer. Today, most of the content is available online, but it’s the experience in class that gets students to engage. Problem-based learning is a technique that teaches students how to solve problems they haven’t encountered before and with limited information. The idea is to simulate a real-life, on-the-job experience as much as possible. When faced with a problem, students are encouraged to think through what information they need to know, ask the probing questions, and apply the knowledge they’ve acquired through lectures, prior subjects, and co-op placements to come up with a solution. I try to simulate the real-world environment in terms of working in groups with different personalities, providing little notice, getting in front of people— being in as many situations as you would in a job that you possibly could simulate in a class. These activities push students out of their comfort zones. Students exposed to this type of learning are better prepared and more successful when they begin working in the industry.

In your opinion, what makes a great professor?

A professor who cares about his or her students— that’s the most important quality in an educator. To teach, you obviously need to have the technical expertise, but if you really care about your students, and their success, everything else falls into place. A challenge every professor deals with is how to get students to engage, to motivate them to want to learn. In my experience, when students know that a professor is looking out for their best interests and really cares about their success, they engage and participate. Another characteristic is a professor’s willingness to try new teaching approaches, always looking for innovative ways to create the best learning environment.

Going forward, how do you see post-secondary education evolving?

I see it being more interactive, being less lecture-based and more collaborative. Technology can’t be ignored; it’s a tool that’s really allowed for some great changes and progress in education. We’re already seeing more schools collaborating on the global scale and I believe this trend will only accelerate. Lecture halls around the world will be more connected. The world is getting smaller and smaller and I see a trend toward global education.

What advice do you have for a CFA Society Toronto member who is considering a transition into teaching?

First, try mentoring. I’m on CFA Society Toronto’s Mentorship Committee and the idea of mentoring is the same feeling you get when you’re working with and mentoring students.

Second, get in front of people and start speaking. I did a number of public speaking engagements before I became a lecturer. Reach out to your old professors. I was lucky enough to have a great mentor in William McNally. He was my professor and the first person I reached out to when I was first asked to teach. I don’t think I would have been able to transition into teaching without him.

Any last words of wisdom?

Always look for opportunities to expand your knowledge and experience. We should all be learning something new every day. Surround yourself with people who can teach you and whom you can learn from. Put yourself in situations that push you out of your comfort zone and expand on your experience. Learning should never stop. It’s a continual process.

Dr. Sean Cleary, CFA, is the BMO Professor of Finance at Smith School of Business at Queen’s University. Cleary holds a PhD in finance from the University of Toronto and an MBA from St. Mary’s University. He has published numerous research articles in various journals, including The Journal of Finance. He has also co-authored several finance and investment textbooks. Cleary is a former president of CFA Society Atlantic Canada and a former member of the Board of Directors for CFA Society Toronto. Currently, he is the director of the Toronto based MFin program at Smith School of Business.

What precipitated your decision to become a professor as opposed to working in the industry?

After I attained my MBA, I actually went into industry as a commercial lender with RBC. Somewhere along the way, I started teaching finance courses part-time at various universities. At that point, I realized how much I enjoyed teaching and decided to go back to do my PhD and become a full-time professor.

How did you find your PhD experience?

It was enlightening. I always had very good quant skills, which I developed in my undergraduate and MBA programs. However, when I started my PhD, it was a shocker because it turned out that I didn’t have very good quant skills relative to what was expected. It was very much an eye-opening experience. But I kept working at it and eventually found my way. I always enjoyed teaching, but what I didn’t foresee was how much I would enjoy doing research, too. Research is a big part of being a professor.

What are your research interests?

I do mainly empirical research in the areas of corporate finance. Specifically, I’m interested in exploring firm investment decisions, dividend policy, and corporate governance. More recently, I’ve been involved in M&A research. For instance, in our recent paper, we performed a comprehensive study of M&A activity during the 2007–2009 financial crisis. We found that the performance of mergers after the financial crisis was far superior from the acquirer’s point of view than in the comparable period before the crisis. A big reason for this finding is that the firms making these acquisitions post-crisis had fairly deep pockets. We also determined that these firms had more of a long-term focus than typical firms making acquisitions before the crisis. Also, we found that there wasn’t this pre-bid run-up and that acquirers were buying targets at better prices.

Why is this important? Because now we’re seeing another boom in the M&A market. We tend to see booms go along with good stock markets and easy credit. Now we have low interest rates and low-volatility, high-priced stock markets and some of these mergers may be motivated by hubris as opposed to the long-term fundamentals of the target companies.

What are some highlights of your career, and how did the CFA designation contribute to those highlights?

The CFA designation proved to be very useful when I was setting up the MFin program at Queen’s University, which is definitely one of the highlights of my career. It turned into a very successful program, which has now produced about 600 graduates in the past seven years. The CFA designation has been helpful in terms of constructing the curriculum. The CFA curriculum allowed us to determine which skills are required for a finance professional.

Also, the CFA designation allowed me to be involved in leadership roles with various CFA societies, which was very enjoyable. I met a lot of interesting people willing to give back and a lot of young people eager to learn and get involved.

What motivated you to establish the MFin program?

Queen’s already had a research-based M.Sc. in finance. We felt there was a need for a more practical MFin program. We decided to cater the program to professionals who were already working in the finance industry and intended to continue. With that in mind, we surveyed a cross-section of banks, pension funds, and insurance companies. This allowed us to determine what skills the employers were looking for. Based on this feedback, we set up the program in Toronto that emphasized what I call the “sweet spot”—theoretical rigour and practical applications hand in hand. It’s important for students to have strong communication and technical skills, as well as know how to apply them in the real world.

How do you prepare your students for success in the finance industry?

Most of our students already work in the industry and are trying to progress their careers. We focus on bridging the gap between strong technical skills and practical application. We also focus on improving their soft skills: communication and networking. These are critical for success. Therefore, we try to promote the soft skills and, at the same time, teach students the core technical skills. We offer a communication course that’s specific to communication within the field of finance. We believe networking is extremely important for career success and set up numerous opportunities for our students. One of the great things about our program is that, as a student, you’re in the program with 100 people who are working in the finance community. That certainly provides a head start in building a professional network.

What trends will have an impact on the finance profession?

It’s striking to me how pervasive behavioural finance has become. I believe it’s important to consider behavioural finance implications in today’s environment. It doesn’t necessarily negate modern portfolio theory. The two will have to learn how to live amicably beside each other. Twenty years ago, fundamental analysis was more pervasive and nobody really thought about the behavioural finance. Now it’s becoming more mainstream. If we dismiss behavioural finance, then we’ll miss a piece of the puzzle. I think investors are rational, but it’s important to account for some behavioural biases that they exhibit.

Do you have any advice for young professionals?

First, continue to build your relationships with clients, co-workers, and industry colleagues. Stay up to date and understand what’s going on in the industry. Remain technically relevant. Be aware of the general industry trends; they may not affect you now, but they may in the future. Be patient but deliberate. Don’t sit and wait for opportunities. Don’t expect that every line you throw in the water will get you a fish; if you’re putting in the right effort, results will come. Finally, enjoy the ride!

Maureen Stapleton, CFA, is an associate professor, Teaching Stream in Finance, at the Rotman School of Management at the University of Toronto, where she teaches finance courses in the undergraduate and MBA programs. Prior to joining Rotman in 2008, Stapleton worked in the investment industry for more than 25 years and gained extensive experience in institutional portfolio management. She is a former president of Women in Capital Markets and a past director of CFA Society Toronto.

What precipitated your decision to leave the finance industry and become a professor?

I started as an academic, but I was intrigued by the finance industry. I wanted to experience markets and work in the fast-paced environment. At the same time, I never lost the love of learning. Transitioning into academia was a natural progression of my career. I was very fortunate because I had the chance to experience both: working in the industry and teaching.

How does your experience in the business world help you in the classroom?

The knowledge, skills, and awareness I developed during my career on the street has a significant impact on the value I bring to students in the classroom. Finance theory is constantly evolving and I use current and relevant examples to connect theory with practice. Also, I begin every class with a brief five- to 10-minute discussion on what’s happening in the markets. It’s crucial for students to keep abreast of the markets and have an opinion on what’s going on. Reading CFA NewsBrief, Wall Street Breakfast, Bloomberg, and CNBC was how I started my day for the past 25 years—that habit hasn’t changed.

What are some highlights of your career, and how did the CFA designation contribute to those highlights?

The first highlight goes back to when I was transitioning from research to portfolio management. The only knowledge I had about asset allocation came from the CFA curriculum. I was going through a job change when I was studying for the CFA Level III exam. The curriculum was very relevant and helped me excel in the new role.

The CFA designation helped me get my current job. A CFA charter is evidence of knowledge, but also of ongoing commitment to learning. This is an important point I stress to my students. I generally advise students, who have already discovered their passion for finance, to start on the exams right away. That has two benefits. First, for undergraduate students seeking a position in finance, writing the CFA Level I exam signals commitment and increases the chances of being hired. Second, if you’re interested in pursuing an MBA, many programs don’t require the GMAT if you’ve passed the CFA Level III exam.

What can professionals do to excel in the highly competitive finance industry?

It’s important to focus on broad skills development. Continue building on the existing technical skills. Add both soft and hard skills to your arsenal. Also, be adaptable. The world is changing and opportunities appear and disappear all the time. When opportunities do present themselves, be prepared to step up.

Describe your teaching philosophy.

My goal is to provide students with the opportunities and incentives for experiential learning. I find real-world examples and link them to what they’re learning in terms of theory. This, in turn, feeds their excitement and makes them go further.

How do you prepare your students for success in the finance industry?

The process of preparing students for a career in finance extends well beyond the classroom. It includes engagement in activities that build their understanding of the industry as well as the required technical expertise. For example, in our undergraduate program, we have a portfolio management group. The maximum enrolment is 15. These students are mentored by alumni, all of whom have CFA designations and are working in the industry. The alumni inspire the students to work much harder than any faculty member could. The students have a 100 per cent success rate in terms of job placement.

What trends will have an impact on the finance profession?

There’s a movement away from publicly traded fixed income and equity in portfolios. Therefore, there is less demand for professionals who specialize in analyzing and picking publicly traded equity. I think there will be more requirement for people who have experience and expertise in areas like private equity and infrastructure. If we think of these asset classes as a pyramid— similar to Maslow’s hierarchy of needs—then alternative investments would be at the top. I think there will be fewer traditional equity research jobs.

As a former president of Women in Capital Markets, what challenges do women face in finance?

The reality is that there is a self-selection issue. Relatively few women decide to pursue this type of career. There’s certainly a demand for female candidates; however, women tend to perceive the industry as an intense, highly competitive, and frequently hostile environment. Some of that perception is real, but some of it is a myth. Women hear many stories, which discourage their participation, but a lot of those stories are vastly exaggerated or downright untrue. Women are self-eliminating based on anecdotal evidence. That said, a career in finance is not for everyone. It’s competitive and requires long hours. But, as far as long hours are concerned, there aren’t many nine-to-five jobs for professionals. Professionals in the areas of law, accounting, and medicine also work long hours. However, the participation of women in those professions is much higher compared to finance.

What advice do you have for young professionals entering the finance field?

Invest in yourself. Continue to develop your soft and hard skills. Understand that you’re going to work very hard for a while. Make intelligent choices. Do your research about the industry. Don’t assume you won’t fit or won’t succeed. In other words, don’t self-eliminate. Finally, be flexible and adaptable in order to take advantage of any opportunities that come your way.