Practical analysis for investment professionals
12 October 2017

Four Lessons from the CFA Society New York 80th Anniversary Dinner

Much has changed since 1937, when a small group of security analysts first met for lunch in a private dining room of the New York Chamber of Commerce, but the integral role the CFA Society New York has played in the ongoing evolution of the investment industry has remained constant.

It was from that humble luncheon that CFA Society New York was born. And among its founding members was none other than Benjamin Graham, the “father of securities analysts.”

At its 80th Anniversary dinner last week, CFA Institute’s largest society celebrated its storied past, but also looked to the future, with speakers offering their insights on where the markets and the profession are heading in both the near and far term.

In his address, CFA Institute president and CEO Paul Smith, CFA, noted just a few of the Society’s numerous and critical contributions to finance: CFA Society New York developed and enforced the first professional code of ethics for the investment industry, published the inaugural issue of the CFA Institute Financial Analysts Journal®, created the CFA Institute Research Challenge for finance students across the globe, and founded the organization we now know as CFA Institute.

The dinner also recognized the individual contributions of Society members, with Roger W. Ferguson, Jr., president and CEO of TIAA, receiving the Irving Kahn Lifetime Achievement Award; and Bruce Richards, chairman and CEO of Marathon Asset Management, and his wife, the filmmaker and philanthropist Avis Richards, earning the inaugural Humanitarian Award.

So what were key takeaways from the evening? I distilled four lessons from the speakers about the economy and the future of finance that are worth remembering.

1. “The economy is moving forward.”

This was the highlight from Richards’s keynote. He said 2017 has been a good year for growth worldwide. In fact, all 35 member countries of the OECD are expanding for the first time since 2007. While another recession is inevitable, Richards doesn’t anticipate one in the next couple of years.

Lee Spelman, CFA, managing director and head of US equity client portfolio managers at J.P. Morgan, echoed this sentiment. Earnings are strong and expected to be in the double digits both this year and next, she said. “The market is in synchronized growth.”

Richards thinks former US Federal Reserve chair Ben Bernanke and central bankers around the world are responsible for the current economic conditions.

2. Despite current economic growth, there is reason for caution.

The speakers also focused on the factors that could influence the markets, among them low volatility; inflation; elections in the United States, China, and elsewhere; quantitative easing (QE); and fiscal policy changes

The Trump administration’s tax reform initiative may be critical, according to Jeffrey Rosenberg, CFA, managing director at BlackRock Investment Institute,

“If it’s done well, it could be additive to a number of companies in a number of sectors,” he said. Nevertheless, he expressed concern about the potential for policy error.

Given all these factors, the related uncertainty could endure for a while, even with robust economic expansion.

“I don’t see investor euphoria,” Spelman said.

3. Traditional analysts still bring great value.

In today’s era of machine learning, artificial intelligence (AI), and other technological disruptions, Spelman said she often fields questions about the future of financial analysis and whether traditional analysts may become obsolete. But she isn’t worried.

Traditional analysis and the CFA charter are more relevant today than ever before, she said, because the skills they impart, particularly the ethical component, are vital to the future of the industry.

While firms today are hiring atypical candidates, “There will be different times for quantitative versus fundamental,” Spelman said.

Rosenberg agreed. “There’s a value to new tools,” he said, but fundamental and quantitative analysis can co-exist. What distinguishes them are the ethics, behavioral nuances, and training in standards.

4. We must all be learners.

With so many factors affecting the investment industry, how can we best serve our clients? By feeding our curiosity, learning more, and evolving our thinking.

“We’ve all been forced to turn ourselves into learners,” Rosenberg said.

That sentiment was what resonated the most with me. Adapting to rapidly changing conditions, client preferences, and new trends will be crucial for the industry in the coming years.

In fact, the “Future State of the Investment Profession” study found that over the next five years there will be a growing need for new skills and ethics and professionalism training, as well as new-era leaders who can articulate a compelling vision for their firms.

Ultimately, the core of our profession’s success will be continuing education.

That will not only contribute to a healthy investment industry but will help ensure that on its 160th anniversary, CFA Society New York will have much more to celebrate.

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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.

Image courtesy of CFA Society New York

About the Author(s)
Bjorn Forfang

Bjorn Forfang is deputy CEO, CFA Institute, where he oversees the Member Value, Advocacy, Services Delivery, Research, and Relationship Management functions, as well as our regional capabilities in APAC, EMEA and the Americas. Forfang has more than 20 years of client and relationship management experience, including 14 years as managing director at UBS Investment Bank where he held global relationship management roles in New York and London, and managed and worked with some of the financial industry’s largest institutional clients. Prior to UBS, he held senior-level roles at Dresdner Kleinwort Wasserstein, and Greenwich Associates. Forfang started his financial career in fixed income sales at J.P. Morgan Securities, Inc. Early in his career, he was a senior legal officer with the Royal Norwegian Ministry of Foreign Affairs in Oslo and later relocated to New York as Deputy Trade Commissioner of Norway to the United States and Vice Consul to New York. Forfang holds an MBA from Harvard Business School and a JD from the University of Oslo. He is a Norwegian citizen and a permanent US resident.

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