It's not all in the mind

PUBLISHED : Saturday, 03 December, 2011, 12:00am
UPDATED : Saturday, 03 December, 2011, 12:00am


It's no secret: Working in the financial services sector can be lucrative, if not serve as the road to early retirement. As for landing a job in the industry, or climbing the corporate ladder once you do, two considerations continue to dominate the minds of hiring managers and job candidates - education and experience.

Clearly, the same can be said of many a profession. But with the rewards of success being as high as they are in finance - particularly so in Hong Kong - the majority of education programmes remain geared towards the city's many budding bankers and future fund managers.

But how much do such programmes really contribute to an individual's skill set and career prospects? A fair bit actually, according to Simon Davies, executive chairman at investment management firm Threadneedle Investments.

As far as analysing past data is concerned, a solid education is critical, especially when it comes to creating financial models, Davies says.

'In some ways, investment management is just a giant research project,' he explains. 'And if you've done this sort of thing at university and have been trained to do so, you're probably going to be better at it than others. This is where education favours you.'

Nevertheless, the seasoned financial executive expresses grave concerns about overly relying on book smarts.

'There is a worrying tendency in the investment industry to think purely about financial analysis - a notion that the numbers will always give you the answers,' Davies says. 'Ultimately, quantitative models always blow up. In fact, all models based purely on analysis of quantitative data usually only work until they get money under management - then they blow up.'

Another issue that Davies warns of is that of the growing 'obsession' with detail and spreadsheet models. 'People become so bogged down in the details that they don't actually think about what's going on in the company that they're analysing,' he says. 'That's something that experience will help you overcome.'

The investment manager does concede that experience also has its limits and, in some cases, may even be detrimental. As an example, he refers to some former colleagues of his who, after having worked through tough market conditions in the late '60s and early '70s, went on to become overly pessimistic through the '80s, causing them to miss out on key opportunities.

In terms of gaining experience, or, more specifically, learning from experience, Davies suggests reading up on financial history, noting that on-the-job encounters are no means of acquiring the judgment needed to make better decisions.

For Olly Arthey, a recent graduate of the University of Hong Kong's MBA programme, accruing first-hand experience was not an issue. Shortly after commencing his studies, he was hired for an equity-trading role at JP Morgan, making him one of the many who now pursue education and experience simultaneously.

Naturally, it was far from easy, he notes. 'Normally, the MBA takes about two years part-time. But once I joined JP [Morgan], I needed to focus on my job. As such, I extended it to four-and-a-half years,' Arthey says.

As for the career benefits of his new qualification, the maths major maintains that while it might have helped him gain a better understanding of accounting principles, he doesn't expect it to drastically benefit his career.

However, he does feel that having an MBA is likely to give him an edge when it comes to pursuing more senior roles down the road.

This view is echoed by Levina Poon, director of the banking, financial services and legal division at Hudson.

'Top-notch investment banks request MBA graduates for certain roles,' she says, noting that those eyeing middle management positions would do well having such qualifications. For junior titles, Poon stresses the importance of a relevant bachelor's degree from a good institution, adding that senior roles tend to be more about connections and experience.

When it comes to specialist education courses, such as the Chartered Financial Analyst (CFA) Program, Poon says that these tend to be more relevant to investment management rather than investment banking jobs.