The UK is home to the largest asset management sector in Europe and the second largest in the world. According to research from management consultancy Oliver Wyman, British asset managers have a total of £8.1tn of assets under management invested for clients around the world, and, importantly, they generate £5bn–£7bn in tax revenue annually. That’s around 1% of the UK’s Gross Domestic Product.
How does the UK government intend to support the UK asset management sector? In December 2017, HM Treasury published
UK Investment Management Strategy II (
IMS II), outlining a government commitment to support the development of a “talent pipeline” for the UK asset management sector.
There are two main educational components: promoting apprenticeships and establishing new “asset management centres of excellence”. The former ties back to the government’s policy set out in
Apprenticeship funding: apprenticeship funding in England from May 2017, published in October 2016.
The latter is considered necessary because, according to
IMS II, the asset management sector’s resources are “spread thinly across many institutions and initiatives,” so it aims to “consolidate the majority of existing research spend and concentrate it in a more focused way, [such that] the sector will be able to benefit from economies of scale and have a greater impact on skills.”
How will IMS II attract people to join apprenticeship schemes? The measures to be taken are quite specific: “Firms that hire apprentices will need to provide full-time paid employment to the apprentice, as well as purchase apprenticeship training, approved by the Institute for Apprenticeships, to form at least one day a week’s training. This training could also allow apprentices to gain a full bachelor’s or master’s degree.” It adds: “The government has simplified the way that apprenticeship training is funded in England, and given employers more control over designing, choosing and paying for apprenticeship training.”
How can the CISI help? One of the challenges in training investment management staff is the wide range of skills that are applied across the sector, which encompasses expertise in accounting, reporting, legal and compliance, through to understanding markets and particular asset classes, to customer relations and marketing. Developing this huge diversity of capabilities requires the asset management sector to draw in training skills from a wide range of outside firms and practitioners.
The CISI partners with universities to bridge the gap between academia and the workplace by enabling students to achieve professional qualifications alongside their degree programme. It is currently working with 23 universities across the UK (some of the bigger ones being University College London, Newcastle University and ICMA Centre, University of Reading) to help students achieve a competitive edge within the asset management sector and other financial services specialisms.
Additionally, the CISI provides training in its globally recognised qualifications through its roster of Accredited Training Partners (ATPs) that deliver training to many centres around the world, delivered face-to-face or via distance learning.
The Investment Association (IA) provides a selection of short courses across a large range of disciplines, as do other professional bodies, such as accountancy organisations that address skills requirements.
How can the government help drive centres of excellence to have a practical impact? It should pay attention to what drives companies to invest in training. In a heavily regulated sector such as financial services, compulsion is a significant factor. Unless the FCA imposes new, or higher, requirements on investment firms relating to training of staff, and the new centres can help firms to meet those requirements, it seems unlikely that they will have much of an impact on the existing training landscape.
What is the Asset Management Taskforce component of IMS II? It comprises senior representatives of firms such as Janus Henderson, Jupiter Asset Management, M&G Investments and Vanguard, and is chaired by the Economic Secretary to the Treasury and City Minister, John Glen MP. The IA is a member, as is the Treasury’s director of financial services. The taskforce, which will meet quarterly, is expected to oversee the delivery of IMS II’s main objectives.
The Treasury says that the centres of excellence will be developed in conjunction with the IA over the next few years. It urges universities and other organisations that are interested in getting involved to approach the IA directly.
The original version of this article was first published in the Q2 2018 print edition of The Review. The print edition is available to all members who opt in to receive it, except student members. All eligible members who would like to receive future editions in the post should log in to MyCISI, click on My Account/Communications and set their preference to 'Yes'.
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