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Articles

Sales Pros Seeking CFAs for Edge

Article published on September 4, 2009
By Jay Cooper

The number of sales, marketing and client relations professionals seeking their chartered financial analyst (CFA) designation has more than doubled in the past two years. The surge in CFA candidates comes as more asset managers look to add new members to their sales teams who can take a more consultative and "solutions-based" approach to working with institutional clients, recruiters say.

According to figures from the CFA Institute, 389 CFA candidates preparing for exams taken in June checked "marketing manager" as their profession when registering for the exam. Only 293 candidates fit that category in June 2008, and only 185 in June 2007.

The number of candidates in client relations positions is also increasing, with 5,249 candidates selecting "relationship manager" as their profession this year. That number is up from 4,022 candidates in June 2008 and 2,496 the year before.

The CFA designation is regarded by many as the most rigorous certification process in the investment management industry. Candidates must pass three levels of exams, and each exam typically requires most professionals to prepare for months in advance. Only 45% of those taking CFA exams last June passed their respective exams.

The bulk of professionals pursuing a CFA remains in more investment-heavy positions, but a growing number of those taking the exam work in sales and marketing or client relations positions for asset management firms.

Roughly two-thirds of asset managers seeking to hire someone in a sales or marketing position now require that candidate to have either an MBA or CFA, estimates Cornelia Kiley, a managing director at Russell Reynolds Associates who does senior-level searches for distribution professionals.

Kiley is currently conducting a search for a senior v.p. of client service and sales at a mid-sized value equity shop that requires either an MBA or CFA of all candidates. She is also conducting a search for a distribution professional at one of the largest bond managers that has the same requirement.

"It's driven by the kind of conversations that managers like to have with their clients," Kiley says. Plan sponsors and other institutional investors are looking to managers more for advice than in the past.

Instead of looking for a manager to pitch a product that fits in a specific style box, institutional investors are now looking to the manager and consultant to help come up with solutions unique to that client's own situation. "Their first line to the firm is the sales and marketing person. They have to have the intellectual ability" to have those conversations, Kiley says.

Other recruiters agree. "If you have a CFA, clients may be willing to spend more time with you on a consultative basis, instead of just listening to you pitch your product," says Chris Seitz, an associate principal at Heidrick and Struggles.

He notes that while the number of firms using a CFA designation as a filter for selecting sales professionals is increasing, it is not a requirement throughout the entire industry yet. "It's still becoming more important as a differentiator¡­much like the MBA was in the past," he says.

Russell Reynolds' Kiley adds that another reason managers are seeking sales professionals with a CFA is because the designation indicates they have the sophistication to help provide ideas for future product development. Managers are depending on their sales professionals to listen to clients and come back and tell them the newest needs clients have, so the manager can create products that will be a good fit. "That feedback loop can only be successful if you've got really smart feedback points," she says.