Edition: Jun - Aug 2014
Race against time
Help is at hand from potential employers for black aspirant entrants to careers in asset management. Academia meets commerce.
Berry . . .talent pipeline
An enduring paradox of the SA democracy is that racial classifications and quotas are used to advance the constitutional aim of non-racialism. Thus do the means and the end sit in uneasy juxtaposition.
Employment equity and affirmative action apply throughout the economy, not least in the asset-management industry where debate on the progress of transformation can be heated. The way that the Association of Black Securities & Investment Professionals (ABSIP) fuels it lights up the areas for discussion (see previous article).
Clients of asset managers, notably retirement funds, are custodians of others people's money. Fund trustees have fiduciary duties that don't extend to asset managers being granted business allocations on the basis of being perceived as more acceptably "black" than rivals.
On the other hand, once black start-up firms are ready to compete, few trustees won't want to help with a leg-up. By the same token, however, it would be self-defeating to discriminate against larger established firms that apply the BEE criteria and implement the provisions of the Financial Sector Charter; without their efforts and resources, there'd be neither nurseries nor opportunities for blacks to rise in the mainstream of firms that dominate market share.
Somehow, a balance has to be found. The starting point must be in commonly-understood concepts and objectives accepted by the industry as a whole, specifically by ABSIP and the Association for Savings & Investment SA (ASISA). To be avoided are taints of rent-seeking and comparisons of apples with oranges.
For its part, ABSIP relies for measurement of transformation on the annual survey by 27four Investment Managers. But even the most thoroughly-researched statistics, being in the nature of statistics, can be faulted.
At the April 'summit' of ABSIP, ASISA chief executive Leon Campher took issue with certain survey findings. A fundamental flaw, he argued, was in the universe of fund managers sampled. This distorted the picture of the industry's progress in transformation. Campher promised the assistance of ASISA in compilation of future surveys.
That should help to counter, or at least allay, the allegation that the big guys aren't doing "enough" to encourage the entry of blacks into asset management; particularly in the recruitment and training of youngsters who show interest and promise to climb the operational ladder, and to gain the work exposure that will equip them for investment decision-maker roles in the larger established firms.
At one level, up for critical assessment is what these respective firms are doing internally. That's a separate exercise, separately monitored. At another level is what they're doing as an industry.
In this latter category, worthy of recognition are programmes of the ASISA Academy. Take, for example, its course in investment management administration and client servicing (IMACS) run in partnership with the Tertiary School in Business Administration (TSiBA), a privately-funded university.
Course content is comprehensive, from understanding the financial markets' structure to trading processes and portfolio pricing as well as the use of such instruments as derivatives. Investment philosophies and styles, corporate actions and governance regulations, aren't neglected either.
To ensure a supportive learning environment, class sizes are limited to 14 students per course.
2011-12 course: 10 students
Black African women: 3
2012-13 course: 10 students
Black African women: 1
2013-14 course: 13 students
Black African women: 2
For the 2014-15 intake there are already record numbers of sponsors and student applications.
Designed by the industry to dovetail with employers' needs, the face-to-face programme is delivered by more than 40 industry-expert practitioners who encourage interactivity. It's intended to identify recruits and make them ready for work. Students who complete the full IMACS programme – as an elective over the final 18 months' study for their Bachelor in Business Science degree – are then placed in internships with participating employers.
A core part of the Academy strategy is to partner with universities in providing specialized learning and employment opportunities for students considering a career in financial services, Academy principal Terence Berry points out. TsiBA was the Academy's first partner.
"TSiBA is providing an incredible talent pipeline for the ASISA members who sponsor individual students' participation on this IMACS@TSiBA programme," Berry adds. The success of the programme, he believes, can be boiled down to getting undergraduates as work-ready as possible and to coordinate this with meaningful internships: "It's no surprise that more than 90% of the programme graduates have found permanent employment within the industry."
Check this from the numbers (see box). They represent the profiles of those who've completed the course and been placed with sponsoring asset managers.