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Investment management creating value for clients and wider society

Value of the Investment Profession

CFA UK undertook a report, called Value of the Investment Profession, to capture our stakeholders’ views of the investment profession’s role, its effectiveness and value. It is intended to open a discussion that will form the basis of our advocacy work over the next few years.

Our members perform an important social function, but it is one that is not well understood as the report demonstrates. It is also one that is widely criticised. Some of the criticisms directed at the profession are a consequence of our failure to explain ourselves; others are more fundamental and should be addressed.

Natalie WinterFrost, CFA

Working for change

Natalie WinterFrost, CFA, explains how CFA UK is working to improve the value that the investment profession delivers to its clients, stakeholders and wider society.
Find out more Read our full report

How can we deliver value?

CFA UK met and interviewed almost 200 key individuals and teams at 100 investment firms, consulting firms, clients and companies. We also talked to representatives in the other stakeholder universe, such as academics, policy-makers and client representative groups. Our report reflects the aggregated views that we have heard. Our intention has been to provide a clear, simple explanation of the value that the profession provides, how that value can be enhanced and the role that professionalism plays.

  • What is the value of the investment profession?
  • How can it be evidenced?
  • What inhibits our ability to generate or deliver value?
  • How should we address these obstacles?
You can download and read the findings of the report here.
Read articles here.

Areas of focus

Capital allocation

The investment profession provides new capital through primary markets. This new capital may take the form of debt or equity and may be issued publicly or privately. In addition, investment professionals participate in the secondary market as buyers or sellers of existing securities and, in doing so, set the prices for those securities.

Once capital has been provided, investment professionals act as its stewards on behalf of their clients to ensure efficient allocation to those locations where it can properly and most productively be applied. In primary markets, borrowers (companies and countries) compete to attract capital based on investors’ perceptions of the balance of future risk and reward.

Investment professionals believe that they provide an important role in capital allocation by assessing the appropriate cost at which to provide capital by undertaking in-depth financial analysis. Their analysis incorporates the company or sovereign credit’s financial information, its operating environment and its governance. Stakeholders also note that investment professionals’ reliance on accurate, relevant, consistent data has led them to contribute to the improvement in the quality of the data provided to the market over time.

Read more in our report.

Find out more about capital allocation.

Clients' needs

The investment profession has a wide range of direct clients and an even broader range of ultimate beneficiaries.

In the institutional world, investment professionals work for pension schemes, insurance companies, charities, endowments and foundations. While a pension scheme, represented by its trustees, may be the direct client, the work the profession performs will impact that scheme’s own members and affect their financial outcomes.

The profession’s work also has a broader impact. Where pension schemes’ investment returns are improved, the need for corporate contributions is reduced, freeing up capital for investment elsewhere. Further, by helping private companies meet their pension obligations, the investment profession reduces the ultimate reliance on tax-funded public entities. Similarly, the profession can positively affect a charity’s ability to fund its activities or an insurance company’s ability to pay claims and maintain premia at a relatively low level.

Read more in our report.

Find out more about clients’ needs.


Clear, simple explanations are not easy to provide without running the risk of misrepresenting the potential outcome for clients, but the need for clear communication will only grow.

The industry must look at ways that communication can better explain the value that the
profession provides in order to enhance the client relationship.

Read more in our report.

Find out more about communication.

Costs and competition

Competition contributes to value generation. In theory, rivalry in a market, the threat of new entrants
or product substitution, supplier power and buyer power combine to encourage innovation and price
competition and will influence the degree of concentration in a market.

People need to be able to compare performance, but it is very difficult to standardise risk usefully and explaining risk-adjusted returns to clients is difficult. We need transparency and competition around standardised reporting approaches.

Read more in our report.

Find out more about costs and competition.

Promoting ethical standards