Sporting the right letters after your name is fast becoming essential for any ambitious young investment manager, says Fiona Rintoul, but whose letters?

There was a time when a Bachelors degree in Mediaeval History and a few well-placed chums in the financial world were enough to launch a career in asset management. But those days are well and truly over. Today, in an industry that is under increasing pressure to perform - and to perform ethically and transparently - demonstrable professionalism is the name of the game.

Although a formal qualification is not mandatory for asset managers and analysts, it's increasingly becoming standard practice. Of course, there are plenty of people working in asset management who don't have letters after their name, but they are usually what one training provider calls "older chaps".

A company such as Fortis Investments displays a typical progression. Human resources director, Phil Smith, says that, although there are people working within Fortis who have no formal qualifications, they are all older. For younger people, a formal qualification started out as merely desirable but is now becoming obligatory.

"We have said that any investment professional in the firm will be supported financially to get the CFA [chartered financial analyst] qualification," Smith says. "The new intake must take the CFA."

Fortis's choice of the US-originated CFA qualification is new. Two years ago, the company looked at the whole area of training and qualification and put together an internal programme, taking the CFA as its chosen programme.

"There was a range of local qualifications that the firm supported in the past," Smith says. "The compelling reason for us to put a cap on local programmes and focus on the CFA was the global nature of fund management."

For Smith, the choice was "very clear and easy". The Fortis teams have to have credibility with clients globally, and he felt that the CFA, with its origins in the world's largest market, had the requisite "power and strength". Another perceived advantage of the CFA is that it is acknowledged in Asia.

Global relevance

As the industry internationalises, and companies seek a qualification with global relevance, Smith is certainly not alone in seeing the CFA as the natural choice. Some see it as the only choice.

"There's only one game in town," says Professor Andrew Clare, from the Faculty of Finance at Cass Business School in London.
"The CFA is standard in the US - the largest and most important market in the world - and so much finance comes from the US. So, by default, the CFA is seen as the qualification to have by young, thrusting, upwardly mobile investment managers."

But the CFA is not the only game in town. Four years ago, the Association of Certified International Investment Analysts (ACIIA) was founded. The ACIIA is a partnership of 25 national and regional associations and it offers its own qualification - Certified International Investment Analyst (CIIA).

Alternative investment

There is also the Chartered Alternative Investment Analyst (CAIA) designation, which aims to provide a global professional standard for the alternative investment industry. The CAIA started in the US, but is gaining ground in Europe. The French business school Edhec offers preparatory courses on an exclusive basis through Edhec Alternative Investment Education.

This year there were 680 candidates for the CAIA. Frédéric Ducoulombier of Edhec Al Education says it is likely that next year's total will be double that for whole of 2004. He also notes that some alternative investment managers, for example Paamco, have made the CAIA compulsory for their investment professionals.