In May of this year and with a revision-free Summer ahead, I was delighted to pass the final module of my Investment Advice Diploma qualification (IAD).
It was, no doubt, gratifying to see written confirmation of the qualification awarded. However, working in the trust industry and as a member of the Affinity Trust team, I had decided to undertake the course of study purely for a greater knowledge of the subject, which I still consider both fascinating and overwhelming at the same time. Fascinating due to the interchange between global issues, the economy and the investment arena; and overwhelming for the same reason.
I was hoping to achieve a better sense of the world and the way it works, which I had come to understand is dominated by global superpowers and corporations - from reading esteemed works of Noam Chomsky... and lesser substantiated posts on Facebook. As I was to accept, somewhere around chapter three of the first module, the IAD was not going to fill this void. Ever sceptical of the 'news', I still feel I might have a better idea about it all, looking back with some sense of perspective in fifty years’ time.
Alas! There were still almost three books, three exams, and a lot of learning to be done. Someone had paid for this! In fact, I had, and I wanted the pass-mark receipt for reimbursement.
Working at Affinity provides no better environment to develop a familiarity with the economics and markets. Surrounded by the hubbub of the investment team, I was hoping to absorb some of its essence, as if by osmosis. And so, with on tap advice from my investment colleagues, I turned my attention to the task at hand.
The knowledge I gained through the IAD was more specific than I had expected, however, it has provided me with some valuable insight and a better understanding more generally of the investment environment. A familiarity that brings with it a level of confidence in comprehending the jargon so prevalent when reading and assessing investment proposals, valuations and general market commentary and which is helpful day-to-day in the trust world.
Whilst I do not expect to be stock-picking anytime soon, I have a keener awareness of broader considerations such as financial objectives, portfolio allocation, risk profiling and underlying exposures: of trust assets held at the investment portfolio level, but also those held outside this neatly managed platform, which are often more difficult to measure and control.
On specifics, my new found knowledge on exotic derivatives will probably not be called upon in my day-to-day trust role, but derivatives really captured my interest and served as a well-received bit of fruit amidst the somewhat grey, prudent trustee world. The infinite possibilities of derivatives are fascinating, and also have some purpose in more sober and practical hedging strategies. Whilst I will most likely not be looking to construct a portfolio based on Himalayan or rainbow options, I am fortunate enough to administer a commodities trading structure, dealing in derivatives, which has helped bolster my investment vocabulary and provided a point of reference for my studies on the area.
In addition to the fundamental and more technical aspects of investments, there is a significant overlap with the trust world in terms of regulations, tax considerations and client/advisor relations, which brings a fresh awareness and mindfulness to these areas. As alluded to earlier, the investment arena also brings with it an enhanced consciousness, if not a full understanding, of current affairs impacting the investment world day-to-day; as opposed to the slower moving trust beast, which is directly subject to regulatory and tax-reform changes more periodically and (usually) with due warning.
Irrespective of the benefits outlined above of studying specifically for the IAD, learning outside a given subject and development across the board - both personally and professionally - I believe, is crucial in maintaining an astute, discerning and open mind, a mind-set that affords a greater perspective on life and a better-rounded individual. Although I wouldn't want any surgeon of mine adopting the same philosophy, I think there is some wisdom in Robert Heinlein's view that specialisation is for insects.
Bringing us full circle, and given that the investment world is shaped by local and global matters on every scale, it follows that a broader and more diverse education, in the loosest of definitions, should in turn bring about a greater understanding of investments.
To quote Benjamin Franklin, "an investment in knowledge pays the best interest".
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