Is improved training and a specific funds qualification the solution to a skills shortage in the funds industry in the Channel Islands?
Despite the fact that we’re living in an age of Brexit tension and uncertainty, it seems that the funds sector in the Channel Islands is keeping calm and carrying on.
In Jersey, according to the latest figures from the Jersey Financial Services Commission, the value of regulated funds being administered reached a record £296bn at the end of June 2018.
In Guernsey, meanwhile, net asset values of funds under management had increased 5.2 per cent to £276bn by that point in the year, according to the Guernsey Investment Funds Association.
A jump in private equity and alternative asset class business, as well as a belief that the islands offer relative certainty in a volatile Brexit climate, have helped.
Yet despite this positive picture, not everything in the garden is rosy. The global funds and asset management industry is facing the struggle of a skills shortage.
PwC’s recent survey of global CEOs in the asset and wealth management sector found that 71 per cent were ‘extremely concerned’ about the lack of digital skills in their industry. Back in 2016, more specifically, 72 per cent of global fund bosses said they were concerned about the availability of key skills in their businesses.
Despite its current successes, the Channel Islands’ funds sector is also suffering from a lack of skills. The States of Jersey’s Employer Survey 2017 found that 27 per cent of employers were planning to grow their business over the next three to five years, but that ‘accessing the relevant know-how and skills’ was the main barrier.
“There’s an issue with skills in all sectors on the Channel Islands,” says Michelle Morley, Head of Programmes at the GTA University Centre in Guernsey. “That’s because there isn’t much unemployment here, nor is there a huge pool of people to pick from to do all the jobs.
“It’s an issue that’s being seen across the funds industry, particularly administration. I’ve spoken to employers in the sector and they tell me that there’s a need for more skills development.”
Will Morgan, Managing Director of Guernsey-based firm Offshore, agrees there is a problem, but he believes funds firms are partly victims of their own success. “Because the funds industry is developing so fast, businesses are really stretched. Senior staff are working long hours and don’t have the time to take on or train junior workers,” he says.
“Fund businesses are most likely to look for people who have company secretary or accounting qualifications to fill fund administration roles. They believe these are transferable skills, but they aren’t necessarily right for the funds sector.”
It’s certainly not an issue of failing to find people with the necessary qualifications. As Michael Johnson, Head of Funds for the Channel Islands at Intertrust, and a committee member of the Jersey Funds Association (JFA), explains, no vocational qualifications are needed to enter the fund administration profession.
Right type of training
“Perhaps employers will look at whether you have an accountancy qualification and/or prior experience by asset class,” he says. “There’s a gap in the fund administration sector, with very little specific training in the intricacies of the job. There’s plenty of general training in areas such as accounting, which fund administrators can go to, but they’re always left asking: ‘What does this all mean for the funds I look after?’.”
Johnson sees issues around the need to develop more specialist skills as funds work becomes increasingly automated. “The regulatory and technological world is advancing and there’s very limited specialist training,” he says.
The JFA is trying to meet that demand by ramping up training provision through a series of CPD funds masterclasses. These half-day courses include one on the risks and regulatory challenges facing the Jersey fund sector, for example.
“We’ve responded to the demands of our membership, who want us to fill in the funds training gap,” Johnson explains. “We’ll help develop more specialised employees in funds administration with more sophisticated knowledge, experience and abilities. Funds has become the biggest part of our finance sector and is expected to keep growing at a fast pace. Some of the other financial industries have strong headwinds, so we need to step up our skillsets and get prepared.”
With regard to other training opportunities, the GTA runs workshops including refresher courses in fund administration and property funds. And on the mainland, ICSA, the UK-based Governance Institute, offers a Certificate in Funds Administration course, which looks at areas such as the relationship between net asset value and fund performance, and different fund structures.
In 2015, Paul Smith, Vice Chair of the Guernsey Investment Fund Association, called for a similar qualification on the islands. “There’s currently no qualification specifically for people coming into the fund administration sector that’s directly relevant to what they do.
“I feel it’s important to provide such a qualification from an internationally recognised provider that’s also relevant to the Guernsey fund environment,” Smith commented at the time.
Staying the course
Stepping into that space three years on is a new global Certificate in Fund Administration qualification, from Birmingham-based training group CLT International. The organisation also provides access to specialist ‘bolt-on’ jurisdictional modules – including for the Channel Islands – which analyse the regulatory landscape in specific centres.
The course looks at fund structures and strategies, accounting and valuation, taxation and regulation for those who work in fund administration or support.
“What we’ve seen over recent years is a growing industry experiencing significant change as a result of increased regulatory pressure, and other economical and societal factors,” says Bill Howarth, Group Managing Director at CLT International.
“The roles and competencies of those entering or already operating in the funds and fund administration industry have changed significantly for those performing back-office functions and administrative duties. There are limited qualifications or training programmes available to fulfil those training needs.”
Will Morgan at Offshore has helped write the new syllabus focusing on the specialist Channel Islands modules. “We hope the course is relevant for people on the islands looking at our regulations and laws. Other qualifications have been too general,” he says.
“We’ve worked with industry players and funds companies and they really see the need for this. That’s where the demand for change has come from. They want to see a funds qualification for new entrants and career changers, and for existing staff who want to fill in knowledge gaps.”
Michelle Morley of the GTA will help deliver the new CLT qualification in Guernsey. “There’s a real appetite for this among employers. It’s for new starters, but also for people looking to change career, so that when they go for a job they will have a qualification to show an employer,” she says. “The course will be specific to Guernsey or Jersey candidates and focused on issues that matter here.”
Morley believes in-house training by employers is also important if the industry is going to ‘professionalise’ further. “Other sectors have their STEP qualification, such as in international compliance and anti-money laundering or international trust management, which provide pathways for people into work,” she says.
“Employees need to be able to work towards a qualification and be supported in that journey by their employers. If a company has sufficient employees, then outside or internal qualifications can take place in-house. This, especially if the training is focused on the legal and regulatory concerns here on the islands, will help the skills shortages problem.”