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Margaret Franklin is the new chair of the worldwide Chartered Financial Analysts organization and President and CEO of Kinsale Private Wealth. (Sarah Dea/Sarah Dea/The Globe and Mail)
Margaret Franklin is the new chair of the worldwide Chartered Financial Analysts organization and President and CEO of Kinsale Private Wealth. (Sarah Dea/Sarah Dea/The Globe and Mail)

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The CFA chase: A cornerstone of trust, and no shortcuts Add to ...

They are just three little initials, but the CFA is the hot ticket among the world's striving young finance professionals. In fact, almost 60 per cent of the 112,000 candidates who wrote Chartered Financial Analyst exams in June failed in their efforts, and yet they keep coming back. What's the method behind their masochism? Margaret Franklin knows, because it's played a huge role in making her career. So now the 45-year-old wealth manager is giving back, as the new chair of the CFA Institute which runs the global education program and its three-stage exam process. Add the responsibilities of being president of a new wealth-management boutique, Kinsale Private Wealth Inc., and you have the portrait of a woman at a career inflection point.

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As a student, were you a whiz at math?

No, I wasn't because it wasn't relevant when I was at school. I didn't understand what it all meant. I didn't start out in this business. I landed in it accidentally.

How?

I was working for an outdoor media company as a marketing analyst. I was going no place. The HR person said 'there is nothing here for you to do, but there is a job over at State Street Global Advisors. I know the HR gal and I said you would be really good for it.'

I took the job and I loved it. I didn't really know the difference between a stock and a bond when I started. I wrote my Canadian Securities Course, and then I really needed and desperately wanted technical expertise and began my CFA.

Now, 20 years on, you are president of your own money-management firm. Is it a difficult shift to running your own shop?

No, it is far more consistent with how I like to operate. You get to 20 years' experience, you go through the 2007-2009 period, and you come out with ideas that become very crystallized in what you think is important, what it all means, and how to execute on that for the rest of your career.

How do you want to run this company?

I don't really see much disconnect between the CFA Institute platforms and how it trickles down into practice. The whole thing is based on the cornerstone of trust. We don't sell a widget. We are navigating families through the uncertainty of investing. As soon as you know you can't deliver a very precise outcome, you help manage through the possible scenarios and how to deal with them. Rather than selling them some vision, you are educating them on a process.

What happened to that process in the financial crash?

Before 2008, people talked a lot about risk but they didn't properly position themselves. A lot of people get caught in the daily part of the business where you are being measured in such short time frames against benchmarks which were never designed for portfolios.

Juxtapose that with a private-client, long-term capital preservation focus. In many cases the portfolio wasn't matched to those objectives or clients weren't told, 'We really have to worry about capital preservation.' It's not just that people lost money in '08 - it's the magnitude of the loss. And the result is psychological - they got out of the market and they missed all of the upside and so it's a double whammy. That is devastating.

What is the role of the CFA when so many people are skeptical of the financial industry?

It is not a guarantee of [personal]values, just like you can't teach character in a university course. But it is the gold standard because it is a very rigorous training. This is a money business, so the end is about making money. You are so measured in dollars. So starting people on their career journey thinking about ethics is something you hope will make a difference. I don't think you can guarantee it, but it is firmly based in the program.

When young people ask if they should pursue an MBA or a CFA, what do you say?

It's like the difference between a science degree and a medical degree. An MBA is a really broad program and the CFA is specifically about investment. The concentration of time, effort and energy into a very defined activity allows much more breadth and depth in that one area.

If you're going to be a professional in the investment business, you de facto have to have the CFA now. I would question a student who isn't pursuing it because the CFA demonstrates a level of commitment and professionalism.

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