Author Archives: CFAMNEB

Event Recap: “Strategies for Success: Thriving in the Finance Industry”

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By Nouchie Xiong, an MBA Candidate at the University of St. Thomas Opus College of Business, Class of 2019

On April 16, CFA Society Minnesota hosted a panel discussion with prominent women in the financial services industry. Abbot Downing’s Deputy Chief Investment Officer, Carol Schleif, CFA moderated the event as panelists shared their unique experiences, concerns over the industry’s lack of diversity and career advice to young professionals.

The panelists were:

  • Beth Lilly, CFA – President and Portfolio Manager, Crocus Hill Partners
  • Kate Kelly – Regional President & EVP at PNC Bank
  • Mary Daugherty, CFA – financial educator, consultant and corporate director

The event began with the panelists introducing themselves and providing a brief history about their career journey and family life. The conversation was followed by answering the questions: why is there limited diversity in the financial services industry? What happened? How do we move the needle to thrive?

Beth began with an explanation that the number of women in the industry and their participation declined around 2008. Furthermore, there is a misperception that women must be good at math to succeed in the field when in fact that isn’t always true. Beth confessed she wasn’t the best in math herself but loves and has a real passion for the industry. Citing Peter Lynch, she clarified that working in this industry is 75% artistic and 25% scientific. Professionals in the field draw on a variety of skill sets to inform their research and decision-making. Women are also intuitive and their different perspective can lead them to see things that male colleagues might miss. There is also the false perception that work-life balance is impossible due to long hours. The reality however is that not everything is dictated by investment banking hours. In fact, there is flexibility as long as you’ve proven yourself. The onus is on companies to allow for this flexibility to support women who want a family or to care for their aging parents.

Kate added that participation from women on corporate boards has also flattened. Women need to participate in these roles because having more representation can influence culture and shift organizational dynamics long-term to be more inclusive. Carol elaborated on Kelly’s point with supplemental data: women as board members contribute to 42% increase in sales, 66% increase in capital, and 53% increase in equity. Ultimately, women contribute to profitability and sound business practices.

Mary also shared three theories of her own. One, women and minorities don’t major in something that doesn’t make money or get them a job. They tend to go into accounting and some find out that it’s a poor fit. However, when they are trying to switch careers they come up against companies that tend to hire people who follow a more traditional path into finance. Companies need to think differently if they want quality talent. Two, the STEM fields have done a good job attracting talent at an early stage and parents love STEM too. As a result, these young women opt out by the time college rolls around. Finance needs to do a better job in attracting talent early. Three, the lack of women colleagues in the male-dominated industry allows for the “macho effect” pushing away potential candidates. There are so many battles that women in the industry must decide whether to take on, take offline, or not pursue at all. An environment like this is not conducive to promoting inclusivity or equality.

Following the Q&A, the event concluded with the panelists imparting lessons learned and career advice.

Carol started by telling everyone to be bold, be strident, and put a stake in the ground. Most importantly, try not to overthink and make sure to read The Confidence Code. Beth talked about how she wished she had spent more time emotionally to develop a stronger self-esteem and encouraged everyone to work on themselves. Everyone should believe that they deserve to be where they want to be. Kate inspired everyone to think about pursing infinite desire rather than perfectionism. Mary concluded that learning to admit mistakes is also important to becoming a better decision-maker.

UMD Shines on the Big Stage

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University of Minnesota Duluth seniors Ryan Woitalla, Reed Leonidas, Nawal Mirza, Frank Takkinen and Ryan Kimbrel earned an opportunity of a lifetime last month by winning one of the two sub-regions of the CFA Institute Research Challenge – Americas competition on March 19-20. The team, all members of UMD’s Financial Markets Program, are led by program director Joe Artim.

After winning the Upper Midwest local competition in Minneapolis in February, the UMD team advanced to the CFA Institute’s version of March Madness, which brought 54 teams and more than 250 students to Boston from countries such as Argentina, Brazil, Chile, Peru, Colombia, Mexico, Barbados, Dominican Republic, and Canada.

The Americas Regional clearly demonstrated to be a very challenging and demanding competition. Every team in Boston advanced out of local competitions collectively besting hundreds of other teams. In speaking with one of the finals judges, it was evident that the margin of victory between teams was very small. Additionally, a 10 minute presentation with 10 minute Q&A certainly leads to a lot of information to communicate and a lot of information for the judges to evaluate. A premium had to be placed favoring those teams that were clear in their recommendation while weaving together facts to support it.

March 20 seemed to be an anxiously long day for the five UMD students who presented their investment recommendation on their subject company Fastenal first in the morning semi-final session before advancing out of the five team pool to the evening finals round. By the time the finals took place that evening, the 54-team field was down to just five for each of the two sub-regions.

On the big stage with the bright lights, the UMD team shined not only in their extensive presentation but perhaps most importantly in the Q&A segment of their “buy” recommendation. My sense was that UMD prevailed not by focusing solely on the 10 minutes of prepared presentation but by spending six months truly grasping a deep knowledge of the company and conducting the proprietary research necessary to excel in the pivotal and unpredictable Q&A.

Faced with advanced questions on the company’s inventory turnover, product mix evolution and future in the face of a growing e-commerce threat, the team seemed to stay in stride. Further, questions on insider trading and short interest could have been easy to overlook or misinterpret.

They now head to Kuala Lumpur, Malaysia for the Global competition on April 27.  Just five teams will compete at this level: two from the Americas Regionals, two from the EMEA Regionals, and one from the Asia Pacific Regionals. It will be a couple more weeks of following the tick-by-tick of FAST for the five students who showed the drive, knowledge and teamwork to continue to break new ground for UMD.

 

Christopher Young, CFA is a Senior Investment Manager for Wells Fargo Wealth Management and a volunteer for our local Research Challenge competition. He traveled to Boston for last month’s Americas Regional and wrote this first-person account of UMD’s success.

Changing Perceptions Interview with Carol Schleif, CFA – Deputy Chief Investment Officer

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Carol Schleif is everything a role model for young professionals should be. With her dedication and go-getter attitude, Schleif has swiftly climbed the financial ladder to her current position as Deputy Chief Investment Officer at Abbot Downing; which was recognized as The Best National Private Asset Manager by Family Wealth Report Awards in 2016. But, where did her career in the financial industry start?

While studying equestrian science at William Woods University with hopes to become a horse trainer, Schleif decided to explore other options and found herself fascinated with her economics and marketing classes. In ‘83 she had graduated in an impressive three years with two degrees: one being equestrian science, the other being business administration.

She landed her first job as an Administrative Assistant with Edward D. Jones in Missouri. One of her more interesting duties for this position was clipping obituaries from local newspapers to prospect widows. “Not for me,” she decided. One thing Schleif did take away from this position was that when she had to make calls to the home office, she noticed, “The only people that ever knew what was going on were the folks in the research department.” So she decided to move home and pursue her interest in research departments.

Schleif then almost immediately started her next job at Piper Jaffray as a Market Strategist and started working on her Chartered Financial Analyst designation right away. After three years of industrious dedication, she distinguishably passed her CFA exams in ‘86.  When it was time to move on from her position at Piper in ‘87, she went on to work various positions such as Vice President and Research Analyst for First Trust, Director of Research at John G. Kinard & Co., and ultimately recruited by Lowry Hill, Abbot Downing’s predecessor, and has been there ever since. Schleif strived to incorporate her interests in economics, writing and strategy into her various positions. Along the way, she also stressed the importance of a well-developed research department and the respect it could bring to the company. It is clear to see that with each position, Schleif both learned more about the industry and contributed to the betterment of each company.

Where is Schleif currently at in her career and how was she been so successful?

Schleif currently holds the important position of Deputy Chief Investment Officer at Abbot Downing. Some of her duties include: creating and communicating the firm’s Asset Management Strategy, managing client relationships, and business development. On top of this, she serves on the firm’s Asset Allocation, Investment Themes, Investment Governance, Editorial and Publications Committees. She is a published writer and in 2016 was a Top Women in Finance Honoree. After having a conversation with her, it was obvious to see how much Schleif truly loves and is passionate about her job. She says, “I love my job. It’s a fascinating business and I feel fortunate to be able to do it here in the Midwest.”

In addition to her passion, her merit has contributed greatly to her success. She distinguishably graduated as Valedictorian of her high school class and Salutatorian of her college class. Schleif also stresses the importance of reading. Every day, she reads a variety of material such as Psychology Today, The Financial Journal, local papers, and New York Times. Schleif describes herself as a planner and goal setter. She explained, “Every year I try to look at what I’ve done and what has worked and what hasn’t. Then, I try to get better.” She even sets her computer password to a goal or aspiration she has, so every day she is reminded of it.

What has it been like to be a successful woman in the male-dominated financial industry, and what kind of advice does Schleif have for young women pursuing similar careers in investments?

Schleif sees a substantial benefit of being a woman in the world of investments. She says, “We bring a whole different level of analysis and emotional intelligence, skills and perception.” Nowadays, with more and more companies focusing on cognitive diversity, it is important to have women bringing their strengths into the investment field. However, Schleif believes a significant reason why more women are not pursuing these types of careers is because there is not a “cool depiction” in the media of women in financial positions. She points out that the only fun female role in “The Wolf of Wall Street” is Margot Robbie in a bubble bath.

While there is a substantial need for women in positions such as Wealth Managers, Asset Managers, and Advisors, they are not pursuing these careers. Schleif states, “The growth of women in the financial industry has been flat compared to other industries. We need to get the message out there that these really are viable careers.” She has been discussing with other women in the industry on how to get this message out and inspire women to consider these positions. As a grandmother to three granddaughters, Schleif strives to set the example that women really can be successful in this industry. Seeing the growth of women in the industry remain flat, and with her granddaughters as inspiration, she says, “I don’t dare retire until we move that needle a little further.”

What final advice does Schleif have for young professionals seeking jobs in the financial industry?

As a mentor with CFA Society Minnesota, and a member of the Board of Trustees at the College of Saint Benedict, Schleif is passionate about helping young professionals get started in their careers. She has a lot of hope and sees considerable potential in these younger generations.

One of her favorite quotes is, “Long days, short years.” While approaching 35 years in the industry, she explains this as the perception that some days can feel never-ending, especially when clipping obituaries from newspapers. However, 35 years, several positions, multiple publications, three children, and three grandchildren later, the time surely does seems to fly. So, as Schleif has modeled, do what you love and what you are good at, and don’t forget to enjoy it along the way. Success will follow, as it has clearly done for her.

 

Student Interviewer

Maria Vitale is a sophomore at the University of St. Thomas studying Economics and Political Science. She grew up in Stillwater, Minnesota and plans on pursuing careers in the financial industry upon graduating in 2020. Maria hopes to incorporate her passion for writing in any position that her career path may take her.

Changing Perceptions Interview with Diana Schutter, CFA – Retired

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Tell me a little about yourself.

After graduating from high school, I enrolled in a State college with a plan of studying music and theater. The following year, my education took a different course when I accepted an entry level position in the investment department at a public pension fund. I needed full time employment and this position offered tuition reimbursement for college courses in business and accounting. At the time, I didn’t know anything about investments and was uncertain if this was the right decision, but my boss was very encouraging and told me a business education could be very rewarding. Over the next eight years I attended the evening program at the Carlson School of Management, earning undergraduate and graduate degrees from Carlson School of Management. During that period I was promoted to assistant investment manager and that set the stage for what turned out to be a successful, forty-year career in investment management and investment consulting.

What sparked your interest in the investment industry and CFA Program?

I earned the CFA Charter in 1994. At that time I was the in-house investment manager for a legal publishing company, where I also held positions as Chair of the Investment Advisory Committee and Trustee for the company’s defined benefit plan. I was responsible for how the employee benefit funds and corporate assets were invested. Later, the company was bought out and my job was eliminated. A woman that I knew had just been recruited to develop and lead the investment advisory practice in an accounting firm. She asked if I would join her practice because some of the executives at my former company were interested in having an independent advisor. That’s how my career changed from investment management to investment consulting.

What was your experience with the CFA Charter?

I was previously a member of the of the Twin Cities Society of Financial Analysts and there were no requirements as long as you worked in the industry. Later, new members were required to pass the CFA Level 1 Exam. When I went into consulting and had to build a business, the CFA was very beneficial. At the time our consulting firm was started in the late 90’s, most institutional investors did not know what the CFA Charter was. However, following the tech bust when there was a big fallout in the capital markets, the CFA gained more recognition among institutional investors and became more respected and then again after the 2009 financial crisis. Therefore, in the field of investment consulting, the CFA credential was very beneficial to my career success.

Did you have a mentor or champion who was instrumental in your career?

The person who hired me for my first job. He was very encouraging and showed me that you can’t have a closed mind when thinking about potential career changes. He opened my eyes to numerous opportunities.  In my experience, his encouragement and willingness to hire and promote a female in the mid-1970’s was unusual.

What professional opportunities and challenges have you experienced?

My biggest challenge was that the ethics in this business is on average not good. With 23 years of experience where my role was to invest funds of the employer, I wasn’t trying to sell my services to clients and everything I did, I thought was the very best for my employer. When you are in the advisory business, there are so many things that constrain what you can offer a client for advice. Whether it is technology and resources you have, or that you decided to affiliate with another party, it influences your advice and you may not always be giving the best solution. That was the hardest thing for me. For my new business, I had three partners and we wanted to go into consulting in our own firm so that we wouldn’t be confined to that culture where it wasn’t always in the client’s best interests. Our dedication to that cause hurt us in terms of how much we could grow, but we did well enough.

What is your experience with starting your own business?

Our consulting firm was founded as part of a “spin out” of twelve clients from the accounting firm where my business partner and I worked to develop an investment advisory practice for two years. In 1998 our firm was started with two principals (including myself) and one associate. We invested $60,000 of our own money for working capital. Over the next 14 years our firm grew to 9 employees and 55 clients with aggregate assets of 3 billion.

What is the biggest risk you’ve taken in your career?

The biggest risk was starting my own firm and each year thereafter the potential risks increased as new clients were added, new employees hired and assets under advisement grew larger. As a registered investment advisory firm we were cast in a fiduciary position with respect to investment advice, which increases the costs for insurance protection.

What got you here; how have you been successful in investment management?

As explained earlier, I believe the combination of my work experience with internal funds management and education were contributing factors. The reason my second employer (where I worked for 12 years) hired me was my experience in internal-funds management. Today, most investment consultants who advise institutional investors don’t have that hands-on experience of performing securities analysis or initiating trades. Those work opportunities I think made me a better consultant.

18% of CFA Institute’s members are female, and 14% of CFA Society Minnesota members are female. Do you have any thoughts on why more women aren’t pursuing a career in investment management?

The numbers have changed, it’s surprising that the number entering the field is not proportional to the number rising through the positions and responsibilities. A career in the investment industry is taxing especially if you are a woman with a family and have other obligations. Some companies are trying to change their culture to allow for the flexibility needed for us to be able to succeed. There is also a huge amount of sexism, but CFA Institute and companies are working to improve that.

Do you have any advice for young professionals interested in a career similar to yours?

If you’re looking at positions within the investment management field, some of the larger foundations that have a staff managing their investments is a good place to start because then you are truly investing for the specific objectives of that client and not influenced like you would be if you are investing and representing a management firm. You can start in larger foundations to get a good understanding and background then branch out.

 

Student Interviewer

Lise Arakaza is an international student from Rwanda in her final year at Gustavus Adolphus College. She’s a Financial Economics major and Gender Women Studies minor with hopes of working in banking or an investment advisory firm.

Event Recap: “What’s next for Commodities”

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By Joseph G. Ogega, a student in Financial Mathematics at the University of Minnesota and CFA level I candidate.

On February 15 CFA Society Minnesota hosted a presentation by Robert P. Ryan, SVP of Commodity & Energy Strategy at BCA Research. Bob comes with more than 30 years of experience in options market and trading. Prior to joining BCA as an ME in 2014, he worked at New York Mercentile Exchange, as a Senior Economist and Director of Options Research, Commodity markets.

Bob discussed how some macroeconomic factors and policies in key global economies impact supply-demand dynamics in commodities’ market. According to him, OPEC producing countries led by Russia and Saudi Arabia will most certainly maintain their production levels for the remainder of the year. “The demand for crude oil and other refined products is expected to spring up or at least be steady in 2018 through 2019, as a result of significant growth rates registered in approx. 75% of countries monitored by the IMF,” he said.

Global supply of crude oil is expected to increase on average by 1.98mm b/d leading to 99.64mm b/d in 2018, hence U.S. shale-oil production rising by 1.15mm b/d leading global growth. Coincidentally, global demand is also expected to increase by 2mm b/d in 2019 from 100mm b/d in 2018.

“In 2019, global crude and liquids supply will average 102.22mm b/d (+2.58mm b/d), led again by surging U.S. shale-oil production (+1.39mm b/d). “ (view graph here, slide 4)

 

He also believes that the recent move by the Fed to raise interest rates will boost crude oil prices as a result of appreciation of the USD. (view graph here, slide 9) This effect will be felt more in the second half of 2018.

The rapid decline in Copper prices -between 2011 and 2017- is believed to be due to China registering slower growth over the same period. However, with a strengthened USD, Bob believes that the market will be able offset the supply shortfalls.

China, have since implemented monetary and environmental policy reforms aimed at encouraging importation of high-grade ores over low-grade ores. Though this has caused a depression on steel prices, China remains the biggest global consumer of iron ores. Australia and Brazil have also adopted similar domestic policies.

As a parting shot, Bob strongly believes that the Energy markets is going to boom in the foreseeable future (five to 10 years from now).

Ryan, R (2018). Commodity Revival At Risk [slides 4,9]. Retrieved from BCA Research.