Rethinking the future of Finance

brouwer

Tell anyone at a dinner party that you work in Finance and you might expect to be frowned upon. That was even worse around 2009 when the credit crisis raged on: bankers were said to be taking off their suits whilst travelling on the London tube. There were Occupy Movement tents on the Beursplein, a Libor scandal, a Wolf of Wall Street movie, massive fines for financial institutions, and an avalanch of politically motivated regulations.

Hilko de Brouwer graduated from Maastricht University School of Business and Economics in 1996 with faculty mentor Fred Nieuwland. After sharpening his sponsorship acquisition skills at SV Circumflex, Hilko moved into the six-month dealingroom class of 1997 at ABN AMRO Global Markets. Then he was moved to Frankfurt-am-Main in Germany to work in the local “handelsraum” as Treasury Sales Trader covering Foreign Currency transactions. The introduction of the Euro changed the whole European financial sector overnight: trading, investing and loan activities moved into regional centres rapidly. Hence, a move back to Amsterdam resulted in a new focus on tactical overlay and later fixed income derivatives.

In Germany, a Canadian colleague once suggested the CFA exam as an easy follow-up to a university degree. After enrolling however, this proved to be very serious business. In moving to Kempen Capital Management in 2007, Hilko initiated an International Business Development team. As head of the team he now travels almost weekly across Europe, and increasingly outside, to meet with potential prospects for KCM investment strategies. In this role, the importance and uniqueness of the Dutch financial knowledge and experience became ever clearer.

As current President of the CFA Society Netherlands, Hilko oversees one of the fastest-growing organisations of finance professionals, but one that is still relatively unknown. With more than 122,000 members globally and over 700 members in the Netherlands this is slowly changing though. CFA Netherlands thus feels obliged to get more publicly involved in the discussion on the finance industry. Six years onwards from the crisis, it is noted that we need to direct the discussion away from blaming-and-shaming and looking-backwards, onto a vision for the future. This aspect is missing dearly in all current public and non-public discussions.

Bank of China by Mason via Flickr, some rights reserved

With this in mind, CFA Society Netherlands has launched a “Charter for the Dutch Financial Sector” (pdf). This three-pager summarises five principles that seem inseparable in any sensible discussion about the future of the sector to regain public trust:

  1. Ethics should demonstrably be given a central role: the notion here is that without providing a clear pre-arranged framework of ethics, financial professionals are entering the profession without sufficient mental notion. One needs to preconsider the steps to be taken when confronted with ethical dilemmas. Financial education should better cater for this.
  2. The structure of the sector should be geared more towards small-scale operations and specialist areas of expertise: the Dutch seem to be champions in consolidation if you look at the diversity of the sector. This has effects on employment opportunities, innovation and cultural drift as combining sub-cultures is not always effective.
  3. Long-term client interests must prevail: the sector needs to strike a better balance between profits and client interests by better considering what solutions the products offered actually provide.
  4. Variable remuneration can have a future: there can be no discussion about the future without considering the positive use of variable remuneration. It needs to be better structured and explainable as to what formal set-up actually benefits client access to financial expertise.
  5. Acknowledging the potential for distinctive advantage in strategic sustainability policy: The Netherlands is internationally seen as a high-knowledge country when it comes to Finance with the added capability of being more leading in terms of a new purpose for the sector and how Finance can be used for doing good.

In short, the challenge ahead of us is to improve our (financial) communication massively: it is sub-par now and the sector needs to add more experts and expertise. We should challenge the ongoing quantification of the sector and explain better why the existing infrastructure matters to all of us in daily life. This is a debate we should all get involved in: the future of finance initiative invites everyone to do so.

 

By Hilko de Brouwer, CFA President

Hilko de Brouwer (1971) holds a Master’s degree in Economics from Maastricht University School of Business and Economics. 

Post Your Thoughts