Career conversations: Putting the spotlight on ethics in asset management

CFA® (Program) as a curriculum will prepare you for global markets, irrespective of which asset class, which markets, which part of the world you are dealing with. That knowledge, I thought, was very important if you want to develop your career as a wholesome investment sort of management professional. And that's when I thought CFA (Program) is something which is required if you want to grow in your life.

Hi, my name is Biharilal Deora. I'm a Director and Compliance Officer with the Abakkus Asset Manager, LLP. We are a long-only boutique, India focused AMC, managing close to about two billion dollars in long only equities.  

Twenty years ago, I think the differentiation between accounting and finance was not that great. I began my career as a chartered accountant, and quickly realized that there is a difference between accounting and finance. Even though I did it to get my job in finance, but essentially it was more on accounting side. It was more focused on numbers, balance sheet, ratios, maybe audit and tax was a bit of element into it, but not really focused on finance per se.

So I think six months down, I realized that this is not something I want to do for the rest of my career. Being a chartered accountant, I was on the other side of the table. But what does it mean to the investor or when you're looking at two companies with the same return on equity, how do you differentiate between the two based on the quality of return of earning? That knowledge essentially I realized that's only available in the CFA Program.  

I signed up for CFA (Program) somewhere in February 2006. I think I got my CFA® (exam) Level III cleared in June of 2009. So when I got my charter and I started, volunteering with the Society, one thing which I realized is that the awareness of the whole membership process was very low. We were a country-specific Society, which only chapter in Mumbai at that point in time. It was very hard to find two charterholders who could give reference for you during that membership. And then that's what I thought saying that, "Okay, membership is one thing I want to contribute."

Not only having access to the great content like FAJ, the Financial Analysts Journal, you also have access to regular insight sharing from practitioners, access to this global passport program, which essentially allows you to attend a conference, which is happening anywhere in the world. So that amount of value add which the membership provides is unparalleled to any other membership which I've seen.

With the knowledge of ethics and with the knowledge of professional conduct you might have, you can avoid some of those pitfalls which are out there. I have a friend who is a CEO of a hospital. He has to take care of the patients, but sometimes, business might require you to use medicine, which is cheaper than the others, but his ethics framework on the CFA (Program) side won't allow him to do that.

When you are looking at a CFA Program, you have to look the program as a way of life, not just as a full stop. Consider of this as something which you have to practice your whole life, way of dealing with situations, way of living that ethical mindset or ethical framework, I think it will yield the best result for you.