Educational Alpha: Season 2 Episode – Conversation with Will Goodhart, Chief Executive, CFA Society UK

Release Date: November 27, 2024

In this insightful episode of Educational Alpha, host Bill Kelly engages in a reflective and forward-thinking dialogue with Will Goodhart, the Chief Executive of CFA Society UK. Spanning nearly two decades, Will shares his extensive journey in the finance industry, emphasizing leadership, professional evolution, and the critical challenges of sustainability in finance. This comprehensive summary encapsulates their rich conversation, highlighting key discussions, insights, and conclusions.

1. Introduction and Background

Bill Kelly opens the conversation by welcoming Will Goodhart, acknowledging the simultaneous transitions both leaders are undergoing. He expresses admiration for Will's tenure and contributions to CFA Society UK.

Will Goodhart responds by recounting his diverse career path. Starting with a degree in history, he ventured into finance atypically by joining Euromoney Institutional Investor as a database analyst. His initial work involved building a comprehensive Eurobond database, providing him unparalleled insights into the Eurobond market. Transitioning to journalism, Will found his niche as an editor, leveraging his analytical skills to enhance the quality of financial reporting. His eventual move to CFA Society UK was driven by a desire to revitalize professional bodies in finance, which he previously critiqued for lacking curiosity and adaptability.

Notable Quote:

“I never believed that the journalists had done enough work… I'm an optimist and so I've always tried a lot of different things.”
— Will Goodhart [05:59]

2. Leadership and Curiosity

Bill and Will discuss the essential qualities that have underpinned their long-standing leadership roles. They converge on curiosity as a pivotal attribute, essential for navigating the rapidly evolving finance landscape.

Will Goodhart emphasizes the importance of curiosity within professional bodies, criticizing their traditional roles as mere administrative entities. He advocates for proactive leadership that anticipates changes and fosters innovation.

Notable Quote:

“Curiosity is underrated in terms of how important it is.”
— Bill Kelly [06:44]

Notable Quote:

“Optimism usually pays for itself.”
— Will Goodhart [08:09]

3. Serving the End Investor and Professional Bodies' Roles

A significant portion of the discussion centers on the role of professional bodies like CFA Society UK and CAIA in serving the end investor. Both leaders assert that the ultimate objective is enhancing outcomes for investors, advocating for ethical and technical competence among their members.

Will Goodhart highlights the challenge of ensuring that end investors are well-informed and capable of utilizing the information provided by investment firms. He underscores the responsibility of professional bodies to bridge the gap between information dissemination and practical application by investors.

Notable Quote:

“The end investor is really the critical component of the piece.”
— Will Goodhart [09:16]

4. Sustainability, ESG, and Climate Change

Will delves into his passion for sustainable investing and the imperative of addressing climate change within the finance sector. He narrates the inception of CFA Society UK's ESG (Environmental, Social, and Governance) certificate, driven by the urgent need to integrate sustainability into investment practices.

Will Goodhart reflects on the profound impact of climate change, sharing personal motivations rooted in ensuring a livable world for future generations. He emphasizes that sustainability is not merely a moral imperative but a business necessity, advocating for effective messaging that highlights economic benefits alongside ethical considerations.

Notable Quote:

“This isn't a moral argument, this is a business argument.”
— Will Goodhart [19:07]

Notable Quote:

“Investors need to understand the range of possibilities and then help their clients hold diversified positions.”
— Will Goodhart [25:04]

5. Tenure, Legacy, and Professionalism

Bill commends Will’s impressive 18-year tenure at CFA Society UK, comparing it with other long-serving leaders in the association. They explore the dynamics of sustained leadership and the importance of leaving a lasting, positive legacy for successors and the broader investment community.

Will Goodhart reflects on the evolving challenges over his tenure, from the global financial crisis to the rise of ESG investing. He underscores the importance of adaptability and continuous learning in maintaining relevance and effectiveness in leadership roles.

Notable Quote:

“Maintaining a genuinely long-term perspective is challenging.”
— Will Goodhart [26:38]

6. Long-termism vs. Short-termism in Investing

A critical theme is the tension between long-term and short-term investment strategies. Both leaders stress the necessity of fostering long-term thinking among investors to achieve sustainable growth and resilience.

Bill Kelly shares his advocacy for long-termism, highlighting the detrimental effects of short-term market timing and the benefits of compounding returns over extended periods. He encourages leaders and professional bodies to promote investment philosophies that prioritize long-term objectives.

Notable Quote:

“The power of starting early and compounding is a tremendous asset.”
— Bill Kelly [28:51]

7. COP 29 and Climate Action

The conversation touches upon the recent COP 29 summit in Azerbaijan, with Will expressing cautious optimism. While acknowledging the challenges posed by political dynamics, he emphasizes the substantive work happening within boardrooms and among startups to drive sustainable innovations.

Will Goodhart is skeptical about the immediate tangible outcomes of COP 29 but remains confident in the broader, ongoing efforts within the financial and entrepreneurial sectors to address climate-related challenges.

Notable Quote:

“There's an enormous amount of activity going on because these are problems that are not going to go away.”
— Will Goodhart [23:23]

8. Future Directions and Next Steps

As Will approaches the end of his tenure, he contemplates his future endeavors, expressing a keen interest in impact investing and continuing to influence sustainable finance. He underscores the importance of providing robust responses to skeptics and maintaining ethical standards within the investment community.

Will Goodhart envisions remaining active in initiatives that balance risk, return, and societal impact, aiming to foster a more responsible and forward-thinking financial sector.

Notable Quote:

“If you stay curious and stay informed, you're bound to stay relevant.”
— Bill Kelly [33:41]

9. Conclusion

Bill and Will conclude their conversation by appreciating each other's contributions and reaffirming their commitment to advancing the finance industry's integrity and sustainability. Will expresses gratitude for his role and looks forward to continued involvement in impactful projects, while Bill celebrates Will's legacy and the positive transformations he has spearheaded within CFA Society UK.

Notable Quote:

“Our job as professional bodies is to make sure that our members are ethically and technically competent to look after the interests of their end clients.”
— Will Goodhart [29:57]

Key Takeaways

• Curiosity and Adaptability: Essential traits for leadership in the ever-evolving finance sector.

• End Investor Focus: Professional bodies must prioritize enhancing outcomes for investors through ethical and technical excellence.

• Sustainability as Business Imperative: Integrating ESG and addressing climate change are crucial for long-term economic viability.

• Long-termism Over Short-termism: Encouraging sustained investment strategies fosters resilience and growth.

• Continued Engagement: Leaders like Will Goodhart plan to remain active in shaping the future of sustainable and impact investing.

This episode serves as a compelling exploration of leadership, professional responsibility, and the indispensable role of sustainability in modern finance, offering valuable insights for professionals and enthusiasts alike.