Immigrant Investment Advisers Bemoan the 'Nightmarish' Process of Getting Licensed in Israel

For English speakers seeking investment adviser licenses in Israel, the language barrier can prove disheartening if not prohibitive. Nefesh B’Nefesh is trying to ease the transition.

Andrew Esensten
Andrew Esensten
Andrew Esensten
Andrew Esensten

Nefesh B’Nefesh is making efforts to help English speakers in the field of finance obtain investment adviser licenses from the Israel Securities Authority − a daunting process that several new immigrants describe as nothing short of nightmarish.

The ISA has been working with the immigrant-assistance organization for several months to produce an English-language manual that details the licensing requirements. The manual, which grew out of ongoing conversations between the two organizations and is in the final editing stage, will be published on the ISA website in the coming weeks, according to spokesperson Sharona Mazlian-Levy.

“We felt that part of the problem was really the gap in the information that the new immigrants had,” Mazlian-Levy said. “We hope that this manual can help them through the process.”

While people in the close-knit Anglo financial world welcomed news of the manual, saying it would give future immigrants more realistic expectations about the time and effort required to get licensed, several spoke passionately in interviews about how the process itself is the real problem.

Among their complaints are that the ISA does not recognize foreign credentials; the licensing exams are offered only twice a year in Hebrew; and exemptions from the exams and mandatory internship period are hard to come by, even for those with many years of experience.

“I come as a trained, licensed investment adviser from the United States, and they equate me to a recent college graduate with no experience,” said one man, who immigrated to Israel from New York last year. “It feels like crap.”

The man, who today works at an Israeli portfolio management company and requested anonymity so as not to antagonize his employer, told Haaretz that he was denied exemptions from three of the six exams and that he failed one of them because he spent more than half the allotted time translating the questions. He is now deciding whether to wait several months to take it again or return to the United States.

“I wanted to live here, but I cannot risk my career for another couple of years while I try to learn Hebrew well enough to pass the test,” he said, noting that he is limited in the types of tasks he can perform and how much money he can make without a license. ‏(Last month, he took his case to MKs Dov Lipman and Boaz Toporovsky, who told Haaretz that they are exploring the issue.‏)

The ISA has made concessions to foreign-born test takers in the past and currently provides them with a translator and an additional 20 minutes to complete the exams. But many still struggle with the high-level tests in a language they are in many cases still learning, and it’s not unusual for people to take them multiple times before passing, said Adina Sacks, an employment adviser at Nefesh B’Nefesh.

“Historically, it is known that it’s difficult for non-native Hebrew speakers to obtain an ISA license,” she said. “We have been working with the ISA to ease the process for [immigrants] and pursue whatever leniencies might be available.”

The ISA told Haaretz that the exams are only offered in Hebrew because “the licensees must be able to read and understand professional materials and regulatory materials such as ISA circulars, which are in Hebrew.”

Aaron Katsman, who runs a boutique wealth management firm in Jerusalem and advises new immigrants who are thinking about working in finance, said “there’s nothing unreasonable” about the language requirement. “We’re not living in Manhattan,” he said. “I work on American markets and I got licensed − that’s just the way it works.”

But there are other parts of the process that he said he finds problematic. “If somebody comes with 20 years of experience and a U.S. license, they still may have to take certain tests,” he said. “That, I think, is a little beyond the pale.”

One such immigrant, who worked for many years on Wall Street and asked not to be identified because he is in the middle of the licensing process, said that at one point he considered changing careers because of his “nightmarish” experience with the ISA.

“I started the process over two years ago and got rebuffed on everything,” he said, explaining that he was at first denied an exemption from taking the three basic exams ‏(in accounting, statistics and finance, and economics‏) because his undergraduate degree was not in finance or a related field. He eventually received the exemption “after a lot of fighting.”

Another immigrant from the U.K., who thought he could bypass the ISA exams by completing the internationally recognized Chartered Financial Analyst Program while living in Israel, was told he would have to take them anyway.

“It doesn’t make sense that people are having to go through a rigorous series of examinations again, when they already have done so previously,” he said. “They’re very harsh.”

In a statement to Haaretz, the ISA wrote: “The Israeli system differs from the American system in that there is only one kind of license, which means that anyone who receives the Israeli license can advise on any kind of financial asset, including derivatives, options and so on. Therefore, in order to protect the investors, the ISA has to be sure that the person receiving the license has the knowledge and experience needed in order to advise on all financial assets.”

Veteran immigrants who work in finance in Israel were divided over whether or not immigrants should raise their Hebrew to a professional level before trying to enter the field.

“It is possible for them to work in finance without being fluent in Hebrew,” said Aaron Leitner, a New York-born partner at Tandem Capital Asset Management who was among the first to take the licensing exams in the late 1990s. “There are a lot of people that speak English, and if you deal with global markets there are even more.”

But Aaron Lapp, a native of Cleveland, Ohio, who works at the private equity firm Goldrock Capital, called fluency in the local language a necessity.

“Even if your expertise is global markets and you’re going to be trading primarily in English, you still are going to be working with colleagues and traders throughout the banking institutions here,” Lapp said.

The investment adviser from the U.K. told Haaretz that he knows at least seven qualified immigrants who left the financial industry or settled for lesser positions because of the ISA’s stringent regulations.

“There are a lot of good people who just have language problems and are stuck,” he said, adding: “The industry’s being deprived of some very capable people.”

Aaron Katzman. 'There's nothing unreasonable about the language requirements. We're not living in Manhattan.'Credit: Emil Salman

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