Post on 18-Dec-2015
CFA Society of South AfricaBob Johnson, CFA, PhDManaging Director, CFA and CGIPS Programs Division
December 2005
CFA Institute
Member Organization with no corporate or political tie-ins: Offices in Charlottesville, Virginia; New York, Hong Kong, London
Mission: To lead the investment profession globally by setting the highest standards of ethics, education, and professional excellence
Members: 80,000 investment professionals in 120 countries; 84% hold the CFA charter
Societies: 131 societies in 52 countries
Member Distribution
74%
12%
11% 2%
1%
N. AmericaEuropeAsia-PacificAfrica/ Mid EastLatin America
CFA Candidate Distribution
47%
15%
31% 5%
2%N. AmericaEuropeAsia-PacificAfrica/ Mid EastLatin America
Strategic Objectives
1.Protect and build the CFA brand
2.Position the CFA Centre as a thought leader in setting ethical and professional standards
3.Reshape the organization to be more flexible and responsive…a more integrated CFA Institute/Society model
4.Leverage CFA Institute core competencies into new opportunities
5.Position CFA Institute as the respected leader in the field of education for investment professionals
Strategic Objectives
1.Protect and build the CFA brand
Inaugural CFA Examination—1963
CFA Examination 2004
Candidate Growth
0
20,000
40,000
60,000
80,000
100,000
120,000
FY1990
FY1991
FY1992
FY1993
FY1994
FY1995
FY1996
FY1997
FY1998
FY1999
FY2000
FY2001
FY2002
FY2003
FY2004
FY2005
Charterholders CFA Enrollment
South African Candidates and Members
• In 2005 there were 1,811 candidates enrolled in the CFA Program in South Africa• 608 candidates enrolled for the exam tomorrow in Johannesburg• 810 CFA Institute members in South Africa• 762 active CFA charterholders in South Africa
“More often than not, the market simply votes with its feet - in some areas of financial services, for example, the highly regarded CFA (chartered financial analyst) qualification has become a much more important ticket to the top than the MBA.”Business Day (South Africa)21 May 2004
“Becoming a CFA is now a passport for excellence and international mobility.”Financial Times21 June 2004
“…there is increasing demand for qualifications that will travel. One of the most successful solutions has been the Chartered Financial Analyst certificate, a qualification popular among the investment banks that is roughly equivalent to a specialised postgraduate finance degree.”Financial Times14 November 2005
“The CFA designation is the hallmark of excellence in the global investment community. It is well recognized that individuals who have earned the CFA charter have made personal commitments to an extensive study programme and to professional standards of behavior.”Bermuda Sun29 October 2003
“The Chartered Financial Analyst (CFA) qualification is roughly equivalent to a specialised postgraduate degree, including a mixture of economics, ethics, law and accountancy. It is much liked by employers in financial services. Whereas there are tens of thousands of finance degrees available around the world, ranging from excellent to worthless, there is only one CFA…”
The successful candidate will take on a leadership role in developing the Finance Concentration and contributing to classes supporting the Chartered Financial Analyst (CFA) program.
Today's investment management professionals need more sophisticated management practices and professional training.
Graduates need rigorous analytical training and practical understanding beyond that offered in general business programs.
The MSIM Program is designed to meet this need.
The program trains students in leading-edge theory and practice in the field of investment management. Students gain expertise in the design, management, and marketing of investment products.
The program also provides the background necessary for preparing for the CFA® exams.
Get an Edge on Your Investment Career
The MSIM Program is ideal for:
Individuals who want to advance their investment careers
Professionals in other industries who have related skills and would like to enter the investment field.
The program also provides the background necessary for preparing for the CFA® exams
Regulator Recognition
• New York Stock Exchange• UK Financial Services Authority• Hong Kong Securities & Futures Commission• State/provincial waivers around the world
Pass Rates
0%
50%
100%
'63 70s 80s 90s 2005
Combined Pass Rates
2005
• Level I—36%
• Level II—56%
• Level III—55%
Historical Averages
• Level I—49%
• Level II—52%
• Level III—67%
The CFA® Program
EXAMINATIONSCURRICULUM
BODY OF KNOWLEDGE
GLOBAL PRACTICE ANALYSIS
GRADING
MINIMUM PASSINGSCORE (MPS) -
BD OF GOVERNORS
CCC COE
Practitioners at every step of the process
Global Practice Analysis
• Conducted every five years
• Panels of employers and investment professionals assembled around the world
• Panel results compiled and CBOK revised
• Advisory Board of CFA charterholders reviews changes to CBOK and sets specifications for charterholder survey
• Survey of CFA charterholders around the world (scheduled for January of 2006)
Developed by Candidate Curriculum Committee (CCC); 150 people involved (all charterholders) from all over the world; extensive review; each level 18 study sessions in CFA Institute-produced study guides
Study Guide Topic Focus Learning Focus
Level I Investment Knowledge Tools and Ethical Standards
Level II Asset Application Valuation and Ethical Standards
Level III Portfolio Synthesis and Management Ethical Standards
Curriculum
Each study session is designed for flexible, self-directed study
Each reading has learning outcome statements (LOS): “The candidate should be able to…”
Readings are drawn from a variety of materials, both CFA Institute and other
Curriculum
CFA Examinations
Written and reviewed by CFA charterholder practitioners from all over the globe.
The Council of Examiners are subject matter experts who have been trained in question writing
Form of questions Multiple Choice (Level I)
Item Set (Level II & III)
Constructed Response (Level III)
Examinations
Developed by Council of Examiners (COE) – CFA charterholder practitioners and staff; over 80 people from all over the globe involved, extensive reviews; each exam 6 hours in length
Exam Topics Format
Level I All topics Multiple choice
Level II All topics Item sets—100% Level III Portfolio Management Essays—50% Other topics Item sets—50%
EXAMINATION ADMINISTRATION
• In 2005, over 110,000 candidates• 184 exam sites in June in 89 nations• 48 exam sites in December• Candidates came from 144 nations
321 graders27 countries2,389 total years graded145 senior graders
2005 Grading Population
MPS for each level established by CFA Institute Board of Governors who are also CFA charterholders
Multiple inputs (standard setting, candidate performance statistics, quality of candidate responses, etc.) used to set the MPS
Passing rate for each level is a residual determined by each level’s MPS
Minimum Passing Score
Employer Outreach
• Goals
Build wider recognition and appreciation of CFA Institute and what it means to hold the CFA charter
Encourage employers to:
Hire CFA charterholders
Cover the costs of CFA Program enrollment
Adopt CFA Institute standards as their own
Use what we learn in product and service development• Resources added for this effort
Peggy Eisen, CFA…Managing Director of Marketing
Chuck Tschampion, CFA…Director of Industry Outreach
University Outreach
• Goals
Encourage universities to adopt a “CFA track” in their graduate and undergraduate degree programs
– Serves as third-party endorsement of value of CFA Program
Get more universities to adopt CFA curriculum– Technology allows us to custom publish textbooks for specific
uses
Promote the merits of the CFA Program to the next generation of investment professionals
• Resources added for this effort
Bob McLean, CFA…Director of University Relations
Strategic Objectives
2.Position the CFA Centre as a thought leader in setting ethical and professional standards
Integrity
CFA Centre for Financial Market Integrity
• Launched in November 2004• Mission is to:
Be a leading voice on issues of fairness, efficiency and investor protection in global capital markets
Promote high standards of ethics, integrity, and professional excellence within the investment community
• Distinct unit of CFA Institute• Advisory council chaired by John Neff, CFA
CFA Centre for Financial Market Integrity
Corporate Governance
Regulatory Outreach
Financial Reporting
Code of Ethics
Trade Management Guidelines
Asset Manager Code
GIPS
AIMR-PPS
Capital Markets Policy
Professional Standards
Investment Performance Standards
CFA Centre Initiatives
CFA Institute Code of Ethics– Revisions take effect in January ‘06
Asset Manager Code of Professional Conduct
Soft Dollar Standards
Trade Management Guidelines
Research Objectivity Standards
Issuer/Analyst Best Practices
Corporate Governance Manual
Business Reporting Model
Ethics Training (in beta test mode)
Strategic Objectives
3.Reshape the organization to be more flexible and responsive…a more integrated CFA Institute/Society model
Name Change
Branding Chaos
Branding Harmony
Member Communication
Strategic Objectives
4.Leverage CFA Institute core competencies into new opportunities
CGIPS Program
Certificate in Global Investment Performance Standards (CGIPS)
– A specialty program for investment performance professionals
– Independent of the CFA Program
Major Topic Areas– Ethical standards – Performance measurement, attribution, and
appraisal– The GIPS standards, including the real estate
provisions
Purpose of CGIPS Program
1. Professionalize the field of investment performance evaluation/presentation
2. Improve practitioners’ proficiency in applying analytical techniques and the GIPS standards
3. Recognize individuals who attain the highest achievement in the field
Who Should Participate in CGIPS?
Investment managers
Verifiers
Investment consultants
Plan sponsors
Custodial banks
Regulatory agencies
Software developers
To Earn the CGIPS Credential
Sequentially pass two computer-based examinations
Principles and Expert
Meet two-year experience requirement in performance-related positions
Agree to comply with the CGIPS Association Code of Ethics and Standards of Professional Conduct
Become a member of the CGIPS Association
Strategic Objectives
5.Position CFA Institute as the respected leader in the field of education for investment professionals
Education
Holistic approach to post-graduate education for the investment professional
Core generalist exam from practice analysis
Flexible professional development– By specialty track– Broad scope: our offerings plus links to others– Easy-to-use PD diary
Diverse offerings– Conferences and written proceedings– Webcasts– Publications (Financial Analysts Journal & CFA Digest)
Aspire to be the “go to” organization for you and your firm’s professional development?
Organizational Assets
No corporate interest group tie-ins
80 years of societies—investment community
60 years of luminaries in Financial Analysts Journal
40+ years of CFA Program
40+ years of Code of Ethics
Working relationship with regulators– We prefer self-regulation over regulation– Better for:
– Investment firms– Regulators– Investors
What Can You Do?
Above all else—help us to maintain our excellent reputation
Be a part of this community—on your terms, but let us know that you’re connected
Volunteer—locally or on an advisory council
Respond to our surveys—it’s our best way to monitor your needs
Push your firms and your clients:– To hire CFA charterholders and members of CFA
Institute– To calculate performance using GIPS– To adopt an asset manager code of ethics
Recruit young candidates—instill in them the importance of the CFA Program and its curriculum