What is a Chartered Financial Analyst?
About the article
This is a digitised version of an article from The Cayman Compass's print archive. Occasionally, the digitisation process introduces transcription errors, or other problems.
See the article in its original context from July 1999.
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This is likely to change in coming years as the number of CFAs increases. Currently, more than 26,000 investment professionals in over 70 countries hold the CFA charter. The CFA programme is growing rapidly. More than 58,000 candidates worldwide are enrolled in the CFA programme which must be completed in order to earn the charter. The Association of Investment Management & Research (AIMR) in Charlottesville, Virginia, administers the CFA programme and awards CFA charters annually to candidates who have successfully passed the CFA exams and who meet the work-experience requirements of charterholders.
The programme consists of a series of three exams given over a three-year period. The Level I exam focuses on the basic tools of asset valuation and portfolio management.
Levels 11 and III cover asset valuation and portfolio management and consist entirely of essay questions. A commitment to professional ethics
underpins the entire programme. The exams are conducted annually in late May or early June, and their range and depth say much about why the CFA charter has become universally recognised and respected among professional investors.
Most CFA candidates find that they must devote substantial amounts of time and energy to prepare for the exams. Last year, even though most candidates are university graduates, 59% of the candidates taking Levels I and III passed, while the Level 11 candidates had a 62% pass rate.
This year, the exams were taken at 210 locations around the world, including Grand Cayman, where over 50 candidates sat the exams at three levels.
Acceptance
Once held exclusively by securities analysts, the CFA designation is increasingly cropping up on the business cards of institutional money managers, investment advisors catering to high-net-worth individuals, academics who teach and write about finance, and industry regulators. For thousands of CFA charterholders, the learning process does not stop after they pass the Level III exam. AIMR also hosts about 18 continuing education conferences and seminars each year. Perennial programmes include an annual conference, a week-long financial analysts seminar held at Northwestern University, and a week-long investment management workshop held at Princeton University and taught by Harvard faculty.
Standards
Just as the CFA charter has set the standard for professionaleducation, it has also set the standard for professional conduct in the investment management profession. AIMR has a Code of Ethics and Standards of Professional Conduct handbook which defines the standards to which all CFA charterholders must adhere. In addition, A IMR's Performance Presentation Standards (AIMR-PPSTM) define how an investment manager reports his or her results to clients and potential clients.
The goal is to prevent managers from inflating their numbers. AIMR also works with regulators, legislators and standard-setting organisations such as the Financial Accounting Standards Board in the US, the International Accounting Standards Committee in London, the Securities & Exchange Commission in the US, and the Financial Services Authority in the UK. They work together on developing and setting new accounting standards and investment business legislation.
For instance, AIMR has been the leader in setting soft-dollar commission standards which define how brokerage commissions paid by clients of investment managers can be used.
CSFA
Locally, the Cayman Islands Society of Financial Analysts (CSFA), an affiliate society of AIMR, promotes the CFA programme, hosts monthly investment lunches to which a speaker is invited, and provides investment education to the public through "Money Talk", a half-hour show which appears on CITN every Monday morning.
Further information on the CFA programme can be obtained from AIMR's web. site at www.aimr.org, or by e-mailing the CSFA at cfa@candw.ky. The CFA programme is a self-study programme which can be completed without the candidate having to leave the Cayman Islands or give up their existing job.
The board of directors of the CSFA is always open to questions about the CFA programme from candidates or potential candidates.
