Getting Started Toward Your CFA Designation

							Getting Started Toward Your CFA Designation

November 28, 2007
Richard Clemens, CFA and Barbara MacLeod, CFA

Agenda
CFA Charter
–Its value to the CFA Charterholder

CFA Program
–Curriculum –Exam Format

Candidate Resources
–Comparing Study Approaches –Review Course Providers –Society Resources

Beyond the Charter
–CFA Institute –CFA Society of Columbus

Why Are You Here?

Courtesy: Aronson+Johnson+Ortiz, LP

CFA Institute Mission

To lead the investment profession globally by setting the highest standards of ethics, education, and professional excellence.

CFA Charter Represents
Ethics and standards of professional conduct
–Competence –Integrity –Professional Excellence

Globally recognized gold standard in the industry
–Knowledge –Respect and credibility –Diverse career opportunities

Media Regard
Financial Times – 22 May 2006 Rise of the Grueling Professional Exam
“The CFA for financial analysts is one of the fastest growing qualifications and increasingly seen as a rival to the MBA, says Phil Davis.”

Bloomberg – 2 June 2006 CFA Test-Takers Seek Wall Street Success, Global Acceptance
“Investment banks increasingly require CFA credentials for employees and job candidates.”

The Economist – 26 February – 4 March 2005
“ Whereas there are tens of thousands of finance degrees available around the world, ranging from excellent to the worthless, there is only one CFA . . . It used to be just an American qualification. But explosive growth has made it, in effect, global currency.”

Industry Regard
School Employees Retirement System of Ohio – Investment Officer, Equities
–Seeks a hardworking investment professional to be a key member of its investment team . . . CFA charter is preferred.

Honda of America Manufacturing, Inc. – Investment Analyst
–Seeking an investment analyst to monitor portfolios . . . assist with the entire investment process . . . Chartered Financial Analyst (CFA) (or progress towards) a plus.

Ohio Public Employees Retirement System— Risk Manager
–Expertise is needed to develop, implement, and manage an investment risk management function via identifying, assessing, managing and reporting on investment related risks . . . CFA designation strongly preferred.

Industry Regard
Results of 2005 Compensation Survey * •All respondents:
–Charterholders paid 54% more than those without CFA charter –$180,000 median vs. $116,850

•With 10+ years experience:
–Charterholders paid 24% more than those without CFA charter –$248,000 median vs. $200,000

•With 10+ years experience and MBA:
–Charterholders paid 18% more than those with MBA only –$236,510 median vs. $200,000 –Combined CFA charter and MBA most lucrative –$255,000 median

2007 Compensation Survey* affirms results
* Conducted by Russell Reynolds Associates for CFA Institute

Global Passport: The CFA Charter

Members’ Locations
95,351 Members and 135 Societies Worldwide*
United States & Canada Members: 65,285 Europe Members: 13,286 Asia & Mainland China Members: 2,008

Latin America Members: 1,051 Africa & Middle East Members: 2,226

Pacific Asia Members: 11,427

Source: CFA Institute

* as of September 1, 2007

Global Passport: The CFA Charter

Candidate Enrollment (June & Dec 2007)

Canada 10,406

U.K. 7,284 Europe 18,619 P.R. China 10,207 Middle East & Africa 6,613 Singapore 4,893

Korea 4,191 Hong Kong 8,211 Taiwan 2,711

U.S. 40,102 Latin America 2,152

Australia 2,695

Source: CFA Institute

Requirements
Charterholder
–Sequentially pass each CFA Exam level –4 years acceptable professional experience –Member in good standing with CFA Institute and apply for membership in local society –AND– –Submit professional conduct statement

Candidate
–Meet professional conduct admission criteria –AND–
•Undergraduate degree by end of year •OR– •4 years qualified professional experience •OR– •4 years of work and college combined total

Agenda
CFA Charter
–The value of the CFA Charter

√

CFA Program
–Curriculum –Exam Format

Candidate Resources
–Comparing Study Approaches –Review Course Providers –Society Resources

Beyond the Charter
–CFA Institute –CFA Society of Columbus

CFA Candidate Curriculum
Practical and Relevant Education Candidate Curriculum Committee
–Practice analysis survey (5 years) –Applied CFA Body of Knowledge™ (CBOK) –Self study curriculum approach

Council of Examiners
–Examinations and topic weights –Grading –Minimum passing score set by CFA Institute Board of Governors

Sequential CFA Exam Levels
LEVEL I I I
Synthesis and Evaluation of Client Needs and Portfolio Management

LEVEL I I
Application and Analysis Focused on Asset Valuation

LEVEL I
Knowledge and Comprehension of Fundamental Investment Tools and Concepts

Ethical and professional standards emphasized at every Level

CFA Exam Format
100%

75%

50%

25%

0% Level I Multiple Choice Level II Item Set Level III Essay

Estimated Topical Weights
50% 40% 30% 20% 10% 0%
Level I (knowledge and comprehension) Level II (analysis and application) Level III (synthesis and evaluation)

Asset Valuation Investm Tools ent Ethical and Professional Standards Portfolio Managem ent

Source: CFA Institute

Estimated Topical Weights

Source: CFA Institute

Agenda
CFA Charter
–The value of the CFA Charter

CFA Program
–Curriculum –Exam Format

√ √

Candidate Resources
–Comparing Study Approaches –Review Course Providers –Society Resources

Beyond the Charter
–CFA Institute –CFA Society of Columbus

Historical Combined Pass Rates

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1963 1967 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007

Source: CFA Institute 2003 -- 2006 reflect June and December 2007 reflects June only

Why Declining Pass Rates

√ √ √

Insufficient preparation Inadequate discipline and structure Curriculum difficulty Lack of support system Less experienced candidates English as a second language

√

Excessive reliance on study notes as source of preparation

Strategy for Success

Candidate Online Preparation Toolkit
Online toolkit available to enrolled candidates Get in-depth CFA program information
–Curriculum and reading assignments –Learning outcome statements (LOS) –Study sessions organize preparation around LOS –Online sample exams measure candidate readiness

Create Strategy for Success
–Understand your needs –Create study plan –Adhere to the plan –Measure and evaluate your performance –Rebalance and revise your study plan

www.cfainstitute.org/cfaprog/resources/

Diligent Strategy for Success
Dedication
–January through April –300 hours (minimum) study time –Candidate Body of Knowledge

Determination
–May –Practice and Review –Focus on the Exam

Domination
–May 31, 2008 –Pass the CFA Exam!

Comparing Strategies
Curriculum texts now included in cost of Candidate enrollment Self Study
–Read CFA curriculum –Prepare own review notes

Supplemental Material
–Study groups –Online candidate toolkit resources –Sample practice exams (May/Nov) –Prep provider texts

Prep Provider Guidelines Program
–Self study supplement (e.g., Schweser) –Classroom supplement (e.g., Stalla)

Prep Provider Guidelines
Supplement, not Substitute, Curriculum Studies
–CFA Institute does not partner with any preparatory course and does not endorse, promote, review, or warrant the accuracy of the products or services offered by preparatory organizations –Many preparatory programs employ former CFA exam graders, question writers, and other individuals formerly affiliated with CFA Institute, but they are contractually bound not to advertise that affiliation –CFA Institute makes available pass rate analysis reporting to member societies and prep providers who participate in the Prep Provider Guidelines Program, but providers and societies are contractually bound not to advertise those pass/fail rates –Preparatory courses are not necessarily the most cost effective way to prepare for the exam

See Online Candidate Toolkit for participating providers

The Ideal Prep Provider
Created by CFA charterholders Helps you master the CFA curriculum truly learning and applying concepts Based on the most updated CFA curriculum Assures the accuracy of its materials Stands behind its program Accommodates your unique learning style and scheduling demands Supports you when you need it Instructors who are specialists in the areas taught Instructors who are effective teachers Provides you lots of practice

The Stalla System

The Stalla System
Thursday Evenings, 6—9:30PM January 24—May 8, 2008 Pfahl Hall – Room TBA
Sample Class Seminar (Financial Analysis) January 8 Live Instruction CFA Review Course in Columbus
–CFA Society of Columbus contract with Stalla –Society members receive discounted course fees –Stalla provides CFA review course material to Columbus candidates –Society promotes the Stalla System within Columbus –Society provides course instructors –Society receives royalty from Stalla

Among providers evaluated by CFA Society of Columbus, The Stalla System appears to offer comprehensive supplemental preparation materials for the CFA exam.

2008 CFA Program Costs

J – 10/3/07 D – 3/15/08

J – 2/15/08 D – 8/15/08

J – 3/17/08 D – 9/17/08

Registration (one time) Exam Enrollment * Total CFA Institute Cost The Stalla System * Total Annual Cost Total Initial Cost

$

390 600 $ 990

$

390 688

$

465 930

$ 1,078 $ 1,190

$ 1,395

$1,790 $ 2,180

$1,878 $ 2,268

$2,020 $ 2,585

* Further discounts available to Society members

Society Resources
CFA Society Scholarship
–Ten scholarships awarded –Levels I, II, and III available –Contact: Royce West (westr@strsoh.org)

Stalla Review for the CFA Exam
–Member discount to enrollment fee –50% scholarships for review course

Society Events
–“CFA Exam Party” immediately after May 31 exam –CFA Charter Award Ceremony November 2008

Agenda
CFA Charter
–The value of the CFA Charter

CFA Program
–Curriculum –Exam Format

√ √ √

Candidate Resources
–Comparing Study Approaches –Review Course Providers –Society Resources

Beyond the Charter
–CFA Institute –CFA Society of Columbus

CFA Institute
CFA Institute
–Charlottesville, VA headquarters –Centre for Financial Market Integrity –Ethical and professional standard setter –Certificate in Investment Performance Measurement (CIPM)

Professional Development
–Reciprocity arrangements –Publications and periodicals –Voluntary PD Program

Global Network
–135 Societies in 56 Nations –95,000 members worldwide

Maintain Your CFA Charter

CFA Society of Columbus
Local Member Society of CFA Institute Purpose Provide a forum for local investment management professionals to gather to
–attend investment related presentations –share ideas and –develop their knowledge of the securities markets

Mission Promote the continuing education of our members by providing a forum for the presentation of topics relevant to the decision making process and to promote adherence to the CFA Institute Code of Ethics and Standards of Professional Conduct.

CFA Society of Columbus
Membership Overview
–196 Candidates in June ‘07 –350 Members –81% CFA Charterholders
–www.CFAColumbus.org

Membership Options
–Regular Member –Affiliate Member –Student Member
–www.CFAInstitute.org/memservices/join –Contact Royce West, westr@strsoh.org

Engaging Events
Impact of Subprime on Fixed Income Markets
–November 8, 2007

Prediction Using Everyday Economic Statistics
–December 10, 2007

Searching for a Hedge Fund Bubble
–May 8, 2008
www.CFAColumbus.org

Diverse Employers
Em ployer Size

1 to 10 1,000 +

11 to 50 501 to 1,000 251 to 500 101 to 250 51 to 100

Em ployer Class
Broker Consultant Non Financial Bank Govt Insurance

Fund W ealth Mgmt Institutional Pensio

Educated Membership
Highest Academic Degree Earned

Bachelors

Post-Graduate

No degree

Doctorate

Other Professional Designations
Other Financial Planner Accountant None

Risk Management

Actuary

Member Responsibilities
Assets Under M anagem ent
NA 250B + 0 -- 250M 250M -- 1B

1B -- 5B

50B -- 250B

5B -- 50B

Practice Areas
Compliance Private Equity Derivatives Trading W ealth Mgmt Risk Mgmt Fixed Income Equity Other

Portfolio Mgmt

Next Steps
Enroll and Register as Candidate
–CFAInstitute.org/CFAprog

Draft Study Plan
–CFAInstitute.org/CFAprog/resources/

Consider Provider Resources
–CFAColumbus.org –Stalla.com

Join CFA Institute and Local Society
–CFAInstitute.org/memservices/join

Prepare to Pass the CFA Program

Summary
CFA Charter is valuable CFA program is rigorous Success requires diligence Invest in available resources
–Personal commitment –Curriculum content –Review course –Membership

Symbol of Integrity and Professional Excellence