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SO YOU WANNA BE A CFA  …. An Introduction to the CFA  Exam – Preparation, Time Commitment, and Benefits The Investment Analysts Society of Chicago October 30, 2001. AGENDA. Introduction & History – purpose & how it all started Structure & Requirements – what the program entails

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so you wanna be a cfa

SO YOU WANNA BE A CFA …

An Introduction to the CFAExam –

Preparation, Time Commitment, and Benefits

The Investment Analysts Society of Chicago

October 30, 2001

agenda
AGENDA
  • Introduction & History – purpose & how it all started
  • Structure & Requirements – what the program entails
  • Preparation Involved – how much time & what involved
  • Topics Covered – what subjects are necessary to know
  • Demographics of Candidates – who are they?
  • Benefits of the CFA Designation – money, reputation, and continuing education
  • Careers & Salary Analysis – what the market is paying
agenda3
AGENDA
  • Introduction & History – purpose & how it all started
  • Structure & Requirements – what the program entails
  • Preparation Involved – how much time & what involved
  • Topics Covered – what subjects are necessary to know
  • Demographics of Candidates – who are they?
  • Benefits of the CFA Designation – money, reputation, and continuing education
  • Careers & Salary Analysis – what the market is paying
introduction history
INTRODUCTION & HISTORY
  • Purpose of the exam is to establish standards of competency and integrity.
  • Exam is designed to reinforce fundamental knowledge of investment principles.
  • Encompasses cutting-edge topics of today (if the topic is current, it will show up in the exam).
  • Focus on ethics & thus, upholding the highest standards of ethical responsibility.
  • Not an exam for a specialist, but supplements the specialist’s “general” knowledge
introduction history5
INTRODUCTION & HISTORY
  • History –
    • Program first administered in June, 1963
    • 268 security analysts emerged as first class of CFAs
  • Today –
    • As many as 80,000 candidates to register for the June, 2002 exam.
    • Nearly 400,000 CFA exams administered
    • More than 35,000 investment professionals have earned right to use the charter (to have the letters CFA after your name)
agenda6
AGENDA
  • Introduction & History – purpose & how it all started
  • Structure & Requirements – what the program entails
  • Preparation Involved – how much time & what involved
  • Topics Covered – what subjects are necessary to know
  • Demographics of Candidates – who are they?
  • Benefits of the CFA Designation – money, reputation, and continuing education
  • Careers & Salary Analysis – what the market is paying
structure of program
STRUCTURE OF PROGRAM
  • Divided into 3 Levels – Level I, II, and III
    • You may sit for 1 examination each year.
    • Exam usually offered either the last Saturday in May or first Saturday in June.
    • You must pass each level sequentially in order to take the next level. If you fail one level, then must re-take the exam the following year.
    • Minimum completion time is 3 years, maximum is 7 years.
structure of program8
STRUCTURE OF PROGRAM
  • Level I – Multiple Choice
  • Level II – 50% Short Answer / 50% Essay
  • Level III – 50% Short Answer / 50% Essay
  • Self-Study Curriculum –
    • Pro – flexible enough for the busy professional.
    • Con – The exam is self-study.
requirements of designation
REQUIREMENTS OF DESIGNATION
  • Completion of all 3 Levels only one part to receiving the CFA Designation.
  • Must have at least 3 years of relevant work experience within investment analysis by the time you finish Level III.
  • Must have completed a Bachelors Degree in order to sit for the exam.
  • Must apply for membership in AIMR and an AIMR Member Society/Chapter.
  • And must meet professional conduct requirements (you have no crimes or skeletons in the closet)
agenda11
AGENDA
  • Introduction & History – purpose & how it all started
  • Structure & Requirements – what the program entails
  • Preparation Involved – how much time & what involved
  • Topics Covered – what subjects are necessary to know
  • Demographics of Candidates – who are they?
  • Benefits of the CFA Designation – money, reputation, and continuing education
  • Careers & Salary Analysis – what the market is paying
preparation
PREPARATION
  • ON AVERAGE, each level of the Program calls for 250-300 hours of exam preparation. Can vary due to “self-study” nature of the exam.
  • Reading assignments compose the core of the study program and are the basis for the exam questions.
  • Reading assignments are from both textbooks other readings that are necessary for taking the exam. These must be purchased as part of the preparation for the exam.
preparation13
PREPARATION
  • Upon enrolling into the program, you will receive a comprehensive study guide detailing Learning Outcome Statements (LOS) – or specific subtopics that you are required to know for the exam.
  • The study guide is divided into study sessions that list the required readings and learning outcomes for each reading.
  • Textbooks and Readings are required purchases for the exam.
preparation14
PREPARATION
  • Review Courses, such as BeckerConviser / Stalla, are available to facilitate the learning process.
  • But they are not a substitute to preparing for the exam.
  • The best ingredients for successful preparation –
    • Mental focus & determination
    • Regular scheduled studying
    • Studying the assigned reading per LOS
    • And if it helps, taking review courses & getting involved in study groups.
agenda15
AGENDA
  • Introduction & History – purpose & how it all started
  • Structure & Requirements – what the program entails
  • Preparation Involved – how much time & what involved
  • Topics Covered – what subjects are necessary to know
  • Demographics of Candidates – who are they?
  • Benefits of the CFA Designation – money, reputation, and continuing education
  • Careers & Salary Analysis – what the market is paying
topics covered on exam
TOPICS COVERED ON EXAM
  • The CFA Program’s Body of Knowledge includes –
    • Ethics & Professional Standards
    • Quantitative Methods
    • Economics
    • Financial Statement Analysis
    • Corporate Finance
    • Analysis of Debt Investments
    • Analysis of Equity Investments
    • Derivatives
    • Alternative Investments
    • Portfolio Management
    • Performance Measurement
calculator policy
CALCULATOR POLICY
  • Due to programming functions available for “formulas” – only 2 calculators are permitted to be used –
    • Texas Instruments BA II Plus
    • Hewlett Packard 12C
  • Proctors instructed to confiscate unauthorized calculators.
agenda19
AGENDA
  • Introduction & History – purpose & how it all started
  • Structure & Requirements – what the program entails
  • Preparation Involved – how much time & what involved
  • Topics Covered – what subjects are necessary to know
  • Demographics of Candidates – who are they?
  • Benefits of the CFA Designation – money, reputation, and continuing education
  • Careers & Salary Analysis – what the market is paying
agenda25
AGENDA
  • Introduction & History – purpose & how it all started
  • Structure & Requirements – what the program entails
  • Preparation Involved – how much time & what involved
  • Topics Covered – what subjects are necessary to know
  • Demographics of Candidates – who are they?
  • Benefits of the CFA Designation – money, reputation, and continuing education
  • Careers & Salary Analysis – what the market is paying
benefits of cfa designation
BENEFITS OF CFA DESIGNATION
  • Symbol of professional excellence, and as a result…
    • A primary qualification for senior level investment positions (and most analysts positions as well).
    • Frequently backed and financially sponsored by employers.
  • Global Acceptance –
    • In fact, in some parts of Asia, this is a way of keeping their financial system “clean” and “self-regulated” – something they have a hard time regulating themselves.
  • Membership into AIMR and local CFA Societies require the CFA. Bottom Line? Networking and Continuing Education access.
the iasc
THE IASC
  • The Investment Analysts Society of Chicago (IASC) –
  • Oldest CFA Society founded in 1925.
  • Also most prestigious with the history in finance that many of our members created.
benefits of iasc membership
BENEFITS OF IASC MEMBERSHIP
  • Weekly luncheon meetings providing interesting speakers, networking, and most importantly, lunch…
  • Education & Career Development programs – new intellectual capital that can be used in practice.
  • Committee Involvement – there are several committees you can participate on to network and make a difference.
  • Jobs Listings – www.tiasc.org - and the site is also another way to network with the Society.
agenda29
AGENDA
  • Introduction & History – purpose & how it all started
  • Structure & Requirements – what the program entails
  • Preparation Involved – how much time & what involved
  • Topics Covered – what subjects are necessary to know
  • Demographics of Candidates – who are they?
  • Benefits of the CFA Designation – money, reputation, and continuing education
  • Careers & Salary Analysis – what the market is paying
common occupations of cfas
COMMON OCCUPATIONS OF CFAs
  • CEO / Principal
  • Chief Investment Officer
  • Equity Analyst
  • Fixed Income Analyst
  • Investment Banker
  • Investment Counselor
  • Investment Firm Manager
  • Portfolio Manager
  • Portfolio Strategist
  • Sales / Marketing Professional
employers with largest of cfas
EMPLOYERSWITH LARGEST # OF CFAs
  • ABN Amro
  • American Express Financial
  • Bank of America
  • Bear, Stearns & Company
  • CIBC World Markets
  • Donaldson, Lufkin, & Jenrette
  • Chase J.P. Morgan
  • Lehman Brothers
  • Loomis, Sayles & Company
  • Merrill Lynch
  • Morgan Stanley Dean Witter
  • Nesbitt Burns
  • PaineWebber
  • Putnam Investment Management
  • RBC Dominion Securities
  • Salomon Smith Barney
  • Standish, Ayer & Wood, Inc.
  • State Street Global Advisors
  • UBS Asset Management
  • Wellington Management
career money benefits
CAREER & MONEY BENEFITS
  • Definite correlation between high base salaries / bonuses with those individuals having the CFA and approximately 6 years of relevant experience.
    • Supported by 1999 study by HQ Search where 230 equity analysts and 60 mutual fund analysts working for 55 different Chicago-based investment companies, banks and consultants.
    • Also supported by 1999 Russell Reynolds national survey.
  • The CFA credential provides better career opportunities and not just in investment management.
    • Investment bankers, bankers and other financial managers value a CFA.
career money benefits33
CAREER & MONEY BENEFITS
  • Chicago as a financial hub – Growing money management industry base and thus, job prospects increasing – this is due to –
    • 1999 exodus of Chicago-based firms left numerous Chicagoans extremely wealthy from their sell-out provisions.
    • September 11 effect encouraging financial firms to diversify their locations.
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