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The CFA ® Program Philip J. Young, Ph.D., CFA ----- College of Business & Public Affairs Career Day March 2005 The CFA ® Program

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the cfa program

The CFA® Program

Philip J. Young, Ph.D., CFA

-----

College of Business & Public Affairs

Career Day

March 2005

CFA Institute

the cfa program2

The CFA® Program

A self-study, distance learning-based program that takes a generalist approach to security analysis and portfolio management and emphasizes the highest ethical and professional standards.

CFA Institute

member and candidate growth
Member and Candidate Growth

Note: CFA Candidates as of 15 September 2004

CFA Institute

the cfa charter growing non us numbers
The CFA CharterGrowing Non-US Numbers

.

Other = Latin America, Africa, & Middle East

CFA Institute

the cfa program5
The CFA® Program

CCC

COE

CURRICULUM

EXAMINATIONS

GRADING

BODY OF

KNOWLEDGE

Practitioners at every step of the process

MINIMUM PASSING

SCORE (MPS)

JOB ANALYSIS

CFA Institute

job analysis
Job Analysis

CCC

COE

CURRICULUM

EXAMINATIONS

GRADING

BODY OF

KNOWLEDGE

Practitioners at every step of the process

MINIMUM PASSING

SCORE (MPS)

JOB ANALYSIS

CFA Institute

job analysis7
Job Analysis
  • Determines topics taught in the CFA Program
  • Conducted every five years: next in 2005-2006
  • Involves investment practitioners worldwide: Regional Expert Panels and member surveys
  • What knowledge and skills are expected of a candidate for an entry-level position?

CFA Institute

body of knowledge
Body of Knowledge

CCC

COE

CURRICULUM

EXAMINATIONS

GRADING

BODY OF

KNOWLEDGE

Practitioners at every step of the process

MINIMUM PASSING

SCORE (MPS)

JOB ANALYSIS

CFA Institute

body of knowledge9

Body of Knowledge

  • Ethical and Professional Standards
  • Quantitative Methods
  • Economics
  • Financial Statement Analysis
  • Corporate Finance

InvestmentTools

  • Analysis of Equity Investments
  • Analysis of Debt Investments
  • Analysis of Derivatives
  • Analysis of Alternative Investments

Asset Valuation

  • Portfolio Management

CFA Institute

curriculum
Curriculum

CCC

COE

CURRICULUM

EXAMINATIONS

GRADING

BODY OF

KNOWLEDGE

Practitioners at every step of the process

MINIMUM PASSING

SCORE (MPS)

JOBANALYSIS

CFA Institute

curriculum11

Developed by Candidate Curriculum Committee CCC); over 130 people involved world wide; extensive review; each level consists of 18 study sessions in CFA Institute-produced study guides

Curriculum

CFA Institute

slide12

Curriculum

  • Readings are drawn from a variety of materials, both CFA Institute-developed and other
  • Each reading has learning outcome statements (LOS): “The candidate should be able to…”
  • Each LOS has one or more command words, which indicate type of learning expected: “discuss, calculate, contrast”
  • LOS are NOT a proxy for examination questions, but ARE the best guide for candidate study

CFA Institute

curriculum13
Curriculum

2004 Exam

2005 Exam

2003 Exam

CFA Institute

slide14

Study Requirements

Estimated minimum study time required per Level

  • Level I – 15 hrs per week for 18 weeks
  • Level II – 15 hrs per week for 18 weeks
  • Level III – 15 hrs per week for 18 weeks
  • Suggest one week of study per study session through late April to allow the final month for review.

CFA Institute

examinations
Examinations

CCC

COE

CURRICULUM

EXAMINATIONS

BODY OF

KNOWLEDGE

GRADING

Practitioners at every step of the process

MINIMUM PASSING

SCORE (MPS)

JOB ANALYSIS

CFA Institute

examinations16

Examinations

Based on assigned readings and LOS; over 50 people involved; each exam is six hours in length

CFA Institute

examinations17

Examinations

2005 Examination dates

  • Level I, II & III
    • June 4
    • June 5 - Eastern Asia & Oceania

Level I only

December 3

December 4 - Eastern Asia & Oceania

CFA Institute

grading
Grading

CCC

COE

CURRICULUM

EXAMINATIONS

GRADING

BODY OF

KNOWLEDGE

Practitioners at every step of the process

MINIMUM PASSING

SCORE (MPS)

JOBANALYSIS

CFA Institute

grading19

Grading

Guiding philosophy – fairness and consistency

CFA Institute

minimum passing score
Minimum Passing Score

CCC

COE

CURRICULUM

EXAMINATIONS

GRADING

BODY OF

KNOWLEDGE

MINIMUM PASSING

SCORE (MPS)

JOB ANALYSIS

Practitioners at every step of the process

CFA Institute

minimum passing score21
Minimum Passing Score
  • MPS for each level established by CFA Institute Board of Governors
  • 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

CFA Institute

candidate performance
Candidate Performance

Candidates 2004 (June + December)

Level I = 43,777

Level II = 23,896

Level III = 13,452

CFA Institute

declining pass rates why
Declining Pass Rates – Why?
  • Decline in candidate preparation – 57% of Level I candidates studied < 200 hours
  • Fewer candidates indicate they are using the assigned curriculum – nearly 75% of candidates relied mainly on review courses or study notes and only 29% of Level I candidates purchased some or all of the assigned readings
  • Prep courses and study notes should be used as a supplement, not a substitute for the assigned readings

CFA Institute

candidate progress
Candidate Progress

For every 100 candidates that entered the CFA Program:

In 1996

22 candidates had earned their charters within 5 years

In 1985

27 candidates had earned their charters within 5 years

Successful candidates average 4 years in the program.

CFA Institute

the cfa program25
The CFA® Program

CCC

COE

CURRICULUM

EXAMINATIONS

GRADING

BODY OF

KNOWLEDGE

MINIMUM PASSING

SCORE (MPS)

Practitioners at every step of the process

JOB ANALYSIS

CFA Institute

slide26

CFA® Charter Benefits

  • Knowledge across core areas of the investment industry
  • Respect and credibility in the investment community
  • Career opportunities in a competitive environment
  • Accepted global and portable standard of competence and integrity

CFA Institute

earning power the cfa premium
Earning Power - The CFA Premium

The CFA Premium: US$40,000

$203,000

$163,000

Median Total Compensation for CFA Institute

members with 10+ years experience

Source: 2003 Compensation Survey

CFA Institute

cfa charter requirements

CFA® Charter Requirements

  • Sequentially pass Level I, II, and III exams
  • Have 4 years of professional experience
  • Provide professional references (Level III)
  • Submit professional conduct statement
  • Apply for membership in CFA Institute and a local analysts’ society

CFA Institute

online registration
Online Registration

Candidates may now register online at www.cfainstitute.org/cfaprogram

CFA Institute

cfa program costs

CFA® Program Costs

Estimated Basic Costs for Level I (all amounts USD)

  • Registration Fee to Enter CFA® Program $375
  • Enrollment Fee for Level I Examination $360 Required Fees $735*
  • Study Materials for Level I:

Study Guide Free

CFA Institute Publications $268

Primary Textbooks $427**

Approximate Total Costs for Level I $1,430

*Assumes Registration and Enrollment received by 15 September 2004

**Sharing textbooks can reduce costs

CFA Institute

2005 registration deadlines

2005 Registration Deadlines

May/June administration

Received byRequired Fees*

15 September 2004 $735

15 February 2005 $815

15 March 2005 $1,120

Final Deadline: All forms must be received by CFA Institute on or before 15 March 2005

*Includes registration fee that candidates pay only when first entering the CFA Program

CFA Institute

the cfa program33
The CFA® Program

CFA Institute

the cfa program34

The CFA® Program

www.cfainstitute.org

Information Central

Click on “CFA® Program”

CFA Institute

560 Ray C Hunt Drive

PO Box 3668

Charlottesville, VA 22903

USA

Telephone: (434) 951-5499

800-247-8132

Fax: (434) 951-5265

E-mail: info@cfainstitute.org

CFA Institute