So you're trying to become a Chartered Financial Analyst (CFA) or thinking of committing to the program. Do you think that getting your CFA means the end of your commitment to studying? Guess again. In an attempt to support the charter, the CFA Institute encourages and expects charterholders to stay abreast of market initiatives.

Like Certified Public Accountants (CPAs), CFAs are encouraged to volunteer for continuing education (CE) credits as part of their CFA obligations. In addition, the CFA Institute has certifications for after the CFA, such as the Certificate in Investment Performance Measurement (CIPM). Clearly, becoming a CFA charterholder is not the end of the road. Read on to learn about the continuing education requirements that CFAs must fulfill as well as the options available for pursuing further study.

CFA Requirements
CFAs are highly regarded for the body of knowledge they must master to pass the three grueling exams that lead to a CFA designation. These exams require expert understanding of the CFA Candidate Body of Knowledge (CBOK), which includes:

  • Ethical and Professional Standards
  • Quantitative Methods
  • Economics
  • Financial Reporting and Analysis
  • Corporate Finance
  • Equity Investments
  • Fixed Income
  • Derivatives
  • Alternative Investments
  • Portfolio Management
  • Wealth Planning

Mastery of these subject areas is designed to provide candidates with the tools and skills specific to the investment and investment management industries. The program, which takes most candidates four years to finish, is becoming the de facto credential necessary for senior advancement in many investment careers.

Commitment To Education
Continuing Education Credits
Although having the CFA designation is enough to prepare candidates for positions within the investing community, the nonprofit CFA Institute is supporting the designation and attracting additional membership by convincing charterholders of the benefits of continuing education. In addition to producing an array of industry-supported events, educational opportunities and publications, the Institute has devised a volunteer-based education program that recommends that members complete a minimum of 20 hours of CE activities, including of a minimum of two hours of standards, ethics and regulatory education each calendar year. Members have autonomy over the activities they engage in as long as they follow two broad requirements:

  1. The activity should be educational in nature and geared toward increasing the knowledge, skills and abilities of an investment professional.
  2. The educational content should relate to one or more of the Topics for Investment Professionals (TIPs) or a topic that a member deems individually relevant for his or her unique professional responsibilities.

Members receive credit for their continuing education by keeping a CE journal and then receive recognition for meeting annual milestones in their programs. To allow flexibility in the design of the CE program, the Institute sponsors preapproved webcasts, publications and events that can be used to obtain credit. In addition, preapproved providers of educational programs are available and can be found on the CFA website.

Here is a sampling of ways that CE credits can be obtained (credits are either previously assigned or obtained as 1 hour = 1 CE credit):

  • Completing a university course - 20 credits
  • Earning a designation/certification in addition to the CFA charter - 20 credits
  • Generalist readings (books, articles, etc.) - 2 minutes per page
  • Highly technical/specialized readings (books, articles, etc.) - 4 minutes per page

Reaching milestones in the program demonstrates a member's commitment to continuing education and to staying abreast of new initiatives and issues in the investment industry. A commitment to continuing education can also be used as part of career development to convince employers of an individual's ability to gain new skills and knowledge, thus adding additional value to the organization. The CFA Institute recognizes these milestones by providing certificates signifying program completion and by publishing the names of CE members in CFA publications.

The CFA membership has agreed that there is a risk that the knowledge gained from taking the CFA exams can become stale as time passes, the CFA curriculum evolves and new ideas and initiatives in the marketplace become more significant. According the CFA Institute, "The competitive nature of the profession requires constant upkeep. Ongoing development shows clients and employers your commitment to the profession, your job and to them - increasing your value in measurable ways."

Local Analyst Societies
In addition to the CE program, The CFA Institute supports the designation and its value to the investment community in several other ways. Local analyst societies have been an important means of championing the designation within the U.S. and abroad. Most members, in addition to becoming members of the CFA Institute, pay an annual fee to become members of their local societies. The societies provide support for CFA candidates attempting to pass the exams as well as for members wishing to stay on top of issues confronting the industry.

These local societies often sponsor speakers at periodic luncheons that present information valuable to investment professionals. In addition to offering excellent networking opportunities, these luncheons also support the membership's commitment to staying on top of current events in the investment industry. The luncheons are usually offered free to paying members and are also available to nonmembers at a nominal charge. People interested in attending these educational opportunities should contact their local analyst society for an event calendar.

CIPM Program
The CFA Institute has also created the Certificate in Investment Performance Measurement (CIPM) program, a certification designed to train qualified investment performance professionals to meet an ever-growing industry need for ethical and experienced individuals. The Institute, which has been a standard-bearer for information transparency within the investment industry and a leader in advocating and introducing performance and ethical standards such as the Global Investment Performance Standards (GIPS), has created this designation in a response to issues and needs in the subcategory of performance measurement. The program has three distinct goals:

  1. Professionalize the field of investment performance evaluation and presentation
  2. Improve practitioners' proficiency in applying analytical techniques and GIPS standards
  3. Recognize individuals who attain the highest achievement in the field

In order to qualify for taking the two exams necessary to obtain the new designation, candidates must pass experience requirements within a performance-measurement capacity in the investment industry (CFA charter holders are exempt from these requirements).

These exams, which are expected to take about 50 hours of study each, are designed to train already-experienced professionals in the new standards and initiatives facing performance measurement. Members in the CIPM association are also required to follow a code of ethical standards that mirrors that of the CFA designation. Once again, the idea is to create experts within an industry that was bereft of any specific certification before the CIPM. Many candidates sitting for the exams are CFAs looking to add additional value to their employers and to gain an edge over others on similar career tracks.

The Bottom Line
Considering the CFA Institute's commitment to continuing education and the concurrence by most CFAs that continued study is a key component of their career growth and their value to the investment community, it is clear that continuing education of some sort is in the future of everyone that expects to use their CFA within the investment-management industry. Whether it be as part of the CE program, outside study or in pursuit of a new designation, it seems clear that industry participants value knowledge of current initiatives and issues confronting the industry. A

s for the CFA Institute, according to its website, its expectations are that "in order to sustain the market reputation of the charter, the CFA Institute requires members to be the most informed members of their profession by continually staying on top of readily accessible information provided by the marketplace."

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