The CFA Institute now offers a third program, apart from the Chartered Financial Analyst (CFA) designation – the gold standard for professionals involved in investment decision-making – and the Certificate in Investment Performance Measurement (CIPM). This new program, the Claritas Investment Certificate, was launched on May 20, 2013, at the 66th CFA Institute Annual Conference in Singapore. The program was developed by the CFA Institute over a two-year period as part of a global call to action for industry participants to play a role in addressing the overall lack of trust in financial services, following the worldwide financial crisis of 2008-09. The CFA Institute expects that the knowledge acquired by candidates who have obtained the Claritas Investment Certificate will help to shape a more trustworthy financial industry by setting a new standard for education and ethics that is applicable internationally.

What is the Claritas Investment Certificate program?
The Claritas Investment Certificate program is aimed at anyone working in the financial services sector. It is a foundation level program with the objective of providing a clear understanding of investment industry basics, and one’s role and responsibilities as a financial services professional.

The program is an online, self-study course comprising 21 chapters organized into the following seven modules; (approximate exam weightings are shown in parentheses):

  • Module 1 – Industry Overview (5%)
  • Module 2 – Ethics and Regulation (10%)
  • Module 3 – Tools and Inputs (20%)
  • Module 4 – Investment Instruments (20%)
  • Module 5 – Industry Structure (20%)
  • Module 6 – Industry Controls (20%)
  • Module 7 – Serving Client’s Needs (5%)

Time Commitment
The Claritas program is expected to take about 80 to 100 hours of study over a three to six month period.

Individual registration costs US$685, and includes access to all study materials, the exam registration fee, and one exam sitting. The cost can be lowered by as much as US$200 if you work for a large firm that supports the program and register through your employer. Employers and institutions can buy Claritas bulk registration vouchers at a discounted price as follows: 25-99 vouchers US$635 each; 100-249 vouchers US$585 each; and 250 or more vouchers US$485 each.

Study Materials:

  • An eBook that contains the complete Claritas Course of Study and forms the foundation of all exam questions. It can be accessed online, and can be downloaded to as many as four devices (two computers and two mobile devices). The eBook is also available in print through (two volumes at a cost of US$45 each).
  • A study planner – candidates gain access to a personalized planner that can help them assess the time commitment required per chapter, based on the number of days remaining until the scheduled exam date.
  • Chapter review questions and practice questions.
  • A mock exam – this has the same length and topic weightings as the actual Claritas exam.

After registering for the Claritas examination, a candidate must schedule an exam appointment and write the exam within 180 days. The Claritas examination is computer-based and consists of 120 multiple-choice questions to be completed in 120 minutes. The exam is administered at many Pearson VUE test centers around the world. Exam candidates are asked to allow up to 2½ hours at the test center, which includes time to check-in, go through the exam tutorial, review and agree to the Claritas Candidate Pledge, and complete the exam.

How does the Claritas program differ from the CFA?
The Claritas Investment Certificate differs substantially from the CFA in a number of ways, including:

  • Program scope: The CFA program is widely considered to be the investment profession’s most rigorous credentialing program and the “gold standard” for investment management. The Claritas certificate is a foundation-level program that aims to impart an understanding of investment industry fundamentals. While the CFA curriculum is much more in-depth, the Claritas program can be a good way to “test the waters” for those considering enrollment in the CFA program.
  • Different target markets: The Claritas certification is aimed at everyone in the investment industry who helps enable investment decision-making. The CFA program is targeted at those individuals who are directly involved in investment decision-making.
  • Entry requirements: While the Claritas certificate is aimed at support staff in the financial services sector, there are no entry restrictions, and anyone can register for it. In contrast, the entry requirements for the CFA program are quite stringent – the candidate should have a Bachelor’s degree (or be in the final year of a Bachelor’s degree program), or have four years of professional work experience, or have a combined four years of college and professional work experience. Candidates also have to sign a Professional Conduct Statement disclosing if they have been the subject of a written complaint or have been involved in any litigation or investigation for the previous two years.
  • Certificate / charter requirements: Candidates who successfully pass the Claritas exam receive the Claritas Investment Certificate. To become a CFA charterholder, the candidate has to pass all three levels of the CFA program, each of which culminates in a six-hour exam. In addition, the candidate must also possess four years of qualified investment work experience of which at least 50% must be directly involved in making investment decisions.
  • Passing levels: 82% of the 2,408 candidates who took part in the Claritas pilot program successfully passed the exam. The 10-year average pass rate (from 2003 to 2012) for all three levels of the CFA program was 42%; only one in five people who begins the CFA program successfully completes it and becomes a CFA charterholder.
  • Commitment levels: The Claritas program is cheaper and requires a far lower time commitment than the CFA. CFA candidates have to pay a one-time enrollment fee of US$440, as well as an exam registration fee that can range between US$620 and US$1,170, depending on whether the registration is done before the first deadline in September or the final one in March. Each level of the CFA program takes about six months of preparation. While most candidates take between two and five years to complete the program, successful candidates take an average of four years to do so.

Who should enroll in the Claritas program?

  • Professionals working with investment decision makers in support or back-office / front-office functions – operations, administration, IT, human resources, marketing, sales, compliance, customer service.
  • Since there are no restrictions on entry into the program, the Claritas program may be a cost-effective alternative for someone looking to switch fields and get into the financial services industry.
  • It also appears well suited for students who wish to get into entry-level positions in financial services.

The Bottom Line
The Claritas Investment Certificate is likely to find growing acceptance as the new foundation-level education and ethics standard for the financial service sector internationally. While most nations have country-specific credentials for industry personnel involved in areas such as operations and compliance – for example, the Series 99 and Series 14 exams in the U.S. – there are no alternatives at the international level. The fact that 3,300 candidates from 70 companies in 50 countries served as participants in the pilot program that was launched in January 2013 bodes well for its acceptance by large financial firms around the world. The Claritas Investment Certificate’s association with the CFA Institute is also a powerful marketing tool, as 43% of the pilot study participants cited this as one of the top benefits of the program. The Claritas program may also possibly come to be regarded by potential CFA program participants as a useful sprint before embarking on the CFA marathon.

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