What Is a Certificate in Investment Performance Measurement (CIPM)?
The Certificate in Investment Performance Measurement (CIPM) is a financial credential in investment performance analysis. The CIPM designation develops an individual's skills in risk evaluation, manager selection, and investment reports based on accountability. It is issued by the CFA Institute and has two levels: Level I and Level II.
- The Certificate in Investment Performance Measurement is a financial credential in investment performance analysis issued by the CFA Institute.
- The CIPM signifies a professional's competency in the evaluation of the investment performance of investment firms.
- CIPM holders are certified in discerning different investment reporting methods, and in measuring and evaluating risk.
- Candidates must pass two exam levels, and must maintain continuing education and professional development requirements to pass and keep their designation.
Understanding the Certificate in Investment Performance Measurement (CIPM)
The investment management industry recognized the need for growth in the regulation of investment return assessments. This led to the creation of a series of industry standards used by investment managers which were grouped together under the Global Investment Performance Standards (GIPS). Because of the use of GIPS as a benchmark within the industry, the CFA Institute decided to create the Certificate in Investment Performance Measurement designation as a way of accrediting financial professionals in this field.
The CIPM signifies a professional's competency in the evaluation of the investment performance of investment firms. CIPM holders are certified in discerning different investment reporting methods, and in measuring and evaluating risk. The ultimate goal of the CIPM designation is to make better investment decisions and maximizing investors' value by measuring and disclosing performance results, evaluating investment managers, and assessing investment products. Doing so can often be complex and requires a broad range of skills.
There are no entrance requirements to enter the program, although candidates must have two years of professional experience in a position that involves performance-related activities including:
- Calculating, analyzing, evaluating, or presenting investment results
- Providing consulting, technological, legal/regulatory or accounting services directly in support of such activities
- Verifying compliance with the GIPS standards
- Supervising—directly or indirectly—persons who practice such activities
- Teaching such activities
Alternatively, candidates may have at least four years of professional experience in the investment industry that involves the following:
- Evaluating or applying financial, economic, and/or statistical data as part of the investment decision-making process
- Marketing investment management services
- Monitoring an investment firm’s compliance with applicable laws, regulations, and standards
- Evaluating or recommending investment managers
- Directly or indirectly supervising people who practice the activities set forth above
- Teaching such activities
There are two levels candidates must pass in order to be awarded with the designation. Both the Level I and Level II exams are proctored, close-booked, and last 180 minutes. Candidates must first agree to the CIPM Code of Ethics and Standard of Professional Conduct during the registration process. CFA charterholders and any other candidates who have passed the CFA Level III exam can skip the first level entirely and take the Level II. Accredited members must meet continuing education every three years as well as annual continuing professional development requirements in order to maintain their designation.
CFA charterholders or those who successfully passed the Level III CFA exam can skip the first CIPM exam and write the Level II directly.
The CIPM exam is given twice a year—in March and September. Registration for the March exam generally runs between October 1 and January 31. The testing window runs for two weeks in the middle of March. Registration for the September exam generally opens April 1 and runs until July 31, with the testing window running for two weeks beginning in the middle of September.
Program fees are $475 for early registration and $675 for standard registration. The CIPM Program also offers scholarships to students and faculty participating in its University Affiliation Program.
Level I Exam
Candidates who take the first exam must answer 100 multiple choice questions. It was previously called the principles exam. Those who take the exam are tested on performance measurement, performance attribution, performance appraisal, ethical standards, and GIPS standards and performance presentation. The pass rate for this exam has historically been around the 50%-mark.
Level II Exam
This exam, previously known as the expert exam, has 80 item set questions or 20 different scenarios followed by four multiple choice questions. Topics covered are the same as the first exam, but the weighting is generally different. Pass rates for this exam are also near the 50%-mark.
Benefits of the Certificate in Investment Performance Measurement (CIPM)
Those who hold the CIPM designation adhere to strict ethical standards and generally qualify for highly-specialized positions within the financial services industry and other sectors such as information technology, and marketing. Some of these positions include:
- Performance analyst
- Client and investment manager relationship manager
- Compliance officer
- Sales and marketing professional
- Financial adviser
Similar to people who hold the CFA designation, professionals accredited with the CIPM may be placed ahead of other candidates when being considered for a position. That's because of the time and discipline needed to pass the course, as well as the reputation that comes with the holding the designation.