CFA designation even more valuable

Jeffrey T. Matthias, director, Society Strategy & Design at the CFA Institute, visited Cayman earlier this year to drum up support from professionals for this highly sought-after qualification. The Journal interviews Matthias as to the relevance of the CFA designation in today’s economy.

Given the current recession do current circumstances make the Chartered Financial Analysts designation even more relevant to industry?

The global financial crisis is challenging for everyone involved with the investment profession including CFA Charterholders.

Fortunately, the rigours of the three CFA exams, adherence to high ethical standards and commitment to professional excellence allows CFA charterholders to standout from the crowd.
By earning the designation, charterholders illustrate their understanding of the leading global investment practices including economics, financial reporting, equity analysis and valuation, fixed income, derivatives, and alternative investments.

Equally important is the commitment by both candidates and charterholders to uphold the CFA Institute Code of Ethics and Standards of Professional Conduct. In brief, CFA charterholders are very competent, ethical, trustworthy, and committed to putting client interests before their own.

These characteristics certainly provide employers, clients, and regulators with a welcome degree of comfort during a very difficult market environment.

Are you finding an increase in interest in the CFA programme as a result of the downturn in the economy?

The December 2008 exam had a record number of candidates tested and enrolments for the June 2009 exam continue to outpace previous enrolments. Due to the timing of the enrolment process, we probably won’t know whether the current economic crisis has impacted enrolments until the December 2009 exam.

Historically, we have seen enrolments increase almost every year since the first exam was given in 1963.

The demand for the credential has increased as employers, clients, and regulators throughout the world have come to recognise the value of the CFA designation.
Many view the CFA credential as a key differentiator when comparing potential employees or potential investment managers.

In fact, they view a CFA charterholder as someone who is both a serious investment professional and committed to a higher standard of excellence and ethics.

What makes this particular qualification relevant for industry professionals right now?

In many ways, the magnitude of the global recession has been exacerbated by severe breaches in ethical and professional conduct. As a result, market participants have lost more than money; they have also lost confidence and trust in the financial system.

Fortunately, CFA charterholders are perfectly suited for the current environment given their skills and commitment to ethics and professionalism.

CFA charterholders are very competent, ethical, trustworthy, and committed to putting client interests before their own. These characteristics certainly provide employers, clients, and regulators with a welcome degree of comfort during a very difficult market environment.

Can investors take special comfort in the fact that their investment advisor is properly qualified in this way?

Yes, the rigours of the three CFA exams, adherence to high ethical standards, and commitment to professional excellence allows CFA charterholders to standout from the crowd. As mentioned above, the CFA exam tests candidates on the leading global practices such as economics, financial reporting, equity analysis and valuation, fixed income, derivatives, and alternative investments.

In addition to passing the three exams, a candidate must also attain four years of qualified work experience before being a awarded the CFA designation. Perhaps most important is the commitment by both candidates and charterholders to uphold the CFA Institute Code of Ethics and Standards of Professional Conduct.
Thus, investors can take comfort in the fact that CFA charterholders are very knowledgeable, competent, ethical, trustworthy, and committed to putting client interests before their own.

How does the CFA designation qualify an individual to make the right decisions in such a tough market?

No one can guarantee that a CFA charterholder will make better or the right decisions. However, clients can be reassured by the following:

The CFA programme teaches that investment professionals should develop an investment policy statement with their client.

The IPS defines the long-term investment goal, appropriate risk tolerance, and time horizon.

During turbulent markets, an IPS helps both the manager and the client to remain focused on the long-term goal and lessens the chance that emotions will drive the investment decision making process in the short-term.

The CFA programme espouses the benefits of investing for the long-term while realising that a few of the client’s goals (e.g. a major purchase such as a primary residence, college education, or medical bills) may be best served by short-term investments.

The CFA programme teaches candidates to analyse an investment opportunity, decision, and/or risk from all angles but still within the perspective of the client’s IPS.

CFA charterholders are committed to adhering to the CFA Institute Code of Ethics which requires the charterholder to put the client’s interest before their own or their firm’s interest.

These characteristics certainly provide employers, clients, and regulators with a welcome degree of comfort that CFA charterholders will make decisions in the best interest of clients during this very difficult market environment.

 

Matth230

Jeffrey T. Matthias: The global financial crisis is challenging for everyone involved with the investment profession including CFA Charterholders. Fortunately, the rigours of the three CFA exams, adherence to high ethical standards, and commitment to professional excellence allows CFA charterholders to standout from the crowd

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