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SO YOU WANNA BE A CFA  …

SO YOU WANNA BE A CFA  …. An Introduction to the CFA  Exam – Preparation, Time Commitment, and Benefits The Investment Analysts Society of Chicago October 30, 2001. AGENDA. Introduction & History – purpose & how it all started Structure & Requirements – what the program entails

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SO YOU WANNA BE A CFA  …

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  1. SO YOU WANNA BE A CFA … An Introduction to the CFAExam – Preparation, Time Commitment, and Benefits The Investment Analysts Society of Chicago October 30, 2001

  2. AGENDA • Introduction & History – purpose & how it all started • Structure & Requirements – what the program entails • Preparation Involved – how much time & what involved • Topics Covered – what subjects are necessary to know • Demographics of Candidates – who are they? • Benefits of the CFA Designation – money, reputation, and continuing education • Careers & Salary Analysis – what the market is paying

  3. AGENDA • Introduction & History – purpose & how it all started • Structure & Requirements – what the program entails • Preparation Involved – how much time & what involved • Topics Covered – what subjects are necessary to know • Demographics of Candidates – who are they? • Benefits of the CFA Designation – money, reputation, and continuing education • Careers & Salary Analysis – what the market is paying

  4. INTRODUCTION & HISTORY • Purpose of the exam is to establish standards of competency and integrity. • Exam is designed to reinforce fundamental knowledge of investment principles. • Encompasses cutting-edge topics of today (if the topic is current, it will show up in the exam). • Focus on ethics & thus, upholding the highest standards of ethical responsibility. • Not an exam for a specialist, but supplements the specialist’s “general” knowledge

  5. INTRODUCTION & HISTORY • History – • Program first administered in June, 1963 • 268 security analysts emerged as first class of CFAs • Today – • As many as 80,000 candidates to register for the June, 2002 exam. • Nearly 400,000 CFA exams administered • More than 35,000 investment professionals have earned right to use the charter (to have the letters CFA after your name)

  6. AGENDA • Introduction & History – purpose & how it all started • Structure & Requirements – what the program entails • Preparation Involved – how much time & what involved • Topics Covered – what subjects are necessary to know • Demographics of Candidates – who are they? • Benefits of the CFA Designation – money, reputation, and continuing education • Careers & Salary Analysis – what the market is paying

  7. STRUCTURE OF PROGRAM • Divided into 3 Levels – Level I, II, and III • You may sit for 1 examination each year. • Exam usually offered either the last Saturday in May or first Saturday in June. • You must pass each level sequentially in order to take the next level. If you fail one level, then must re-take the exam the following year. • Minimum completion time is 3 years, maximum is 7 years.

  8. STRUCTURE OF PROGRAM • Level I – Multiple Choice • Level II – 50% Short Answer / 50% Essay • Level III – 50% Short Answer / 50% Essay • Self-Study Curriculum – • Pro – flexible enough for the busy professional. • Con – The exam is self-study.

  9. PASS RATES

  10. REQUIREMENTS OF DESIGNATION • Completion of all 3 Levels only one part to receiving the CFA Designation. • Must have at least 3 years of relevant work experience within investment analysis by the time you finish Level III. • Must have completed a Bachelors Degree in order to sit for the exam. • Must apply for membership in AIMR and an AIMR Member Society/Chapter. • And must meet professional conduct requirements (you have no crimes or skeletons in the closet)

  11. AGENDA • Introduction & History – purpose & how it all started • Structure & Requirements – what the program entails • Preparation Involved – how much time & what involved • Topics Covered – what subjects are necessary to know • Demographics of Candidates – who are they? • Benefits of the CFA Designation – money, reputation, and continuing education • Careers & Salary Analysis – what the market is paying

  12. PREPARATION • ON AVERAGE, each level of the Program calls for 250-300 hours of exam preparation. Can vary due to “self-study” nature of the exam. • Reading assignments compose the core of the study program and are the basis for the exam questions. • Reading assignments are from both textbooks other readings that are necessary for taking the exam. These must be purchased as part of the preparation for the exam.

  13. PREPARATION • Upon enrolling into the program, you will receive a comprehensive study guide detailing Learning Outcome Statements (LOS) – or specific subtopics that you are required to know for the exam. • The study guide is divided into study sessions that list the required readings and learning outcomes for each reading. • Textbooks and Readings are required purchases for the exam.

  14. PREPARATION • Review Courses, such as BeckerConviser / Stalla, are available to facilitate the learning process. • But they are not a substitute to preparing for the exam. • The best ingredients for successful preparation – • Mental focus & determination • Regular scheduled studying • Studying the assigned reading per LOS • And if it helps, taking review courses & getting involved in study groups.

  15. AGENDA • Introduction & History – purpose & how it all started • Structure & Requirements – what the program entails • Preparation Involved – how much time & what involved • Topics Covered – what subjects are necessary to know • Demographics of Candidates – who are they? • Benefits of the CFA Designation – money, reputation, and continuing education • Careers & Salary Analysis – what the market is paying

  16. TOPICS COVERED ON EXAM • The CFA Program’s Body of Knowledge includes – • Ethics & Professional Standards • Quantitative Methods • Economics • Financial Statement Analysis • Corporate Finance • Analysis of Debt Investments • Analysis of Equity Investments • Derivatives • Alternative Investments • Portfolio Management • Performance Measurement

  17. % BREAKDOWN OF COURSE STUDY

  18. CALCULATOR POLICY • Due to programming functions available for “formulas” – only 2 calculators are permitted to be used – • Texas Instruments BA II Plus • Hewlett Packard 12C • Proctors instructed to confiscate unauthorized calculators.

  19. AGENDA • Introduction & History – purpose & how it all started • Structure & Requirements – what the program entails • Preparation Involved – how much time & what involved • Topics Covered – what subjects are necessary to know • Demographics of Candidates – who are they? • Benefits of the CFA Designation – money, reputation, and continuing education • Careers & Salary Analysis – what the market is paying

  20. CFA CANDIDATEAGE PROFILE

  21. CFA CANDIDATEGEOGRAPHIC PROFILE

  22. CFA CANDIDATEGROWTH

  23. CFA CANDIDATEGLOBAL GROWTH

  24. CFA CANDIDATEEMPLOYMENT PROFILE

  25. AGENDA • Introduction & History – purpose & how it all started • Structure & Requirements – what the program entails • Preparation Involved – how much time & what involved • Topics Covered – what subjects are necessary to know • Demographics of Candidates – who are they? • Benefits of the CFA Designation – money, reputation, and continuing education • Careers & Salary Analysis – what the market is paying

  26. BENEFITS OF CFA DESIGNATION • Symbol of professional excellence, and as a result… • A primary qualification for senior level investment positions (and most analysts positions as well). • Frequently backed and financially sponsored by employers. • Global Acceptance – • In fact, in some parts of Asia, this is a way of keeping their financial system “clean” and “self-regulated” – something they have a hard time regulating themselves. • Membership into AIMR and local CFA Societies require the CFA. Bottom Line? Networking and Continuing Education access.

  27. THE IASC • The Investment Analysts Society of Chicago (IASC) – • Oldest CFA Society founded in 1925. • Also most prestigious with the history in finance that many of our members created.

  28. BENEFITS OF IASC MEMBERSHIP • Weekly luncheon meetings providing interesting speakers, networking, and most importantly, lunch… • Education & Career Development programs – new intellectual capital that can be used in practice. • Committee Involvement – there are several committees you can participate on to network and make a difference. • Jobs Listings – www.tiasc.org - and the site is also another way to network with the Society.

  29. AGENDA • Introduction & History – purpose & how it all started • Structure & Requirements – what the program entails • Preparation Involved – how much time & what involved • Topics Covered – what subjects are necessary to know • Demographics of Candidates – who are they? • Benefits of the CFA Designation – money, reputation, and continuing education • Careers & Salary Analysis – what the market is paying

  30. COMMON OCCUPATIONS OF CFAs • CEO / Principal • Chief Investment Officer • Equity Analyst • Fixed Income Analyst • Investment Banker • Investment Counselor • Investment Firm Manager • Portfolio Manager • Portfolio Strategist • Sales / Marketing Professional

  31. EMPLOYERSWITH LARGEST # OF CFAs • ABN Amro • American Express Financial • Bank of America • Bear, Stearns & Company • CIBC World Markets • Donaldson, Lufkin, & Jenrette • Chase J.P. Morgan • Lehman Brothers • Loomis, Sayles & Company • Merrill Lynch • Morgan Stanley Dean Witter • Nesbitt Burns • PaineWebber • Putnam Investment Management • RBC Dominion Securities • Salomon Smith Barney • Standish, Ayer & Wood, Inc. • State Street Global Advisors • UBS Asset Management • Wellington Management

  32. CAREER & MONEY BENEFITS • Definite correlation between high base salaries / bonuses with those individuals having the CFA and approximately 6 years of relevant experience. • Supported by 1999 study by HQ Search where 230 equity analysts and 60 mutual fund analysts working for 55 different Chicago-based investment companies, banks and consultants. • Also supported by 1999 Russell Reynolds national survey. • The CFA credential provides better career opportunities and not just in investment management. • Investment bankers, bankers and other financial managers value a CFA.

  33. CAREER & MONEY BENEFITS • Chicago as a financial hub – Growing money management industry base and thus, job prospects increasing – this is due to – • 1999 exodus of Chicago-based firms left numerous Chicagoans extremely wealthy from their sell-out provisions. • September 11 effect encouraging financial firms to diversify their locations.

  34. APPENDIX

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