The CFA Institute has created some new ads, highlighting the difficulty of the achieving the designation. My favorite parts of the ads:

• The Same cheesy pose is struck by both models
• Writing encryption code for a global security network wouldn’t apply under the designation’s required work experience

To a recruiter, nothing pops off the page like a CFA charter. One glance tells clients that your investment management skills are the gold standard of the industry. That you’ve mastered a three-level program whose coursework is unusually rigorous. And that your ethical standards are the highest possible. Isn’t it time you joined the thousands of CFA charterholders who are writing their own ticket?

It’s safe to say that the pursuit of a CFA charter is beyond challenging. The coursework involves a rigorous, three-level program that’s recognized as the gold standard in investment management. If you pass the exams, you’ll have the expertise to take real control of your professional career. That’s because CFA isn’t just something that follows your name. It’s something that builds a following.

See the original ads description and description (Both PDFs).

Tags: CFA
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Although the post is long, it should appeal those considering the CFA designation (My current status is “CFA Charter Pending”, meaning that I have passed each of the three exams, but still have to submit my sponsorship application for the Charter)

Below, you will find my response to a series of questions for an article at BCJobNetwork.com. My answers are in blue.

What made you pursue a career in the finance sector?

The focus during my initial time at university was to create as many options as possible; I saw that people with financial backgrounds move into many different industries, and often transition into leadership roles. Once I began studying finance, I enjoyed the material I was being taught, and I could easily see that the principles taught were applied practically by analysts mentioned everyday in the media.

Why did you choose to further that with a CFA?

Several factors led to the decision. Here they are in rank of priority:

• Strong program reputation – Beyond the widely recognized financial rewards for earning the CFA charter, Charter holders are held in high esteem for their analytical abilities, and strong ethical backgrounds
• Intrinsic educational value – To complete the required coursework, you’ve got to have discipline, and a desire to learn the material. Without a real interest in the material, it would be extremely onerous to stay motivated for 3+ grueling years.
• Ability to work while earning the designation - Early in my career, I wasn’t ready to leave my job to go back to school. The CFA charter was a way to stay learning, and improve my financial credentials.
• Low relative costs - Although textbooks and exam costs are not negligible, relative to most other alternatives (and relative to the rewards of the program), the costs are less than one would expect. Costs are ~3-10% of the costs of an MBA.

What do you like about it?

I like learning the material on my own – being able to set they pace for my own learning. I also appreciate the relevancy of the material. Updated the curriculum (aka Learning Outcome Statements) every year means that textbooks are more expensive, but material stays fresh.

Also, the regional CFA societies offer many great resources – from providing selected conferences, to CFA job boards.

What are your day-to-day responsibilities at IBM?

My title is ‘Financial Management Consultant’. Our consulting organization is organized in a matrix, so my functional area is Financial management, while my industry is Healthcare.

Day to day responsibilities vary depending on what kind of project I’m on, but there are some common themes – I have worked on many healthcare strategy engagements, where we usually have a team of 3-6 consultants, with each consultant specializing in a particular role. A team could include several of the following roles: a project manager, a financial analyst, a data analyst, an architect, a business analyst, and several SME’s (subject matter experts). I would typically serve as the financial or business analyst, and would be responsible for developing financial models, stakeholder engagement materials, risk assessments, current state assessments, and coordinating with other team members for their respective responsibilities.

Our final deliverable is a report that outlines what recommended strategies the client should take – The recommendations are supported by a Current State, Future state, Gap, and Risk analysis. My projects have typically lasted up to 5 months, and I have worked in Ontario, Alberta, BC, and remotely with the US.

The teams are composed of individuals from across Canada, and the world – So I often spend much of the day on the phone, or on IM talking with coworkers. The team will come together every couple of weeks to meet with the client, or coordinate deliverables.

What are your long-term career goals and how are you getting there?

Long Term goals include developing both my people management and technical skills. I’m aiming to create quality work, and build a strong reputation within the industry. Right now, I’m working towards my goals by continuing to work on challenging projects, progressively increasing my level of responsibility within the projects I take, taking leadership roles for internal initiatives, and, most importantly, associating with people that have similar outlooks and expectations from their professional and personal lives.

And then with your education: What major did you have at university?

I graduated with a BBA from SFU – Concentrating in Finance

Why did you pick SFU?

My final choice was between UBC and SFU – The choice to go to SFU was made based primarily on the flexibility of the program (you can switch majors/ concentrations with ease; Co-op program offered; strong business faculty) and the school’s academic reputation. I was also an athlete during my university days (Football), so the athletic situation also influenced my decision. I essentially considered SFU and UBC to be academic equals – personal preference was what determined my choice.

What were the major challenges you faced while going through the certification?

It can be very difficult to work heavy hours, spend up to week 12 hours traveling, and then have to study until 1AM every night in the hotel room. During the times where I was studying, social life took a back seat to studying. Eventually, I developed a comprehensive study plan that outlined what I would be studying for each hour of every day. There were several deviations from the plan however; two entire weekends were unexpectedly lost to the DVD collection of the TV series ‘24′.

What is the regulatory body called for the certification?

It was formerly known as AIMR, but has now changed to the CFA Institute http://www.cfainstitute.org/

And…

What kind of person/career seeker would you recommend to become a member of the finance sector?

The first requirement is that you must be an analytical person. Your personality type can determine what kinds of job you can have within finance (and should not be a precluding factor), but without and analytical background, you would be at a disadvantage.

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For more on the CFA, click here.

Tags: CFA, Finance
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Cross me off the list of Level III Candidates, my status is now CFA Candidate, Charter Pending. I got the results last night after waiting far too long for the CFA web servers to work.

I’ll provide a more complete Level III review in the future, but in the meantime, here is the history of my CFA Experience:

• Level I
  • June 2004 – Passed (Pass rate: 32%)
  • Quit my job at the time and studied for 4-5 weeks straight. Committed <200 hrs. to studying, but felt very confident after the exam, and passed easily. Felt much of the material was seen during undergraduate finance degree. See my Level I review here
• Level II
  • June 2005 – Passed (Pass rate: 56%)
  • Studied while at my current job, often in hotel rooms until late in the night. Obviously started studying earlier, and was forced to adopt a strict study schedule that I followed well. Committed ~250 hrs. to studying. Exam material was new, and was more difficult than Level I. Actual exam was very tough, and I left the exam room with low confidence – Was pleasantly surprised to find that I passed fairly comfortably. See my Level II review here.
• Level III
  • June 2006 – Passed (Pass rate: 76%)
  • Maintained study schedule developed during level II. Committed ~ 300hrs. to studying; more time than either previous levels due to the strong desire to be finished with the exams. Material was by far the most interesting. Exam was considered relatively easy, and I left the exam with high confidence. Ended up passing easily as well.

What’s left now? I just have to complete my work requirements, submit my paper work, and I’ll soon be a CFA charterholder.

Congratulations to those who passed this year, and good luck to those still in the program. Feel free to browse around the site for more CFA material, or contact me below with any questions you have.

Tags: CFA, Finance
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Here is a little bit of a breakdown for the big exam this coming weekend

Tags: CFA
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If you are an avid reader of the site, I have to apologize for the lack of posting; it’s CFA season. I’m hoping wrap it up this year (L3 in exactly 46 days), and keeping my eyes on the prize.

In continuing the tradition from last year’s level II exam, you can check out my study schedule below:

There is some great material to post after this studying is all finished, so if you can wait the 1.5 months, I’ll be sure to entertain you. Until then, I’ll post if I can!

Tags: CFA
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There is plenty of interest in this designation out there right now, so I thought I’d share some of my experiences. I wrote level II in early June, and was informed of my passing grade on August 19th (Far too long for an Item set test that is marked by computers).

Here are my thoughts organized into several convenient topics:

Content Difficulty – Level II is known to be the most difficult in terms of content. The topics covered don’t change much (See my Level I cfa review), but the depth of knowledge needed to get through the exam does. While writing level I, I found that there was very little material that I hadn’t covered in my undergraduate degree – I could prepare for level I very quickly. Level II introduced topics that I had not had much experience with, especially on the accounting side (especially international accounting). However, if you do have an accounting background, I don’t think the accounting material will prove very challenging – just shift focus over to the economics, portfolio management or one of your weaker subjects.

Change in Format – 2005 was the first year that the Level II exam did not include a written portion; The written portion was replaced by Item set questions. I can’t comment on whether the exam has become easier or more difficult because of this change (This was my first time writing Level II), but I do think that the type of questions asked have shifted as a result in the changing format. More than I expected, the exam focussed on having a qualitative understating of material rather than centering on calculations and quantitative answers. There were many answers where you had to pick the best answer: “A only; A and B; A and B; A, B, and C”.

Study Material – My strategy here differed from the recommendations of the CFAI (formerly AIMR). I used the study notes and software provided by Stalla as my primary study aid. Where I felt I couldn’t get an adequate understanding from the notes, I would either consult my undergraduate textbooks, or the recommended texts of CFAI. My choice of study notes provider was made based on my liking of the PassPro software that stalla produces – the software is well integrated with the study notes and exceeds that of other providers. Schweser is the other big game in town, and they also provide quality notes (many feel that the schweser texts do a better job of covering the material). There definately isn’t one note provider that stands out from the other – you choice will have to come down to preference not quality.

I wouldn’t recommend only using study notes (and no textbooks) for anybody who hasn’t had plenty of academic finance experience – The notes tend to be only refreshers, and if you are looking at the material for the first time, it will be difficult to absorbe any of the material.

Scheduling – According to my estimates, I studied approximately 250 hrs. for the exam, slightly below the recommended allocation of 300 hrs. – I would generally study 16 hours per week, with an average of 8 hours of studying during the week, and another 8 hours split up during the weekend. Here is how I approached the chapters:

I was able to stay relatively close to the plan I had set out at the beginning. When you’re working heavy hours, it’s not an option to fall behind. Here are the chapter topics:

Actual Exam – As mentioned earlier, the exam was very qualitative, which I found surprising. The exam questions did not relate to what I studied, in terms of question format and specific material. With many of the questions, I felt that I was looking at the material for the first time, despite being able to comfortably pass each of the six practise exams that I had written. I don’t feel that studying more would have made much of a difference for my own success, or would have led to a higher exam score – Having a background outside of the assigned material definitely helped.

The morning exam was seen as being relatively easy, while the afternoon left everyone in the coliseum gasping for air (I wrote at the Pacific Colliseum @ the PNE, along with several thousand others). It’s fairly difficult to gauge the difficulty of the exam after only the morning session.

Passing Grade – 56% of people who wrote L2 passed, vs. approximate 32% last year.There are several possible explanations as to why this grade was so much higher than last year: the great number of rewrites this year (from all those who failed last time around), the change in format, the return to the more traditional pass rate for level II (which is aprox. 50%).

There is no way to really know why the passing level jumps – CFA institute is quite cryptic on how they set the passing grade. One thing we do know is that the delay in getting are results back (2 months) is partially explained by the amount of time it takes for them to set the passing grade.

Final thoughts – I left the exam thinking that I had failed (unlike level I where was confident I succeeded), but ended up passing fairly comfortably. This exam, more than any other I’ve written, feels like a crapshoot. You definately need to know the material to have a chance at passing, but knowing the material is really not enough to ensure that you do pass. There are many well-prepared, intelligent people who fail – and I think you need a bit of luck not to end up that group.

Tags: CFA, Finance
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As you may have noticed, there are some display problems with the site- You may have also noticed it hasnt’ been updated for awhile. These two developments are related.

About 1 month ago, wordpress was released to version 1.5, and I felt compelled to upgrade. Unfortunately, my site is so modified that the normally easy upgrade process degraded. It wouldnt’ be a big deal to fix -especially since i modified it in the first place – except that I haven’t had the time recently. Between Work, CFA, working out and eating (in order of decreasing magnitude of commitment), it has been mad busy.

I’ve also been travelling a fair amount over the last couple months – was in Toronto and Edmonton – and will be returning to both in the near future. So if you’re a friend, let me know if you want to hook up. I’ve taken some pictures, but also haven’t found the time to upload – I’ll be sure to do it when i get a chance.

There is some new hardware coming in as well: Canon sd300 and an Iaudio M3. – Maybe I’ll put a review up here after I test out the gear.

Tags: CFA
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Good evening all,

It has been awhile since I have last posted – I try to regulate the free-time I spend online, and, to the detriment of this website, most of my online time has been consumed by a webdesign project I’ve been doing.

Hopefully, that project will be up and running by mid-september, and when it’s up, i’ll be sure to post a fat link to it.

In other news, many of you know that I’m a CFA (Chartered Financial Analyst) candidate – well, last week I got my results, and I was fortunate enought to pass. I’m now 1/3rd of the way through the program.

Many people have asked me about the charter, and I’ll take this chance to give my impressions.

First off, here is the opening paragraph of the letter that came:

Congratulations! You have passed the 2004 CFA® Level I examination. The CFA Institute Board of Governors recognizes the challenge you have met and congratulates you on your achievement. Your success at Level I is an important step toward becoming a CFA charterholder. This June 34% of Level I candidates passed the examination.

Yes, that is right – there was a 34% pass rate. Ouch. Fortunately, most of the people I know who took the exam ended up passing. I’ve heard a couple theories as to why the pass rate has been continually dropping, but I feel that two factors are to blame:

1. Global Interest in the Program – There are an increasing number of candidates from outside of North America – this means that fewer candidates are comfortable with the langauge of the exam: English. The program is difficult enough with a solid English background, and it must be incrediblely challenging with limited english skills.
2. Increased Recognition of the Charter – The increased popularity of the program means that more people outside the core functions of finance are attracted to the program. Many people attempt to take the exam as a career booster or means to an industry shift. This inturn leads to people who sign up for the exam without knowing the commitment that it entails

To demonstrate the second point, there was an accountant sitting next to me during the exam (He was from one of the big 4) who said that even if he passed the exam, he wouldn’t sign up for level II. He had no idea how much work the program would be. Supporting this theory, the number of LI candidates who succesfully complete the program has fallen to 10% from what was once 30% (sorry, I coulnd’t find a link to support the numbers though). CFAI (CFA Institute) sent out a letter stating that they believed the reason for falling marks was due to the increased use of study guides in the place of recommended texts. I don’t buy their reasoning. The major study guides (Stalla, Schweser) are excellent, and do a great job of getting you ready for the exam.

The following is from an Email I wrote to a fellow SFU Finance major:

The CFA exam is a big commitment, but the material is honestly not that difficult for someone who went through SFU’s finance program. Most of the people I know who write it, pass pretty easily. In terms of study hours, CFAI recommends over 200, or even 250 hours.

The fortunate thing for us is that almost none of the material (at least in level I) is new – it’s like a six hour exam that covers all the topics we’ve done in school. The hard part is being able to retain so much information; there are no formula sheets. Level II and III are apparently a different story though, and there are very few people who feel comfortable after writing those exams.

While I do indicate that the material is not difficult for a finance major, I would feel sorry for any exam takers that didn’t major in finance. There is just so much material, that it can be overwhelming. The study guides may not be enought for those that do not have a strong finance background.

In case you are wondering what the program covers, here are the main topics:

• Financial Statement Analysis
• Alternative Assets- Real Estate, Venture Capital, etc.
• Derivatives
• Economics
• Equity Analysis
• Ethical & Professional Stnds.
• Fixed Income Analysis
• General Portfolio Management
• Quantitative Analysis – Statistics

The weighting varies, but Level I seems to focus more heavily on the accounting and ethics sections.

For all the Canadian bankers, brokers, and PFR’s out there that would like to use the CSC (Canadian Securities Course) as a measure, I assure you that the CSC pales in comparison both in terms of both depth and breadth of material covered. I did the CSC about a month before the CFA exam, so it was fresh in my mind. The CSC exam is probably 1/20th the difficulty of the CFA exam.

Now the big picture question: What does the CFA do for you?

The first thing to establish is that the charter alone is not a ticket for success. It alone will not open doors and get you to the top. What I feel it does do is give others a sense of security what you know – because it is standardized, it is recognized the world over – something that very few collegiate institutions can offer.

My reasons for taking the exam include career advancement, but I’m also taking it because I want to continue the learning process I started in University, to become secure in the knowledge I’ve gained through work and school. Am I an education junky? maybe, but a credentials whore I am not .

If you find the material enjoyable, I definately recommend the program. If you are only looking for career advancement, and find it difficult to stay focussed on studying – the program is going to be one tough experience. You’ll have to have a ton of discipline to maintain the commitment necessary to pass the program.

That’s it for now – I banged this post together quite quickly, so there may be some holes in what I wrote. If you’ve got any questions, feel free to ask, and if there is more interest, I’ll gladly write more on the subject.

To find more information, try the following sources:

• CFAI – The organization behind it all
• Analyst Forums – Many of the people active in the forum are idiots, but there is some great discussion as well
• Stalla - Study Program
• Schweser - More study material

Tags: CFA, Finance
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