CFA programme: An overview

On 15 June 1963, 284 senior analysts sat for the first CFA(r) examination at various cities throughout the United States and Canada (during the initial year, the equivalent of the current Level III examination was the only examination required to earn the CFA charter).
According to C. Stewart Sheppard's The Making of a Profession: The CFA Program (1992, p. 8), "...268 were successful, and those who failed attributed it mainly to their lack of adequate preparation." The program has evolved to a great extent since its inception.
The original program focused on equity security analysis in a U.S. setting and emphasised ethical and professional standards. Today's CFA Program covers a much broader Candidate Body of Knowledge(tm) (CBOKTM) which reflects the continuing evolution of the profession.
Although equity security analysis, ethical and professional standards still occupy prominent positions in the program, so do fixed-income analysis, alternative and derivative investments, portfolio management, and several other topics-all set in a global context.
The current program is best described as a self-study, distance-learning program that takes a generalist approach to investment analysis, valuation, portfolio management, and emphasises the highest ethical and professional standards.
The success of the CFA Program is a function of active practice and continuous involvement; practising CFA charterholders are evolved at every stage of the process.
The CFA Program is not an academic program but, rather, one that focuses on the global investment management profession from the standpoint of a practitioner.
The CFA Program process begins with a global practice analysis - a survey of current practising investment professionals - to develop the CBOK, which is the foundation of the program.
This process is led by the Education Advisory Committee (EAC), a group of prominent volunteer CFA charterholders. With the CBOK determined, CFA Institute staff, members, and consultants design the curriculum with EAC oversight of the process.
The Council of Examiners (COE) - comprising only CFA charterholders - then directs the development of the CFA examinations by the CFA Exam Team (a larger group of CFA charterholders who write the examination questions) based on the curriculum.
After administration of the examinations, CFA charterholders from all over the world arrive in Charlottesville, VA, USA, to grade the constructed response (essay and problem) portions of the Level III examinations. Multiple-choice and item-set portions of the Levels I, II, and III examinations are machine graded.
With grading concluded, additional groups of charterholders convene to "standard set" the examinations. Charterholder members of the CFA Institute Board of Governors then determine the minimum passing score for each level of the examinations.
Levels I and II candidates receive their examination results at the end of July (June examination and at the end of January (December examinations); Level III candidates receive their results in mid-August.
Only after passing the Level III examination and fulfilling the CFA Program's relevant work experience requirement is a candidate awarded the right to use the coveted CFA designation.
FUTURE OF CFA PROGRAMME
We hope after reading this article you agree that the standards and rigor of the CFA Program have been maintained and even enhanced.
The stakes of the CFA Program are higher than ever as the CFA charter has become a de facto condition of employment in many investment management organisations.
The list of countries and territories, currently numbering twenty-one, that require investment professionals to pass one or more levels of the CFA exam to practice in their jurisdictions continues to grow, and this independent level of recognition enhances the value of the charter.
On the list, examples include authorities in Australia, Brazil, Canada, Hong Kong, Germany, and South Africa.
Not only regulatory but also educational and professional recognition enhances the value of the charter.
Also, universities and other qualifications recognise the CFA Program by providing course waivers.
The CFA Institute Board of Governors established a clear guiding principle for governance of the CFA Program on which all decisions will be made: "Never lower standards, either educational or ethical.
Growth for growth's sake is not the goal." This commitment to upholding ethics, educational rigor, and professional excellence has been recognised on various occasions in publications, including The Economist and the Financial Times.
The CFA Program will continue to evolve to meet the changing needs of the capital markets.
The original programme focused on equity security analysis in a US setting and emphasised ethical and professional standards. Today's CFA Programme covers a much broader Candidate Body of Knowledge which reflects the continuing evolution of the profession.