CFA® PROGRAM UPDATE

Lisa Plaxco, CFA, CIPM

Head, CFA Program

June 2019

2

CFA Institute and

Credentialing Overview

OUR STRATEGY AND OUTCOMES

3

Business models geared toward achieving investor outcomes

ST

RA

TE

GY

OU

TC

OM

ES

Educated, ethical members

at the top of their profession

High standards of entry

and professionalism

Regulations that align

firms and clients

Develop Future

Professionals

Through relevant

and accessible

credentialing programs

Deliver Member

Value

That accelerates the

professional success

of our members

Build Market Integrity

That accelerates the

professional success

of our members

CFA INSTITUTE CREDENTIALING PROGRAMS

4

Three exams

CFA® ProgramInvestment decision-making and strategy

Portfolio and wealth management

Institutional investing

Investment analysis

4,000 hours of

professional

work experience

Two exams

CIPM® ProgramInvestment performance and risk evaluation

Risk management

Manager search and selection

Investment analysis

Client relations

4,000 hours of

professional

work experience

Ethics

Investment roles

A clear understanding of

the global investment industry

Investment

Foundations® ProgramIndustry essentials

One online examNo experience

required

See program details at www.cfainstitute.org/programs

CFA PROGRAM GROWTH

5

As of 31 March 2019

AMERICAS

25%

EUROPE, MIDDLE EAST, AFRICA

17%

ASIA PACIFIC

58%

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

FY96 FY98 FY00 FY02 FY04 FY06 FY08 FY10 FY12 FY14 FY16 FY18

356,200

91,500AMER

63,200EMEA

201,500APAC

GLOBAL REACH

CFA Program has test centers in 193 cities in 95 markets, as of April 2019.

6

193

Total Cities

95

Total Countries/Regions

82

64

47

0

10

20

30

40

50

60

70

80

90

Americas EMEA Asia Pacific

Test Locations by Region

As of April 2019

Learning

Ecosystem (LES)

Future of Exam

Delivery (FED)

Continuing

Professional

Development (CPD)

Specialist

Micro-Credentials

CREDENTIALING 2030 INITIATIVES

7

1

2

3

4

Integrated learning

experienceData analytics

Contemporary

instructional design

Candidate convenience,

accessibility, and

service

Fidelity to practiceRisk management

and candidate growth

Role-based

competency framework

Post-CFA Program

specialized and localized

learning through societies

Post-CFA refresher

and advanced

specialization

Member CPD

(Refresher, Industry

Advances)

Role-relevant certificate

“stacks” for

charterholders and other

industry participants

Derived from the

CFA Program

8

CFA Program

THE THREE LEVELS OF THE CFA EXAM

9

Ethics and Professional Standards

• Quantitative Methods

• Economics

• Financial Reporting and Analysis

• Corporate Finance

Investment Tools

• Equity Investments

• Fixed Income

• Derivatives

• Alternative Investments

Asset Classes

• Portfolio Management

• Wealth Planning

Portfolio Management and Wealth Planning

LEVEL I

Ethics

LEVEL II

Ethics

LEVEL III

Ethics

Knowledge/Comprehension

Application/Analysis

Synthesis/Evaluation

CFA PROGRAM PROCESS

10

Minimum

Passing

Score

Standard

SettingGradingExams

Education Advisory CommitteeCouncil of

Examiners

CFA Institute

and Member

Volunteers

CFA Institute,

Member

Volunteers, and

Consultants

Board of

Governors

Global

Practice

Analysis

Candidate

Body of

Knowledge

Curriculum

2019 REFRESHER READINGS

For this year’s curriculum updates, ethical and professional standards, portfolio management and wealth

planning, quantitative methods, financial reporting and analysis, and fixed income were the key topic areas,

with a total of 11 new readings added to refresh your knowledge.

11

Application of the Code and Standards

Professionalism in Investment Management

Fintech in Investment Management

Overview of the Asset Management Industry and

Portfolio Management

Introduction to Equity Portfolio Management

Passive Equity Investing

Active Equity Investing: Strategies

Active Equity Investing: Portfolio Construction

Multiple Regression and Machine Learning

Analysis of Financial Institutions

Credit Analysis Models

THE PATH TO BECOMING A CFA® CHARTERHOLDER

12

Pass CFA

Exams

New

Charterholder

Become

a Member

Meet Regular Membership Requirements• Acquire 4,000 hours of qualified professional work experience

• Obtain 2 to 3 references who can attest to your work

Pass Level I Pass Level II Pass Level III

13

The Value of the Charter

THE VALUE OF THE CHARTER

CFA Program Benefits

14

GOLD STANDARDThe CFA® Program equips you not only to

enter the profession but also to excel

UNMATCHED EXPERTISEOur rigorous curriculum will equip you

for complex investment decisions

GLOBAL PASSPORTEarn waivers from regulatory agencies,

graduate programs, and more

CAREER RESOURCESGain access to career guides, thought

leadership, and continuing education

STRONG ETHICAL FOUNDATIONGain confidence and clarity in navigating

ethical issues

PRESTIGIOUS NETWORKConnect with an exclusive group of

outstanding investment professionals

CHARTERHOLDERS IN YOUR BUSINESS

15

DO

WELL

Competent, motivated

employees contribute

to better organizational

performance (phi)

DO

GOOD

Builds client trust and

reduces enterprise risk

LOOK

GOOD

STAY

GOOD

Signals quality through

professional affiliation

Reinforces industry

Relevance and

commitment to

best practices

▪ Mastery of investment knowledge

▪ Four years of qualifying, practical work experience

▪ Consistent level of global excellence

▪ Annual attestation to code of ethics

▪ Minimized business risk through informed investment

decisions

▪ High standards of professional conduct

▪ Membership raises firm’s reputation

▪ Charterholders recognized as leaders in compliance and

trust

▪ Commitment to standards helps firms win and retain AUM

▪ CFA Program curriculum and CPD learning opportunities

continually updated to remain relevant

▪ CFA Program recognized by regulators

▪ Hiring charterholders helps build the next generation of

firm’s leadership

EMPLOYERS SEEK OUT THE CFA CHARTER

16

“Enrollment in or completion of a CFA designation

would be an asset.”

Investment Banking Analyst

Goldman Sachs

“You have, or are in the final year of

[earning], your CFA designation.”

Equity Research Associate

Bank of America Merrill Lynch

“Completed [the CFA

Program] or working

toward CFA designation

is advantageous.”

Analyst

BlackRock

*Listings from CFA Institute JobLine

17

Appendix

18

CREDENTIALING LEADERS

• Establish and convey program strategy

• Develop and implement comprehensive business plan

• Liaise across credentialing, regions, channels, and other strategic functions

Rob Langrick, CFA, CIPM (Head)

Maintain relevance of all Credentialing program bodies of knowledge that drive curriculum and

exam development.

Barbara Petitt, PhD, CFA (Head)

Create an end-to-end learning experience by overseeing curricula based on practice analysis for all

credentialing programs.

Chris Wiese, CFA (Head)

Design and develop fair and rigorous measures of candidate mastery of the assigned curriculum for

all credentialing programs.

Peg Jobst (Head)

Deliver a high-quality testing experience through the secure, equitable, and accurate administration

and grading of the CFA Institute portfolio of exams.

CURRICULUM

AND LEARNING

EXPERIENCE

PRACTICE

ANALYSIS

CIPM PROGRAM

Tom Porter

(Head)

CFA PROGRAM

Lisa Plaxco, CFA, CIPM

(Head)

EXAM

DEVELOPMENT

EXAM

ADMINISTRATION

AND SECURITY

Stephen Horan, PhD, CFA, CIPM, CAIA

Managing Director, Credentialing

BUSINESS

OPERATIONS

Wanda McClenahan (Director)

Optimize performance and transparency to facilitate accountability, alignment, and agility

across Credentialing.

FU

NC

TIO

NS

PROGRAMS

EXAM SCHEDULE AND PRICING OVERVIEW

19

Program Overview 2018–2019

CFA®

PROGRAM

Professional/graduate level

Pricing (US$)June and Dec 2019

enrollment fee early registration standard registration late registration

$450 plus $650 or $950 or $1,380

Timeline

Early

registration

deadline

Standard

registration

deadline

Late

registration

deadline

Exam

day

Exam

results

June 2019

(Level I, II, III)17 Oct 2018 13 Feb 2019 13 Mar 2019

16 June 2019

AMER/EMEA

15 and 16 June

2019

APAC only

I, II: Aug 2018

III: Aug 2018

Dec 2019

(Level I only)27 Mar 2019 14 Aug 2019 11 Sept 2019 7 Dec 2019 Jan 2019

PURPOSE OF PRACTICE ANALYSIS

20

To ensure the continuous development of the

Global Body of Investment Knowledge (GBIK®)

To identify the relevant content for the CFA

Program Candidate Body of Knowledge

(CBOK™)

Conducted on an ongoing basis to ensure

the content of the GBIK and CBOK

remains current and relevant

THE PRACTICE ANALYSIS PROCESS

21

Investment Professionals

Regulators

University Faculty

Member Associations

What are the knowledge,

skills, and abilities needed to

successfully practice as an

investment professional?

What are current

industry trends?

Research Foundation

Future of Finance

CFA Program Curriculum

CFA Examination

Candidate Body

of KnowledgeInput from Practitioners Global Practice Analysis

Global Body of

Investment Knowledge

CURRICULUM DEVELOPMENT

22

Topic weights

Level of knowledge

Exam frequency

Identify curriculum

projects

How are concepts

applied in practice?

Pair academic

and practitionerInternal review

Initial Draft

External Reviews

Quality control

Author Selection

Reconcile CBOK and

DUO to curriculum

How should they be

taught in curriculum?

CLAs

Degree of

Understanding (DUO)

Just Qualified

Candidate (JQC)

General Marching

Orders (GMOs)

Gaps, Overlaps,

and Weakness

(GOW) Report

Learning Outcome

Statements (LOS)

Reading Outlines

Final Draft

EAC Working Body

Multiple reviewers

Multiple rounds

of review

Authors/

External ReviewersAuthors

Test Specification

Task Force (TSTF)

Curriculum Level

Advisors (CLAs)Practice Intensives Curriculum Directors

WHAT CAN I DO WITH THE CFA CHARTER?

23

Charterholder Employment by

Primary Investment Practice Charterholder Top Job Roles by Title

As of March 2019

33%

19%

6%

3%

3%

3%

2%

1%

1%

1%

1%

18%

8%

Equities

Fixed Income

Private Equity

Derivatives

Real Estate

Hedge Funds

Structured Products

Commodities

Venture Capital

Foreign Currency

Indexed

Not Applicable

Other

21%

16%

6%

5%

5%

5%

3%

3%

3%

3%

Portfolio Manager

Research/Investment /Quantitative Analyst

Consultant

Financial Adviser/Wealth Manager

Risk Analyst/Manager

Corporate Financial Analyst

Investment Strategist

Manager of Managers

Trader

Sales Agent

BENEFITS OF EMPLOYING CFA CHARTERHOLDERS

The CFA charter differentiates candidates in today’s evolving and competitive global investment

management industry

24

Expertise

• Broad skills for investment

analysis and decision-making

• Mastery of CFA® Program

curricula

• Global perspective

Trust and Accountability

• Client-first thinking

• Mastery of professional and

ethical standards

• Tenacity and commitment to the

profession

• Global best practice compliance

to safeguard client interests

Relevance and Recognition

• Continual CFA Program

curriculum updates

• Charterholders employed by

top investment firms worldwide

• Regulators accept the CFA

charter to meet certain licensing

requirements

TOP GLOBAL EMPLOYERS OF CHARTERHOLDERS

25

Allianz SE

Bank of America Merrill Lynch

BlackRock

BMO Financial Group

CIBC World Markets Inc.

Citigroup

Credit Suisse

Deutsche Bank

Ernst & Young

Fidelity Investments

Goldman Sachs

HSBC

JP Morgan Chase

Morgan Stanley Smith Barney

PricewaterhouseCoopers

RBC

Scotiabank Group

TD Bank Financial Group

UBS

Wells Fargo

As of June 2018