What Every Investor Should Know...

Why Select a CFA® Charterholder?

S uccessful investors recognize the importance ofeducation and knowledge when it comes to man-aging financial assets. But while they may spend

countless hours learning about markets, securities, andassociated risks, investors often overlook the qualifica-tions of the professionals whom they hire to managetheir money.

If you work with investment advisers, they will haveaccess to the personal details of your finances, so theircredentials should matter to you. There are a number ofreputable and applicable credentials that financialprofessionals in different disciplines may hold, but noneis as rigorously focused on investment knowledge asthe Chartered Financial Analyst® (CFA) designation.Understanding the significance of the CFA charter—and what is required of investment professionals inorder to hold it—can be useful information whenchoosing an investment adviser.

Global Relevance With CFA charterholders in more than120 countries and the increasing demand worldwide forthe CFA Program, the CFA charter has become the globalprofessional investment credential. The CFA charter isoften referred to as a professional global “passport,”providing the expertise that allows CFA charterholdersto practice across international boundaries. Others havereferred to it as the gold standard of the industry.

Each June and December, tens of thousands of candi-dates sit for the CFA examinations at more than 180sites around the world. In 2008, more than 175,000candidates from 172 countries enrolled to take one of thethree levels of the CFA exam. Since 1998, some of themost significant growth in candidate numbers has occurredin Europe and Asia, particularly China and India.

Knowledge and Experience In the late 1940s, BenjaminGraham, often called the “father of security analysis,”first proposed a “Qualified Securities Analyst” designationfor members of the growing investment profession.

The CFAcharter

has becomethe global

professionalinvestmentcredential.

After much work from Graham andother dedicated professionals, thefirst CFA exam was administered in1963 to 284 candidates.

To become a CFA charterholder, acandidate must pass a series of threesix-hour examinations, taken insequence. Average completion timeis four years. Achieving passingscores on all three exams is no smallfeat. Each of the six-hour examina-tions takes, on average, a minimumof approximately 250 hours of intensive self-study andpreparation. The combined pass rate (aggregated overall three exam levels) for the June and December exams since1963 is 52 percent.

Core elements of the CFA curriculum include investment tools(economics, financial statement analysis, quantitative analysis,and corporate finance), asset valuation (analysis of debt investments,equity investments, derivatives, and alternative investments), andportfolio management (both institutional and individual,including performance measurement). Each examinationincludes a section that thoroughly tests knowledge and applica-tion of ethical and professional standards.

To ensure that the CFA Program stays current with the ever-changing dynamics of professional investment practicethroughout the world, CFA Institute member volunteers andprofessional staff develop and update the curriculum andconstruct the examinations annually. The resulting CandidateBody of KnowledgeTM is known as one of the most rigorousand comprehensive disciplines in the investment profession.

As rigorous as the curriculum and examinations are, the CFAProgram requires more than academic preparation. Beforethey earn the right to use the CFA designation, candidatesmust have three to four years of professional experience inthe investment decision-making process. Additionally, theymust fulfill the CFA Institute membership requirements andcommit to uphold the stringent CFA Institute Code of Ethicsand Standards of Professional Conduct.

Ethics The integrity of investment advisers is of the utmostimportance. Their skills and advice directly impact thefinancial well-being of their clients. That is why every CFAcharterholder, CFA Institute member, and CFA candidate isrequired to sign an annual statement declaring adherenceto the CFA Institute Code of Ethics and Standards ofProfessional Conduct.

The Code and Standards require members and candidatesto act with integrity, practice in a professional and ethicalmanner, exercise independent professional judgment,maintain and improve their professional competence, andput client interests before their own. The 160-page CFAInstitute Standards of Practice Handbook—an “instructionmanual” for ethical guidance within the investment commu-nity—interprets and expands the requirements of the Codeand Standards.

CFA Institute investigates all allegations of violations of theCode and Standards, whether self-disclosed by the CFAcharterholder or raised by an investor, fellow investmentprofessional, or the media. Those who are found to haveviolated the Code and Standards, or who fail to divulgeformal complaints as required in the annual CFA InstituteProfessional Conduct Statement, are subject to disciplinarysanctions from CFA Institute. Sanctions can range fromprivate censure to revocation of membership in CFAInstitute and the right to use the CFA designation.

Recognition A relevant and evolving curriculum, rigorousexaminations, and a stringent application of the CFAInstitute Code of Ethics and Standards of ProfessionalConduct have been hallmarks of the CFA Programthroughout its history. Recognition of the CFA Program’sglobally relevant Candidate Body of KnowledgeTM and theprofessional standards embodied in the program makes theCFA designation the mark of distinction for investment pro-fessionals worldwide. It is a global distinction recognizedand rewarded by employers, respected by regulators andinvestment institutions, and demanded by private investors.

CFA Institute is the global, not-for-profit professionalassociation that administers the Chartered FinancialAnalyst® curriculum and examination programworldwide and sets voluntary, ethics-based profes-sional and performance-reporting standards for the

investment industry. CFA Institute was known as AIMR (Association for InvestmentManagement and Research) from 1990 to early 2004 and before that was two separateorganizations whose roots go back to 1947. More information may be found atwww.cfainstitute.org.

The information contained in this piece is not intended to and does not provide legal, tax,or investment advice. If assistance is required, the services of a competent professionalshould be sought.

©2008 CFA Institute

Charlottesville New York Hong Kong London

Contact CFA Institute for moreinformation on its programsand services:

560 Ray C. Hunt DriveP.O. Box 3668Charlottesville, VA 22903-0668

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