www'cfa'ac'za

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CFA South Africa
The CFA Program and Charter Study methods, the
exams and some tips Warwick Langebrink CA(SA),
CFA
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CFA ProgramTM
Administered by CFA Institute
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BENEFITS of the CFA ProgramRespect Credibility
Most Common Occupations of CFA Charterholders

• CEO/Principal
• Chief Investment Officer
• Equity Analyst
• Fixed Income Analyst
• Investment Banker

• Investment Counselor
• Investment Firm Manager
• Portfolio Manager
• Portfolio Strategist
• Sales/Marketing Professional

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Where do AIMR Members Work?
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The CFA Course of StudyCFA Body of KnowledgeTM

• Ethical Professional
• Standards
• Quantitative Methods
• Economics
• Financial Statement Analysis
• Corporate Finance
• Analysis of Debt Investments

• Analysis of Equity Investments
• Analysis of Derivatives
• Analysis of Alternative
• Investments
• Portfolio Management
• Performance Measurement
• Portfolio Attribution Analysis

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The CFA Course of StudyCFA Body of KnowledgeTM

• 2004 Formats and Weights
• 5 12 q Portfolio Management
• 30 72 q Asset Valuation
• 28 67 q Financial Statement Analysis
• 12 29 q Quantitative Methods
• 10 24 q Economics
• 15 36 q Ethics

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PREPARATION for the CFA ExamsComprehensive
Readings
Level I Primary Textbooks (pse check study guide
for latest Textbooks)

• 2005 CFA Level I Candidate Readings
• Standards of Practice Handbook
• Quantitative Methods for Investment Analysis
• Economics Private and Public Choice
• The Analysis and Use of Financial Statements
• Investment Analysis and Portfolio Management
• Fundamentals of Financial Management
• International Investments
• Fixed Income Analysis for the CFA Program
• Analysis of Derivatives for the CFA Program

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Difficulty

• 250 quality hours per level
• Requires logical thought process / memory recall
• Not too quantitative
• Level I multiple choice
• Levels II and III Multiple Choice and Essays
  5050 split
• Questions come directly from Body of Knowledge
  and the LOS (Learning Outcome Statements)

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CFA Charter Requirements

• Sequentially pass Level I, II, III exams.
• Have 4 years of professional experience.
• Provide professional references (Level III).
• Apply for membership CFA Institute CFA South
  Africa societies.
• Submit professional conduct statement.

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Employment History Description of Duties /
References

• Remember to complete Address Sticker (used to
  send Study Guide to candidate)
• Incomplete applications rejected
• Keep a copy of your Registration
• Business Card

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Society Membership

• Continuing Education Resource.
• Standards of Professional Conduct.
• Advocacy.
• Public Awareness.
• Networking/Career Opportunity.

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REGISTERING for the CFA ProgramCosts for Program
Estimated Costs for Level I

Registration Fee to Enter CFA Program Enrollment
Fee for Level I Examination Study Materials for
Level I Study Guide Required Readings
Textbooks Supplemental Material Approximate
Total Costs for Level I Registration
Enrollment for Dec 2005 Exam by 15 March
2005 Delivery costs of textbooks, etc. are not
included
US375 US360 Free US731 US158
US1,624 (ZAR 9,744)
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Early Registration is essential for June 2005
exams
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Information Registration Package

• Bachelors Degree
• Fees (pay by credit card)
• Description of duties must include "investment
  decision making process"
• Professional Conduct - (tick correct boxes)

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Calendar June Exam
15 july Study Guides available and mailed to
applicants and Textbooks available for purchase
from book distributor 15 September Initial
deadline 15 December Second deadline 15 March
Final deadline April Examination Admission
tickets distributed 4 June Examination Day Late
July Exam results
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Calendar December Exam
September Study Guides available and mailed to
applicants and Textbooks available for purchase
from book distributor 2 January Registration
Enrollment opens 15 March Initial deadline 15
June Second deadline 15 September Final
deadline October 2004 Examination Admission
tickets distributed 4 December 2004 Examination
Day
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Earnings Potential

• The 2004 median total compensation for CFA
  investment
• management professionals with more than 10 years
  of experience is approximately US190,000, which
  includes a median base salary of US131,000, an
  anticipated cash
• bonus of US48,000 and non-cash compensation,
  usually in the form of stock options, of
  US15,000.
• Additionally, the top 10 of investment managers
  surveyed with more than ten years of experience
  expect to earn approximately US596,000, with
  many earning into seven figures.

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Earnings Potential

• 2004 Reynolds survey of 57000 US and Canadian
  CFAs
• Northeast United States enjoy median compensation
  25 percent greater than the U.S. and Canadian
  average,
• Chartered Financial Analyst (CFA) designation is
  22 percent higher than colleagues in equal
  grades.
• AIMR members in the
• United Kingdom and United States out earn their
  peers by a wide margin

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Popularity of CFA Program

• In 2004, 3,000 candidates were registered to take
  the CFA exams in Cape Town and Johannesburg
• (1995, 178 candidates over 10 fold increase in
  5 years)
• The 2004 exams were given simultaneously at 200
  test sites in 75 countries

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Financial Analysts Society of SA

• 106th member society
• will promote the interests of CFA candidates and
  qualified CFA charterholders in South Africa.
• strategic networking and continuing education
  through conferences and society events

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Study Methods (1)

• 250 hours per annum. Start early, study whenever
  you can.
• Before January 2 past exams solutions (make
  notes) Start Early
• If you get more than 70 for any section, leave
  it concentrate on the areas you do not know
• Jan - March 45 mins early mornings, 3 times
  during the week 2 hrs on weekends (Fri Sun
  nights)
• April - mid May increase hours. Summarise all
  notes by mid-May
• Mid-May to exam date - do (at least 2) past exams
  under exam conditions

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Study Methods (2)

• Do Not let CFA become a millstone around your
  neck
• Body of Knowledge is
• high volume
• not conceptually difficult
• Do not overestimate your ability.
• Learn to use your calculator
• New concepts may need to be covered 6 times to
  master the topic.
• Summarise notes and use different colour for each
  of 6 versions.

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Study Methods (3)

• Time Pressure Test. For mock exams Stopwatch
  with splits. (Stopwatches not allowed in exam)
• For Essays in Levels 2 and 3 (50 MCQ)
• Neat Handwriting
• For a 5 mark question
• write 5 short sentences, (no more than 5)
• Leave a line between each sentence.
• The examiner can then clearly and quickly digest
  your response.
• Diligence will pay dividends. Overconfidence may
  be your downfall

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Study Methods (4)

• Morning session 120 questions 1½ minutes each
• Old questions are NOT available
• Afternoon session 120 questions 1½ minutes each
  
• Old questions are NOT available
• Dont spot
• Taper off the day before, visit the test centre
• NB Dont use previous years notes. Notes are
  updated every year. Reconciling old vs new notes
  to save R2000 isn't worth your time cost.

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Calculators

• Texas Instruments BAII Plus
• Hewlett Packard 12C

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The Exam

• Get there early
• Ticket, ID, pens, pencils with fresh erasers, and
  calculator
• Personal items
• Read each question carefully
• Start out with something easy
• Watch the time
• Dont leave anything blank
• Be neat and organized
• Use the restroom
• Eat lunch!
• Expect the unexpected Stay calm

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The Exam

• Candidate Bulletin
• What can I take to the exam center?
• ID Policy ID and picture one current document
  Passport
• GAAP applies unless otherwise stated
• Calculator policy
• Pass Rate 2004 34 (of those that sat the exam)

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Contacting CFA Institute
www.cfa.ac.za www.cfainstitute.org
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Download Information Registration package (post
takes 2 weeks) / Online Validation New York
Society of Investment Analysts
www.nyssa.org/educate/discus/board.html
560 Ray C. Hunt Drive P. O. Box
3668 Charlottesville, VA 22903-0668 USA Telephone
[phone] [phone] Fax (434)
951-5262 E-mail info_at_cfainstitute.org
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Schweser Review Course

• High Quality CD-Rom video sessions
• 21 Evening sessions of 3hrs each (with a break in
  between 17h30 to 20h00)
• Schwesers expert leading international lecturers
• (not a substitute for study)

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Schweser Review Course

• Levels I, II and III
• Schweser CD-ROM based
• Expert lecturers
• Video workbook
• Limited class size
• Student interaction

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Schweser Review Course

• 17H30 to 20H00 twice weekly
• Starting mid February 2005
• Ending early May 2004
• Johannesburg and Cape Town
• Venues still to be announced

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Schweser Review Course

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Schweser Review Course

• Review Courses R2,000
• Schweser study notes R1,900
• Both (Review Course Notes) R3,400

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Schweser Review Course

• Employers can claim back up to 65 from
• Skills Development Levy
• Submit workplace skills plan 15
• Implementation of training 45
• Discretionary amount 5

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Schweser Review Course

Contact Joanne at info_at_investmentwise.co.za
Tel [phone] www.investmentwise.co.za
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FAQs

• Where can I get the books? Contact Ann Marie
  Wood info_at_cfa.ac.za or Joanne Millar
  info_at_investmentwise.co.za Tel [phone]
  www.investmentwise.co.za
• Where can I get the calculator? Sandton
  Stationary and Print - Sandton City
• As an MBA/ Honours - do I get exemptions ? No
• Can I write part of the exam in SA and the rest
  in another country? Yes
• What is minimum tertiary requirements ? Bachelors
  degree (if in doubt they query with
  info_at_cfainstitute.org)
• What is the work experience requirement? 4 years
  in the Investment Decision Making Process (if in
  doubt they query with info_at_cfainstitute.org)
• Can I have a break between writing the 3 levels?
  Yes
• Can I become a member of the local society
  without becoming a member of CFA Institute? No -
  Please refer CFA Membership Instructions, Sponsor
  Information and Forms

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FAQs

• When and how can I become a member of the local
  society (CFA South Africa)? - after completion
  of level 1 and registration for level you can
  apply to CFA Institute as an Affiliate member .
  By completing CFA Inst application form and
  inserting the code JB under the local society
  section - forwarding this to CFA Institute who
  will bill you and confirm acceptance (can take up
  to 6 weeks) Please refer CFA Membership
  Instructions, Sponsor Information and Forms
• What is a sponsor form? - you will need 2 CFA
  sponsors to become a member of US and SA
  Societies. - Please refer CFA Membership
  Instructions, Sponsor Information and Forms
• How would I then become a REGULAR member?. If you
  are already an AFFILIATE member, have completed
  and passed 3 levels and 48 months relevant work
  experience you would complete a STATUS CHANGE
  form (on the site) and submit to CFA Institute
  Please refer CFA Membership Instructions, Sponsor
  Information and Forms

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Conclusion

• low cost / risk
• high benefit
• good entrée into international markets
• practical
• relevant
• most beneficial part time financial qualification