SO YOU WANNA BE A CFA?

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SO YOU WANNA BE A CFA?

• An Introduction to the CFA? Exam
• Preparation, Time Commitment, and Benefits
• The Investment Analysts Society of Chicago
• October 30, 2001

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AGENDA

• Introduction History purpose how it all
  started
• Structure Requirements what the program
  entails
• Preparation Involved how much time what
  involved
• Topics Covered what subjects are necessary to
  know
• Demographics of Candidates who are they?
• Benefits of the CFA? Designation money,
  reputation, and continuing education
• Careers Salary Analysis what the market is
  paying

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AGENDA

• Introduction History purpose how it all
  started
• Structure Requirements what the program
  entails
• Preparation Involved how much time what
  involved
• Topics Covered what subjects are necessary to
  know
• Demographics of Candidates who are they?
• Benefits of the CFA? Designation money,
  reputation, and continuing education
• Careers Salary Analysis what the market is
  paying

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INTRODUCTION HISTORY

• Purpose of the exam is to establish standards of
  competency and integrity.
• Exam is designed to reinforce fundamental
  knowledge of investment principles.
• Encompasses cutting-edge topics of today (if the
  topic is current, it will show up in the exam).
• Focus on ethics thus, upholding the highest
  standards of ethical responsibility.
• Not an exam for a specialist, but supplements the
  specialists general knowledge

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INTRODUCTION HISTORY

• History
• Program first administered in June, 1963
• 268 security analysts emerged as first class of
  CFAs?
• Today
• As many as 80,000 candidates to register for the
  June, 2002 exam.
• Nearly 400,000 CFA? exams administered
• More than 35,000 investment professionals have
  earned right to use the charter (to have the
  letters CFA? after your name)

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AGENDA

• Introduction History purpose how it all
  started
• Structure Requirements what the program
  entails
• Preparation Involved how much time what
  involved
• Topics Covered what subjects are necessary to
  know
• Demographics of Candidates who are they?
• Benefits of the CFA? Designation money,
  reputation, and continuing education
• Careers Salary Analysis what the market is
  paying

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STRUCTURE OF PROGRAM

• Divided into 3 Levels Level I, II, and III
• You may sit for 1 examination each year.
• Exam usually offered either the last Saturday in
  May or first Saturday in June.
• You must pass each level sequentially in order to
  take the next level. If you fail one level, then
  must re-take the exam the following year.
• Minimum completion time is 3 years, maximum is 7
  years.

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STRUCTURE OF PROGRAM

• Level I Multiple Choice
• Level II 50 Short Answer / 50 Essay
• Level III 50 Short Answer / 50 Essay
• Self-Study Curriculum
• Pro flexible enough for the busy professional.
• Con The exam is self-study.

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PASS RATES
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REQUIREMENTS OF DESIGNATION

• Completion of all 3 Levels only one part to
  receiving the CFA? Designation.
• Must have at least 3 years of relevant work
  experience within investment analysis by the time
  you finish Level III.
• Must have completed a Bachelors Degree in order
  to sit for the exam.
• Must apply for membership in AIMR and an AIMR
  Member Society/Chapter.
• And must meet professional conduct requirements
  (you have no crimes or skeletons in the closet)

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AGENDA

• Introduction History purpose how it all
  started
• Structure Requirements what the program
  entails
• Preparation Involved how much time what
  involved
• Topics Covered what subjects are necessary to
  know
• Demographics of Candidates who are they?
• Benefits of the CFA? Designation money,
  reputation, and continuing education
• Careers Salary Analysis what the market is
  paying

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PREPARATION

• ON AVERAGE, each level of the Program calls for
  250-300 hours of exam preparation. Can vary due
  to self-study nature of the exam.
• Reading assignments compose the core of the study
  program and are the basis for the exam questions.
• Reading assignments are from both textbooks other
  readings that are necessary for taking the exam.
  These must be purchased as part of the
  preparation for the exam.

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PREPARATION

• Upon enrolling into the program, you will receive
  a comprehensive study guide detailing Learning
  Outcome Statements (LOS) or specific subtopics
  that you are required to know for the exam.
• The study guide is divided into study sessions
  that list the required readings and learning
  outcomes for each reading.
• Textbooks and Readings are required purchases for
  the exam.

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PREPARATION

• Review Courses, such as BeckerConviser / Stalla,
  are available to facilitate the learning process.
• But they are not a substitute to preparing for
  the exam.
• The best ingredients for successful preparation
  
• Mental focus determination
• Regular scheduled studying
• Studying the assigned reading per LOS
• And if it helps, taking review courses getting
  involved in study groups.

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AGENDA

• Introduction History purpose how it all
  started
• Structure Requirements what the program
  entails
• Preparation Involved how much time what
  involved
• Topics Covered what subjects are necessary to
  know
• Demographics of Candidates who are they?
• Benefits of the CFA? Designation money,
  reputation, and continuing education
• Careers Salary Analysis what the market is
  paying

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TOPICS COVERED ON EXAM

• The CFA? Programs Body of Knowledge includes
• Ethics Professional Standards
• Quantitative Methods
• Economics
• Financial Statement Analysis
• Corporate Finance
• Analysis of Debt Investments
• Analysis of Equity Investments
• Derivatives
• Alternative Investments
• Portfolio Management
• Performance Measurement

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BREAKDOWN OF COURSE STUDY
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CALCULATOR POLICY

• Due to programming functions available for
  formulas only 2 calculators are permitted to
  be used
• Texas Instruments BA II Plus
• Hewlett Packard 12C
• Proctors instructed to confiscate unauthorized
  calculators.

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AGENDA

• Introduction History purpose how it all
  started
• Structure Requirements what the program
  entails
• Preparation Involved how much time what
  involved
• Topics Covered what subjects are necessary to
  know
• Demographics of Candidates who are they?
• Benefits of the CFA? Designation money,
  reputation, and continuing education
• Careers Salary Analysis what the market is
  paying

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CFA? CANDIDATEAGE PROFILE
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CFA? CANDIDATEGEOGRAPHIC PROFILE
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CFA? CANDIDATEGROWTH
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CFA? CANDIDATEGLOBAL GROWTH
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CFA? CANDIDATEEMPLOYMENT PROFILE
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AGENDA

• Introduction History purpose how it all
  started
• Structure Requirements what the program
  entails
• Preparation Involved how much time what
  involved
• Topics Covered what subjects are necessary to
  know
• Demographics of Candidates who are they?
• Benefits of the CFA? Designation money,
  reputation, and continuing education
• Careers Salary Analysis what the market is
  paying

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BENEFITS OF CFA? DESIGNATION

• Symbol of professional excellence, and as a
  result
• A primary qualification for senior level
  investment positions (and most analysts positions
  as well).
• Frequently backed and financially sponsored by
  employers.
• Global Acceptance
• In fact, in some parts of Asia, this is a way of
  keeping their financial system clean and
  self-regulated something they have a hard
  time regulating themselves.
• Membership into AIMR and local CFA? Societies
  require the CFA?. Bottom Line? Networking and
  Continuing Education access.

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THE IASC

• The Investment Analysts Society of Chicago (IASC)
  
• Oldest CFA Society founded in 1925.
• Also most prestigious with the history in finance
  that many of our members created.

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BENEFITS OF IASC MEMBERSHIP

• Weekly luncheon meetings providing interesting
  speakers, networking, and most importantly,
  lunch
• Education Career Development programs new
  intellectual capital that can be used in
  practice.
• Committee Involvement there are several
  committees you can participate on to network and
  make a difference.
• Jobs Listings www.tiasc.org - and the site is
  also another way to network with the Society.

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AGENDA

• Introduction History purpose how it all
  started
• Structure Requirements what the program
  entails
• Preparation Involved how much time what
  involved
• Topics Covered what subjects are necessary to
  know
• Demographics of Candidates who are they?
• Benefits of the CFA? Designation money,
  reputation, and continuing education
• Careers Salary Analysis what the market is
  paying

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COMMON OCCUPATIONS OF CFAs?

• 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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EMPLOYERSWITH LARGEST OF CFAs?

• ABN Amro
• American Express Financial
• Bank of America
• Bear, Stearns Company
• CIBC World Markets
• Donaldson, Lufkin, Jenrette
• Chase J.P. Morgan
• Lehman Brothers
• Loomis, Sayles Company
• Merrill Lynch

• Morgan Stanley Dean Witter
• Nesbitt Burns
• PaineWebber
• Putnam Investment Management
• RBC Dominion Securities
• Salomon Smith Barney
• Standish, Ayer Wood, Inc.
• State Street Global Advisors
• UBS Asset Management
• Wellington Management

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CAREER MONEY BENEFITS

• Definite correlation between high base salaries /
  bonuses with those individuals having the CFA?
  and approximately 6 years of relevant experience.
• Supported by 1999 study by HQ Search where 230
  equity analysts and 60 mutual fund analysts
  working for 55 different Chicago-based investment
  companies, banks and consultants.
• Also supported by 1999 Russell Reynolds national
  survey.
• The CFA? credential provides better career
  opportunities and not just in investment
  management.
• Investment bankers, bankers and other financial
  managers value a CFA?.

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CAREER MONEY BENEFITS

• Chicago as a financial hub Growing money
  management industry base and thus, job prospects
  increasing this is due to
• 1999 exodus of Chicago-based firms left numerous
  Chicagoans extremely wealthy from their sell-out
  provisions.
• September 11 effect encouraging financial firms
  to diversify their locations.

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APPENDIX