The certificate one gets upon qualifying as a Chartered Financial Analyst (CFA) is apparently so large that only one printer in the world has been wired up to produce it. A gigantic diploma befits the outsized level of effort required to become a CFA. Candidates’ knowledge of a 7000 page curriculum is tested in three exams , totalling 18 hours, over three years. Only about 40 per cent of those who sit the first CFA exam pass it, and while the success rate rises slightly over the next two exams, still only 49 per cent of hopefuls become eligible after their third test. Such high failure rates give credence to John Rogers, the Invesco veteran who became global president and CEO of the CFA Institute in 2009, when he says he wants to do more than simply grow the number of CFAs.
“We’re a non-profit, missiondriven organisation that wants to make a positive difference to the world,” he says. Visiting Sydney this month, coincidentally the day after Shawn Richard of Astarra infamy pleaded guilty for his part in a $126 million superannuation fraud – Australia’s largest – Rogers stressed the big role that ethics plays in the CFA charter and curriculum. “There is no other financial services qualification that puts the emphasis on ethics that we do,” Rogers contends. “The MBA program does not have to teach anything about it, and that’s not right.” Indeed, ‘Ethics and Professional Standards’ is one of seven topic areas in the CFA curriculum, alongside ‘Quantitative Methods’, ‘Economics, Financial Reporting and Analysis’, ‘Corporate Finance’, ‘Analysis of Investments’, and ‘Portfolio Management and Analysis’. However, Rogers admits there is no way that greed, nor its consequent fraud and misrepresentation, can ever be eliminated.
“The best thing we can do is increase the likelihood it will be detected, and that takes a lot of different hands on the oars.” He says there needs to be more audits, both internal and external, and more incentive for people to “blow the whistle” on bad behaviour. “I think there is a big role for self-regulatory organisations in that regard.” It is still a case of ‘caveat emptor’ for investors, but the CFA Institute is doing what it can to increase financial literacy, Rogers says. The CFA societies in many of the 155 countries where the qualification has a presence help to organise the annual CFA Institute Global Research Challenge, which gathers students, investment professionals and public companies in a “real world” competition. The CFO of a company partnered with a particular CFA society will brief participants in the challenge directly.