CFA Competencies

An individual with a professional certification brings credibility and expertise to the organization. But when you look closer, you'll see that a certified individual brings a package of multiple competencies to the table. These competencies are important both in terms of ability to the job as well as long term benefit to the organization. Many times, a professional certification brings both expressed and implied competencies to your organization. If you are looking to bring in more people with a special designation or if you are considering sending your brightest through the program, be sure to examine the expressed competencies and determine what competencies you can imply. The CFA designation will provide your organization with a long list of expressed and implied competencies. Let's discuss those in detail so that you can determine if the CFA designation competencies match those of your organization.

First, let's look at expressed competencies in terms of the CFA designation. Expressed competencies are those that we know are covered in the certification curriculum and process. These are easy to determine but it's still a good idea to pick them out, both technical and soft skill competencies. Obviously the CFA program has a list of technical competencies, including knowledge and application of various markets and financial instruments. But what other competencies are expressed in the program and how can those fit in with your organization?

One of the more obvious "soft" competency groups in the CFA program is related to ethics and ethical behavior. Given the current financial situation, high ethics are certainly going to be beneficial to your organization and its future. In the CFA program, candidates are evaluated based on their ability to place integrity over their own interests. This competency obviously has a huge impact in today's environment, in which many financial professionals have fallen because of self-interest over integrity. Among the other ethical competencies in the CFA program are the improvement and maintenance of the candidate or charterholder's professional standing, through education, networking, and appropriate decision making.

In relation to professional competency, the CFA program expresses that duty is also a key attribute, next in importance to ethics. The program stresses that each charterholder has a duty to his or her client as well as a duty to his or her employers. This duty extends into making the correct choices, maintaining professionalism, and keeping every action above the board in terms of ethics. Between ethics and duty, the expressed soft competencies of the CFA program are quite strong.

Once an individual as passed the three levels and becomes a CFA charterholder, he or she can apply for membership in the CFA Institute. The requirements for membership are almost as strong as the requirements for entrance to the program, and bring another level of professional competency into play. To begin with, each local society may have different requirements. But on top of this, a person entering membership after obtaining the CFA designation must have two sponsors, one who is already a member and another who is a supervisor. Obviously the requirement for sponsors will provide another view of the CFA charterholders professional and ethical competency. In addition, the prospective member must be involved on a daily basis in the evaluation and application of financial data, specifically related to securities and investments. The potential member must also supervise this type of activity effectively and may also have taught this activity. Plus, at least 50% of the prospective member's time must be devoted to investment decision-making and the creation of added value through those decisions. These are not only technical competencies but are also leadership and management competencies.

Let's take a look at the competencies we can imply from the CFA program. First and foremost, the program is self-paced, with only the exam schedule as a final deadline for the candidate. As training and development professionals know, a self-paced program of any kind takes a specific type of adult learner, someone who has the drive and ambition to see the project through to the end. Plus, the person will probably have weighed the pros and cons of entering the program pretty heavily by the time he or she makes the decision to enter the program. This in itself shows a high level of analysis and decision making skill. A self-paced learner must also possess a high level of self-reliance and focus in order to complete a course of study. In the case of the CFA program, there are study groups and assistance available; it's just a matter of determining when the time has come to go those resources. In other words, the self-paced learner must utilize self reliance but also be self-aware enough to realize when it's time to reach out. Isn't that a great combination in the field?

Revisiting the CFA curriculum, we see that technical and financial acumen are tested routinely, and in multiple levels of learning taxonomy. This will require that a candidate have the ability to move knowledge through those levels. For example, a less-disciplined adult learner may learn enough to "get by", but not enough to synthesize the knowledge he or she has obtained in the course of study. This probably wouldn't work in terms of the CFA program. The currency of the CFA curriculum combined with the analysis and synthesis of knowledge will also require a candidate to possess leadership and technical decision making skill. On top of all of this, these competencies will prepare a potential CFA charterholder to make the decisions that drive your organization forward.

Clearly the CFA designation tests the competencies of potential charterholders. And because the CFA will come to you with those competencies, the benefits to the organization will be impressive.

In our final discussion, we will look at the CFA designation and the overall benefits at the organizational level.

Copyright 2010 Financial Training Solutions & Bryant Nielson. All Rights Reserved.

Bryant Nielson - Director of Financial Training Solutions - assists executives, business owners, and top performing performers in taking the leap from the ordinary to extraordinary. Bryant is a trainer, business & leadership coach, and strategic planner for those in the capital markets. Nielson's 27 year business career has been based on his results-oriented style of empowering the individual..

Learn more about Financial Training Solutions and our various offerings at: http://www.financialtrainingsolutions.com/cfa-training.php.

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CFA or FRM: Solving the Dilemma for Students

CFA and FRM are two of the leading financial certifications in India. Many MBA students pursue these financial certifications to enhance their financial knowledge. GyanCentral catches up with Aditya Ahluwalia, expert CFA coach to seek answers to the CFA or FRM quandary and also career options after CFA and FRM.

The advantage that a MBA student with a CFA degree have over a MBA specializing in finance?

I have personally done both the degrees. I did my masters in business administration (MBA) from FMS Delhi. The MBA finance degree in my opinion covers about 20% of what gets covered in the entire CFA curriculum (in terms of financial knowledge). A MBA degree is more holistic to management as it will also cover non finance subjects like HRM, systems, marketing and general management. CFA is a certification dedicated to the field of finance. In my opinion no examination is as exhaustive and comprehensive in finance as CFA is.

What are the job opportunities for MBA students after CFA?

The opportunities in the finance world in India though growing are becoming extremely competitive. A lot of MBA students are competing for the same job. During campus placements companies do not have the time to go through each and every resume or interview every candidate. The students who get shortlisted for campus placements are students who have an extra push on their resume. A CFA degree also gives the recruiter a perception that the student has more financial knowledge than just a MBA finance student. Hence CFA does support a lot to get shortlisted for the interview stage of MBA placements. Even after placements the knowledge that a candidate gains is useful in his future job pursuits.

What are the profiles that a MBA in Finance with a CFA degree will be offered?

CFA is a comprehensive exam in finance. So whether it be investment banking or portfolio management or equity research or strategy consulting in the financial domain or corporate finance in a manufacturing company, CFA concepts are going to be directly applicable to your job. For anyone who is interested in a career in the financial domain the CFA designation gives an edge and imparts value to your knowledge and resume. A CFA qualification today is more of a requirement than an advantage for a career in investment banking of private equity. Doing a CFA today is not a guarantee of finding a job in investment banking or private equity, it is depends on your financial understanding and communication skills.

What is the difference between CFA and FRM?

That is a very common question that many students have.. I believe that degrees of MBA, CFA and FRM have to be looked at compliments rather than as competing with each other. CFA teaches you the inside-out of finance, MBA finance teaches you how to link the financial aspect with the overall business management perspective.FRM is a designation which is dedicated to risk management. It gives the candidate a very good perspective about credit, operational and market risk aspect of a business. A lot of students today (including me as a student) have taken all 3 designations. I believe all 3 degrees added to my knowledge and enhanced my employability. I would advise students not do an either or for the courses. CFA and FRM are not standalone designations and are supposed to be complimented with either a MBA degree or work experience.

How should a student decide between opting for a CFA or a FRM?

Firstly students have a misconception that CFA takes 3 years while FRM just takes 2 exams. So they should not base their judgment on the duration of the course. CFA curriculum is much more exhaustive than FRM. In one level of CFA it can be argued that you learn more than two levels of FRM combined.

Coming to choosing between CFA and FRM, if someone wants a more holistic designation in finance then he or she should opt for CFA. The CFA certification does not restrict the domain to any niche in finance and for students who are not sure of their preference in finance should opt for CFA. CFA will teach you risk management, corporate finance, risk management and portfolio management hence the scope is broader. If a candidate is sure that he wants to pursue risk management i.e. any profile in a bank or credit rating agency. The profiles can range from credit risk, relationship management, treasury or any profile related to risk management then one should opt for FRM as it is more direct and relevant to the niche of risk management in finance.

If equity research, investment banking, portfolio management is your preferred field then CFA is the designation to pursue.

Does having cleared Level 1 or Level 2 in CFA have any relevance?

Definitely, mentioning that you are a level 1 to level 3 candidate of the CFA exam holds a lot of weightage. Having cleared level 2 would be equivalent to having a FRM degree. Clearing one level of CFA also has value hence students should not be deterred from mentioning the same in their resume. Even if the candidate decides not to finish the CFA course he or she can still mention level 1 or level 2 in their resume. Students from a non-finance background typically can use the CFA degree to come at par with students from a finance background during their MBA course. The perception issue that majority engineers have about lack of financial knowledge can also be altered after pursuing a CFA course.

Apart from CFA degree other things a student can do enhance his resume?

I have experience in working at a senior level at a fund management company. I did my MBA, FRM, CFA and CIA (an alternative investment certification) which has helped me gain a lot of knowledge. During my MBA degree i also did a large number of NCFM modules which overlap with CFA curriculum and hence is not necessary for every candidate to pursue. Instead of running after random certifications, I would advise students to concentrate on basics. If you have done your MBA from a top tier institute that is good enough. Also doing live financial projects adds a lot of practical knowledge and helps in establishing industrial contacts which can be useful during placements. Apart from the above mentioned financial certifications, I do not believe any other course will add significant value to a student's resume. Also the CFA society networking events are quite useful. They open up good networking opportunities.

What questions should MBA students who have successfully cleared CFA or are pursuing CFA expect in interviews?

Equities is very big in the Indian market and given that many back-end and front-end equity research firms hire from top management schools hence being thorough with your valuation concepts, relative P/E multiple, DCF valuation. Understand corporate finance concepts like cost of capital and WAC should be revised well. NPV, IRR are questions which every candidate must expect in the interviews. Concentrate on basics and then go to advanced terms. Majority of the students will be fresher's in financial domain hence interviewers expect clarity of basic concepts which a student must be well-versed with. Value a company on your own using P/E or DCF model and be deep with it. Do the simple things well.

The author, Aditya Ahluwalia is a lead instructor at Finstructor, Mumbai. He has cleared all levels of the CFA and FRM exams with top sectional performance across levels. Aditya is a computer engineering graduate from Punjab Engineering College, Chandigarh. He has subsequently completed his MBA from the Faculty of Management Studies (FMS), University of Delhi. Aditya currently works in the Indian equity markets as a part of the portfolio management team of one of the largest domestic fund houses. He brings with him invaluable experience from the fields of fund management, equity valuation, portfolio management, risk management, quantitative analysis and behavioral finance. Aditya has over 2000 hours of teaching experience to his credit. He has been actively conducting training classes for the CFA and FRM programs for over 3 years.

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Seven Factors Why E-Learning Will Be the Best Solution for CFA Exam Prep

So what is the best CFA exam prep? With so many CFA exam prep out there today, you certainly have a wide range of selections that you could choose for your own preference. If you are wondering which of the CFA exam prep courses out there are suitable for you, you should perhaps turn to e-learning for additional help. Remember your probability of passing the CFA Level I examination on the very first attempt is only about 35%. This percentage is even lower if you are not a native English speaker or if you are taking the examination outside from the US or Western Europe.

Indeed, a lot of CFA candidates are looking to study online rather than reading hardcopy publications or going for school classes. The following are 7 crucial advantages why you should opt for e-learning for your CFA exam prep.

Benefit 1: Cost.

Are you aware that the typical price of going to classes for your CFA studies is more than US$2,000? On the other hand, many of on-line programs for the CFA exam prep is only a tiny fraction of that and can provide you with the similar information that you needed. You would also save money and time as you need not travel to the classrooms to do your learning. In addition, you could avoid from purchasing additional textbooks that will burn a hole in your pocket.

Benefit 2: Interactive Programs

Those CFA Exam prep e-learning programs uses advance technologies as well as a range of tools which can assist you much better in your studies for the real CFA exam. For example, you are able to get information, tutorials, practice questions, and even online group discussions. All these will provide you with a lot of useful tips and recommendation that you can apply during the exams. If you are not sure about some subjects, you can just post your questions online. Experienced tutors as well as other CFA members will answer them quickly.

Benefit 3: Study on your own personal time.

With on-line preparation, you are able to study at your very own pace and allocated time. This study method will allows you not to miss a single lesson, unlike those offline classes. This means that you never have to worry about being on time for classes.

Benefit 4: No classmates to distract you.

Although having classmates are generally a good thing, there are just some students that are annoying or keep bothering you during classes which makes you unable to focus on what the tutor is really teaching. This is particularly true, if the students are forced to take the CFA program against their will. Indeed, you will find plenty of fellow students who will try all their best to slow you or distract you throughout the lessons. With e-learning, you are able to study on your own and really concentrate on what you should touch on a particular day.

Benefit 5: Easy Reference

On-line programs are simple to bookmark. This means which just a simple click; you are able to look at your online reference. You can easily leap to the various sections quickly. As all the program materials is in 1 single location, at any point in time you are not sure about something, you can look for your answers almost instantly.

Benefit 6: Huge Number of Practice Questions.

The very best method to pass the examination would definitely be doing several mock exams so that you are able to experience the true feeling when it comes to your real CFA examination. Most of the online CFA exam prep providers supply hundreds, or even thousands of mock CFA exam questions. By doing the practice questions several times, passing the CFA exam will actually be very easy for you.

Benefit 7: Portability

If you had signed up with the CFA exam already, you will realize how heavy the official CFA study materials are. You certainly do not want to add any more weight to that! With the online CFA exam prep program, you do not have to carry around additional massive textbooks, files or notes.

Nevertheless, some students discover it to be helpful to combine it with offline coaching and classroom tuition. Indeed, you should always consider going for online CFA Exam prep so that you can pass the CFA Test easily.

So if you want to look for more CFA Salary and CFA Test, please proceed to the CFACareers.org website. You will find all information related to the CFA Designation, from study materials to discovering the right career path!

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How to Become a CFA

How to Become a CFA - Introduction

If you are wondering on how to become a CFA, you are at the right place! Here, I will talk on every single thing you got to know on how to become a CFA. For those who are uninformed, the Chartered Financial Analyst (CFA) credential is one that is strongly associated to financial analysts who are in the top of their fields as far as financial skill and knowledge is concerned. Those with a CFA credential can command some of the highest paying salaries in the finance industry. In addition, the CFA designation will also open the doors to various other financial career paths such as becoming a hedge fund/private equity research analyst, portfolio manager and fund manager. This CFA credential is administered by a non-profit organization, which is known as the Chartered Financial Analyst Institute.

How to Become a CFA - Requirements for the CFA Credential

So how to become a CFA? Well, to obtain the Chartered Financial Analyst credential, a person has to goes through a self-study course, which takes at least three years to complete. The examination process involves three tests, with each taking a whopping six hours to finish. In addition to the exams, one also needs to enter into an agreement so that he or she will promise to uphold the high ethical standards as required by the CFA Institute.

There are qualifications that must be met prior to acceptance into the CFA program. Firstly, you have to be in the final year of a university degree program or hold a degree already. An alternative to the degree requirement is having at least four years of employment in the investment field.

Prior to obtaining the CFA designation, the candidate must have met the education requirement or completed the four years of investment work experience. The candidate is also required to become a CFA Institute member at both the national and local levels. As of January 1, 2011, all applicants must hold a passport. That is all regarding the requirements on how to become a CFA.

How to Become a CFA - The Timeframe to Earn the CFA Credential

In general, most individuals will take one exam each year for three years. This is assuming that each exam is passed on the first attempt. Considering that you either must have a four-year degree or four years of working experience, the minimum time it takes to complete the CFA course is 7 years. If you do not include the university studies and work experience, it is estimated that most CFA candidates complete everything within 4 years. The CFA Institute also recommended that candidates spend at least 300 hours to prepare for each exam.

How to Become a CFA- The Costs Associated with Obtaining a CFA

As of 2011, new enrollees into the program will have to pay an enrollment fee of $405 to $490 US dollars. In addition, you need to pay for the registration of the CFA exams. The pricing is tiered and depends on whether you enroll by 16 March, 24 August, or 16 September. Registering for the exam by the first date will cost you $630. For the other two dates, the costs will be $720 and $970 respectively. Basically, the sooner you enroll, the cheaper is the course for you.

The exam registration includes the prices of the CFA textbooks. You can get a $40 discount off the total cost if you order the curriculum as an e-book. Otherwise, you can order the curriculum in hard copy format but will have to pay for the shipping and handling fees. As an example, if you enroll for the CFA Level I Exam by 24th August, your total cost will be the $405 in enrollment fee plus the $720 for the exam registration less $40 for the e-book curriculum, which will equal to $1,085. I think I have answered all your questions on how to become a CFA in detail by now!

So if you want to look for more CFA Careers and great CFA Salary, please proceed to the CFACareers.org website. You will find all information related to the CFA Designation, from study materials to discovering the right career path!

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