Are You Smarter than a
NEW CFA Charterholder?
CFA Society of Minnesota
Michael G. McMillan, PhD., CFA, CPA
Four Virtues of the CFA Charterholder
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ETHICS
TENACITY
RIGOR
ANALYTICS
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Total CFA Registrations & Members
May 2009
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New Candidate Enrollment
May 2009
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June 2009 Exam Results
 128,506 registered candidates from 163 countries;
104,116 sat for the exam
 182 exam sites worldwide in 89 countries
 19% no-show rate (10-year average of 25%)
 Overall pass rates (weighted average 45%)
46%: Level I (44% avg. from 1964-2009)
41%: Level II (49% avg. from 1964-2009)
49%: Level III (64% avg. from 1963-2009)
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Charterholders and Candidates
 As of 22 March 2010, there are 139,701
candidates registered for the June 2010 CFA
exam (all 3 levels) worldwide.
 Over 62,000 candidates are projected to
register for the December 2010 Level I CFA
exam. Currently 11,637 Level I candidates are
registered for December.
Candidate Enrollments
(December 2009 and June 2010 exams)
Canada
15,787
U.K
13,081
U.S.
54,650
Korea
8,594
P.R. China
22,387
Latin/South
America
3,309
South
Africa
2,846
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Singapore
6,482
Hong Kong
10,028
Taiwan
2,568
Australia
5,148
2011 Registration/ Exam Change
 Effective 1 January 2011, a valid
international travel passport will be
required for CFA Program enrollment
and exam registration. This will apply to
all candidates.
 This means that a passport will be
required to register for the exam and to
be admitted to the testing facility.
First CFA Exam, 1963
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Today’s CFA Exam
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The CFA® Program
A graduate level program that takes a
generalist/foundations approach to
investment analysis and portfolio
management and emphasizes the highest
ethical and professional standards for the
investment profession.
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A Practitioner Driven CFA Program Process
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The CFA Program Cycle
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Bodies of Knowledge
Global Body
of
Investment Knowledge
Candidate
BOK
PWM
BOK
CIPM
BOK
Frontier (emerging)
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Purpose of Practice Analysis Process
 To ensure the continuous development of the Global
Body of Investment Knowledge (GBIK)
 GBIK: The comprehensive outline of mainstream knowledge for
the investment profession, encompassing an entire career –
novice through expert – for both generalists and specialists.
 To identify the relevant content for the CFA Program
Candidate Body of Knowledge (CBOK)
 CBOK: The inventory of knowledge and responsibilities
expected of the professional practitioner of investment
management at the level of a new charterholder. It is the
roadmap for the CFA curriculum development and is organized
into four functional areas: Ethical and Professional Standards,
Investment Tools, Asset Valuation and Portfolio Management.
CFA Program Candidate Body of Knowledge
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Ten CBOK Topic Domains
Ethical and Professional Standards
Quantitative Methods
Economics
Financial Reporting and Analysis
Corporate Finance
Equity Investments
Fixed Income
Derivatives
Alternative Investments
Portfolio Management and
Wealth Planning
Investment
Tools
Asset
Valuation
Portfolio
Management
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Curriculum
The topic focus and learning focus differ at each level
Topic Focus
Learning Focus
Level I
Investment Tools
Ethical Standards
Knowledge
Comprehension
Level II
Asset Valuation
Ethical Standards
Application
Analysis
Level III
Portfolio Management
Ethical Standards
Synthesis
Evaluation
The curriculum at each level is organized into 18 study sessions
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Principles of Curriculum Development
Teach the knowledge and skills required of a generalist
• Identified in the Global Practice Analysis
• Defined by CBOK and DUO
Select, develop and regularly review materials that:
• Are appropriate in a distance-learning environment for a global
candidate base
• Are clear and accurate
• Contain numerous examples/problems with solutions
Avoid curriculum materials that are:
• Predominately empirical/historical in nature
• Topical (current events oriented or survey articles)
• Country specific and/or specialist in nature
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Custom Curriculum
Custom curriculum gives us flexibility to:
Publish only the pages of a reading that we wish to
require
Add pedagogy (examples, questions, problems)
where needed
Make improvements to readings based on practice
analysis
Update examples and scenarios to current
environment
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2009 Curriculum Changes
All MC and IS questions have 3 answer choices
•
The fourth choice is often ineffective
•
Exams are adequate samples of CBOK
•
Time management is a factor in exam success
but the primary objective is to determine
mastery of the targeted KSA’s
•
The Standard Setting process evaluates exam
difficulty over time
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2010 Curriculum Major Changes
• Increasing proportion of curriculum developed by
CFA Institute
• Revision of Level I Equity Asset Valuation readings
• Revision of Level I and II Financial Reporting and
Analysis Readings for IFRS and US GAAP changes
• Expansion of Private Wealth Management
curriculum (Level III)
• Expansion of end-of-reading problem
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Standard Setting
•
The objective of Standard Setting is to
determine the score that represents acceptable
competence or mastery of the concepts
•
Conducted by independent psychometricians
•
Group represents member and candidate
demographics
•
Each participant works independently to
evaluate each exam question/answer
•
Average score = recommended MPS
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The MPS Process
• CFA Institute Board of Governors (who are
CFA charterholders) determines CFA Exam
Minimum Passing Scores
• Primary input is standard setting
• Pass rate for each level is a residual
determined by each level’s MPS
• Since 1996, the Board has considered
performance on Ethics for candidates in a
narrow band around the MPS
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Volunteer Opportunities
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Practice Analysis
Curriculum Development
Curriculum Review
Exam Development
Exam Review
Grading
Standard Setting
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Chartered Financial Analyst®
A Symbol of Integrity and Professional Excellence
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