Certifications and professional designations have a value to the organization and the individual only if they are recognized or explainable in terms of the standards they uphold. In other words, both individual and organization look for designations that can be used to market, lend credibility, and explain standards, education and experience. Many organizations have internal certification or designation programs and these are a great way to get associates involved and retain them. But what does an internal certification actually prove? Everyone inside the organization knows what the certification means, what the person had to do to get it, and what standards he or she was held to. But outside of that organization, what value is the certification to shareholders, customers, or other organizations? The CFA designation is well known throughout the world, and because of its structure, gives your organization and each individual the recognition and standard they deserve. Let’s find out how.
First, The Economist ranked the CFA designation as the “gold standard” in investment analysis designations and certifications. This is a weighty accolade and certainly puts the individual and the organization at a higher level. But what other recognition and standard exists to place the CFA at the “gold standard” level? There are several areas, including worldwide regulatory recognition, community recognition, standards related to the curriculum, and types of companies that look for CFA charterholders.
Regulatory recognition is important in worldwide financial circles, especially if holders of a designation plan to work in global markets or in countries other than their own. CFA charterholders reside in just about every country around the world, according to the CFA Institute. This is just one piece of the recognition puzzle. Several countries’ regulatory bodies have waived some licensing and examination requirements for candidates who have passed Levels I or II or have already obtained their CFA designation. This means that these charterholders are licensed to practice in multiple areas, such as Australia, the U.S., four provinces in Canada, Greece, Hong Kong, Singapore, and Turkey. If your organization is involved in investment operations in these areas, your CFA charterholders can practice without further licensing or examination. The fact that the regulatory authorities of these countries have extended recognition of the CFA designation provides a high standard of authority.
The community within which an organization operates is also an important source of recognition and standards. For example, the National Council for Interior Design Qualification is a recognized standard within that industry, but is most likely meaningless outside of it. But keep in mind that the financial industry in general is loaded with certifications and degrees such as MBA’s, Certified Public Accountants, and Certified Investment Management Analysts, to name only a few. So when it comes to choosing a designation, it all depends on what kind of work the person does, what kinds of organizations will hire him or her, and what kind of network exists. CFA charterholders are involved in investment, financial analysis, and corporate financial planning in large and small companies everywhere. These CFA’s are located in commercial banks, investment banks, consulting firms, insurance companies, financial research foundations, and mutual fund companies, so the range of the network is wide. Since various types of organizations hire CFA’s, this recognition and standard is also important at both the group and individual levels. The CFA network is over 100,000 strong in countries around the world. This is a large network, but when you consider that the focus areas of CFA’s are fairly narrow, the network becomes and even better organizational and individual tool.
We’ve discussed the nuts and bolts of the CFA curriculum and content previously. But how does this have an effect on the recognition and standards that come with the CFA designation? The fact that the curriculum is updated annually and is completely overhauled every five years after heavy industry analysis creates a standard for both inside and outside the organization. This curriculum development process keeps the organization from having to “push” the recognition on an educational level, because marketing a changing, dynamic curriculum is easy. But the changes to the curriculum also indicate that any CFA charterholder will have current knowledge about the global financial markets. On top of this, the tri-level examination structure ensures that each person has knowledge, comprehends that knowledge, can apply it, and can go on to synthesize it as part of his or her every day activities.
Looking closer at the curriculum structure, the CFA Institute provides a learning experience that is broad-based, and, as we’ve discussed, covers a wide variety of topics. The experience uses professional journals and practitioner information as part of the curriculum. This type of learning should also serve to add to the recognition and standards defined by the CFA program.
If your organization’s jobs fit the CFA standards, you may want to consider looking for candidates with the CFA designation – or putting your existing associates through the program. As you can see, the recognition and standards set forth by the CFA program can benefit both the organization and the individual.
Next, we will look at competencies covered, both implied and expressed, in the CFA program.