CFA enrolment jumps in emerging markets

A record 140,000 people have enrolled in programs leading to the CFA designation worldwide, with a substantial increase in enrolment coming from emerging economies.

Both India and Vietnam have experienced 143% growth in the number of first-time candidates, and China and Russia both have well over 50% rate of growth. Of course, starting from a relatively low base makes large percentage increases easier.

The CFA has the same exam and content standards worldwide, which carries a lot of cachet in the global financial sector, says Robert Johnson, a managing director of the CFA Institute. “If you earn the CFA that means the same thing in Tokyo as it does in Toronto. You’ve been held to the same high-standards and people in the marketplace understand that.”

Canada’s growth has been a more modest 33% growth, but this is on top of an already established member base of about 11,500, compared to 335 in India and 1,175 in China. Canada still fields more first year candidates that either of those two countries.

But the number of candidates fielded doesn’t translate into fully designated members. Part of the prestige of the CFA designation is that few will earn it. Johnson notes that only one in five CFA candidates successfully completes all three-levels of the self-study program and are admitted as a member. Level I is administered twice per year, in June and December, and Levels II and III are administered just once per year, in June.

The self-study candidates are expected to put in about 750 hours of study over four years and must have more than four years of industry experience.

Ian Rakita, acting director, Goodman Institute in Investment Management at Concordia University’s John Molson School of Business, thinks that when it comes to training CFA’s, Canada is ahead of the curve. The program he oversees offers an MBA program where students are also trained for the CFA.

Rakita, who holds a Ph.D. in Finance and a CFA, says this adds structure and professionalism to the designation, while allowing candidates to overcome some of the hurdles of self-study.

“Seventy per cent of our students are working full-time in some capacity and generally related to the industry. They know that they need the CFA designation to further their own career and the MBA is certainly a cherry on the icing on top of the cake,” he says. “More often than not, people working full-time lack a certain type of structure and the discipline to have to come home at night and study three to four hours on top of a demanding career.”

The Goodman Institute’s program had an 89% pass rate on the Level I CFA exam last year. In comparison, the global pass rates are in the low 30 to high 40 percentages, Rakita estimates.

“We are almost double the worldwide pass rate, so we seem to be doing the right things,” Rakita says.

The CFA Institute expects to have 100,000 members worldwide by December 2007, up from 87,600 in December 2006. Currently, the CFA Institute has more than 90,900 members in 134 countries.

Filed by Mark Noble, Advisor.ca, mark.noble@advisor.rogers.com