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Thursday, 23rd January 2020
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Achieving the 'gold standard' - Irish professionals rise to CFA challenge Back  
As 45 Irish investment professionals are awarded the Chartered Financial Analyst (CFA) charter, Bob Johnson and Joe Kavanagh speak to FINANCE about the benefits for both firms and individuals of the qualification described as the 'new MBA' by the Financial Times, and the 'gold standard' by The Economist.
An MBA and a first class honours degree is no longer enough to guarantee yourself a top position in the competitive investment market. Candidates must increase their qualifications and education to stick out from the crowd. This is the view of Bob Johnson, managing director of the Chartered Financial Analyst (CFA) and CIPM programs division, and Joe Kavanagh, head of performance measurement and risk analysis at KBC Asset Management, and president of the Society of Investment Analysts in Ireland (SIAI), which is a member society of the CFA Institute, which administers the programme.

The CFA Program is a college graduate-level, self-study curriculum and series of examinations that test candidates around the world in ethical and professional standards, equity, debt, and derivatives analysis, alternative investments, financial statement analysis, quantitative methods, economics, corporate finance, portfolio management, risk management, asset allocation, and performance measurement. Candidates take, on average, a little more than four years from initial enrollment to the time they complete all requirements for the CFA designation

The CFA qualification is increasing its popularity as one of the best ways of increasing the job hunter's marketability in the investment management sector. Described by the Financial Times as 'the new MBA', qualification growth has exploded over the last decade in a truly global way. With always strong numbers from the traditional investment management hot spots such as Wall Street and the City of London, growth has been widespread throughout the world, with the CFA proving most popular in recent years in China, India and Europe.

The global rise in popularity of the CFA is also evident in Ireland. In six years the amount of candidates sitting the exams in Ireland has increased by 250 per cent, and in November, a record 45 professionals were awarded the CFA designation at an awards ceremony hosted by Johnson in the Guinness Storehouse. There are now 133 CFA charter holders in Ireland.

So what makes the CFA so special and why is it so becoming more popular?
Speaking about the increasing demand for the CFA qualification, Johnson said that the growth in applicants is a reflection of the investment management industry itself, and of how the sector has grown and flourished, adding that recent strong economic growth in China and India has led to equivalent growth rates in CFA applications in the countries.

Within the sector, the CFA has become one of the best methods for job hunters to discriminate themselves from other job applicants. Kavanagh says that with so many candidates achieving first class and second class degrees, often supplemented by Master degrees, it can be hard to distinguish oneself, which is where the CFA comes in.

Described by The Economist as the 'gold standard' in education, the CFA's global branding means that the CFA qualification is recognised all around the world, and is a standard to which all charter holders are judged, whereas typically the grading of university degrees cannot be compared like for like.

However, this 'gold standard' brings challenges for candidates, and the CFA has developed a reputation for being difficult to attain. A reputation that proves to be true somewhat, with only one in five of the people who enter the program earning the charter. As Johnson says, you have to 'shoot the number to make the cut'. However, he disputes the claim that the exams are getting harder - rather it is the profile of the people taking the exam that is changing, with people will different types of professional backgrounds, not just those in investment management, now looking to earn the charter.

The growing number of candidates and the varied nature of candidates all hope to benefit from the expertise that the CFA intends to give. Kavanagh notes that there is a 'broad church of an interesting span of employers', all hoping to increase 'the common knowledge of the firm' adding, that, 'firms are expanding the services that they are offering their clients, and they want to, add value over and above their basic service'. Moreover, for firms doing business across borders, having a complement of staff with the CFA charter can improve their chances of winning business. For example, Kavanagh says that when dealing with American firms, a question being asked more and more is 'how many CFA holders does the firm have'.

The importance of the CFA is also being recognised by Irish employers, with an increasing amount of jobs ads requesting that applicants have their CFA qualification - there are examples of jobs that favour CFA holders currently on FinanceJobs.ie.

Apart from increased career opportunities, Kavanagh highlighted the importance of the confidence factor for the individual and the firm. By having more CFA holders, a firm increases its level of professionalism and for the individual he/she develops strong analytical skills. For Johnson, the CFA charter gives the individual confidence and as he attests to a great sense of pride about being a member of the charter.

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