One of the toughest exams in finance is about to get more
topical, and for some, more complicated. Starting next year, Levels I and II of
the exam to become a chartered financial analyst will include more in-depth
questions on fintech, including machine learning and ethics tied to the
use of technology within a work setting.
The Level III test, which focuses on portfolio management
and planning, will include more questions on the latest practices in passive
and active equity investment and professionalism in the investment management
process. The changes will reflect an updated curriculum for the 2019 CFA
Program.
“Fintech is no longer nice to know, but a need to have … a
must have,” says Stephen Horan, managing director of credentialing at the CFA
Institute. “Fintech is a class onto itself. It needs its own taxonomy.”
The CFA curriculum, which runs about 9,000 pages, has been
updated to reflect these changes. In the past its fintech curriculum focused on
algorithms and high-frequency trading. Now it includes machine learning,
distributed ledger technology (blockchain) and cryptocurrencies.
Studying for the CFA test averages 1,000 hours. The Level I
test is given twice a year — in June and December — but Levels II and
III are tested only once a year.
The tests are not mandated like the Series 7, 63 and 66
exams because the CFA charter is not a license; it signifies a level of
competency and experience — a “gold standard,” according to the CFA
Institute.
About one-third of professional CFA charterholders manage
assets for private clients, including wealth managers, brokers and RIAs, says
Horan. About 20% work in portfolio management and 15% in research analysis.
Less than half of test-takers pass the exams, and one in
five fail to complete all three.
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