June 2013

CFALA e-Newsletter: June 2013

Welcome to the CFALA e-newsletter, a periodic publication with stories about noteworthy events and programs sponsored or hosted by the society, guest articles by members, book reviews, and other items of interest to CFALA members. Click on the headlines below to read the full stories. And if you’d like to contribute a story suggestion or, even better, write an article, we’d love to hear from you. Please email Executive Director Laura Carney at laura@cfala.org or steve@silverfoxco.com.

In this issue ...


Volunteering is One of the Best Ways to get the Most out of Your CFA Membership

As a volunteer you will be connected to other members and volunteers in carrying out the society’s mission, whether that is in mentoring newly registered CFA Level 1 test takers or planning a summer golf tournament for all to enjoy.  There are numerous of ways to give back to the community and it all starts with saying YES to volunteering.

The next step is to find an area of interest and consider where you’d like to invest your time and effort. Combining your passion with a sense of giving back will enhance your volunteer experience.  In general, volunteering can help you make new friends and provide an important networking opportunity. Volunteering can aid in continuing to develop your social and communication skills and it can even provide relevant career experience.

You can decide how active and involved of a volunteer you want to be.  Most volunteers test the waters by assisting on smaller projects. Very often the volunteer quickly realizes how fulfilling it can be to help others and to be part of the growth in your local society.  Consequently, it is rather common for volunteers to become increasingly involved as their tenure progresses.

With time, it also becomes clearer what opportunities are best aligned with your interests and abilities.  If working with people one-on-one is important to you, then you might consider signing up as a candidate mentor.  Someone who enjoys creative writing or need to contribute from home might want to be a content writer or contributor for the CFALA newsletter.  In fact, this very article you are reading right now is a volunteer submission.

You may not know this but our entire society runs on everyone’s ability and desire to help advance our charter and our community.  Volunteer efforts assist not only other society members but new registrants, local communities, high schools and colleges as well.

Our volunteers’ work is so important that we like to recognize and appreciate them in as many ways as possible.  Each month a volunteer is showcased as the “Volunteer of the Month” and recognized for their contributions to the society. Their story is shared with other society members through the email newsletter and is published on the CFALA homepage.  Additionally, awards are presented at the annual dinner to recognize and give thanks to our hard workers.

Lastly, in acknowledgment of everyone’s efforts and to give those interested an opportunity to ask questions and get involved, the society hosts a yearly summer Volunteer Social.  This year, volunteers will be able to choose between a Westside social at Wokano in Santa Monica and a Downtown social at LeKa.  Please sign up for these events and come check out what volunteering is all about. 

By Akiko Hayata, CFA, Volunteer Committee Chair, CFA Society Los Angeles 

CFA Institute Opens Global Registration for Claritas® Investment Certificate

New education program sets education and ethics standard for financial services sector

At the CFA Institute Annual Conference in Singapore last month, CEO John Rogers officially launched global registrations for the first new major examination initiative  from CFA Institute in fifty years: the Claritas® Investment Certificate.

As reported in the CFALA February e-newsletter, the Claritas program is intended to provide an overview of the fundamentals of the investment industry for those who work alongside investment decision-makers – from IT to legal, PR and marketing to human resources. With the launch of global registrations, everyone in the financial services industry can now take a clear step to demonstrate his or her commitment to restoring trust and upholding ethical standards.

Feedback from CFA charterholders was a driving force in the decision of CFA Institute to create and launch the Claritas program. In the 2011 member satisfaction survey, 68% of respondents indicated that it is important for employees not directly involved in the investment decision-making process to increase their knowledge of investment fundamentals. In the 2013 survey, more than 65% of respondents indicated that a lack of ethical culture within financial firms has been the biggest contributor to the decline in confidence. The Claritas program helps CFA Institute to address these concerns – and will introduce the organization to entirely new audiences, thereby augmenting the value of the CFA Program.

Randi Tolber, CFA, from the Industry Relations team at CFA Institute, has been working with firms throughout Los Angeles and Southern California to introduce their staffs to the Claritas program.

“The Claritas course has provided CFA Institute with a fantastic opportunity to meet and collaborate with the Societies and local companies to implement the program,” said Tolber. “Our hope is that this connection will only strengthen as more companies and individuals sign up for the course.”

The Claritas pilot program launched in January and concluded in April, with 70 firms and over 3,300 participants taking part around the world. Participant companies ran the gamut, from global financial services companies, pension funds, communications agencies, an international media conglomerate, and a university in Argentina, all of which expressed enthusiasm and support for the program. Pilot participants can expect to receive their results in July.

Nathan Palmer, CFA, Vice President and Portfolio Manager at Wilshire Associates and Dave Cary, PhD, CFA  will serve as the coordinators for the CFALA Claritas effort. CFALA plans to host two Claritas instruction sessions a year in Los Angeles, and may explore taking the course “on the road” to reach interested companies and participants.  CFALA's first Claritas Review Program will kick off on September 24th in downtown LA. 

Wilshire Associates participated in the Claritas pilot program, and Palmer said that the company has been thrilled with the results to date.

 “We were very excited to participate in this new program from CFA Institute and to support its social mission of a more knowledgeable and ethical industry,” said Palmer. “As a company which already offers the CFA Program to employees in investment roles, we felt this was a great opportunity to extend the education platform to a broader group of staff.”

Those interested in learning more about the Claritas program can visit and register for the course at www.cfainstitute.org/claritas, or contact Randi Tolber directly at Randi.Tolber@cfainstitute.org

Third Annual CFA Society Los Angeles Golf Tournament

After tremendous success last year, CFALA is excited about its third annual Golf Tournament on Monday July 29th at Friendly Hills Country Club in Whittier.  Although Friendly Hills (www.friendlyhillscc.com) is a private country club that has hosted regional qualifying events for the U.S. Open and U.S. Amateur, the Golf Committee notes that all participants, no matter the skill level, will enjoy the course. The event continues to grow with over 100 participants expected this year after 88 played in 2012.  Golf committee Chairman Jason Totedo observes, “All the golfers said they thought the event was a great way to spend time with clients and support the local CFA chapter at the same time.”

 An opportunity to spend a great day on the golf course with friends and clients is largely due to the generous support of its sponsors.  The major sponsor again this year is BlackRock, with Pershing Advisor Solutions providing the logo golf balls and Doubleline sponsoring the lunch.  Dedicated CFALA staff members Laura Carney and Diana Ravel along with Golf Committee members and volunteer MBA students will also make the day a memorable event.

The event commences at 11:00am with a coffee and pastry networking event in front of the Club.  This is followed by a putting contest and requisite practice at the driving range.  After receiving box lunches, the golfers tee off at 1:05pm.  The beauty of this event is that it’s a scramble, where each foursome comprises a team, and everyone hits from the location of the best previous shot.  This enables everyone to participate in its team success as everyone has a chance to hit that great shot.   Golf Committee member and weekend hacker, Mark Davidson, notes “It was nice seeing pars on my score card even though I shanked many a shot.”   There will be contests such as closest-to-the-pin for men and women, hole-in-one, longest and straightest drives (both men and women) and a par-3 bull’s eye competition. Prizes will be awarded for these contests as well as the top three teams.

 It can get warm on the course, so participants are encouraged to hydrate, wear sunscreen and a hat.  Fortunately there will be water, soda, and beer provided at various holes on the course.  Also, appropriate golf attire must be worn and includes collared shirts (tucked in) for men.

Once golf is finished, people can clean-up and change in the clubhouse, then move into banquet area for a cocktail reception.  This will be followed by a buffet dinner and a raffle, where some fantastic prizes, both golf and non-golf related, will be raffled.

Participants are encouraged to register early.  The early bird fee is $100 for CFALA members who register prior to Monday June 24th.   The price for CFALA members increases to $120 after June 24.   Registration for non-members prior to June 24 is $120 and $140 thereafter.

For sponsorship interest or further information, please contact Jason Totedo at Jason.Totedo@ampf.com.  CFALA is also inquiring about volunteers for next year’s committee so please contact either Jason or Laura Carney at Laura@cfala.org

The 2013 CFA Society Financial Advisors Contest

The 2013 CFA Society Los Angeles (CFALA)  & California Council on Economic Education (CCEE) Financial Advisors Contest was held on May 22nd at the Los Angeles Branch of the San Francisco Federal Reserve. This was the conclusion of a semester-long program for over 103 participating schools.  The record number of schools was reached with the help of over 45 CFALA members who dedicated their time to help students by either going into a classroom and teaching a lesson or being a contest judge.

The Financial Advisors Contest is made up of two divisions: Bulls & Bears and Warren Buffett. Bulls & Bears is a quiz bowl, aimed at students who are just learning the basics of personal finance. Teachers use a variety of materials to teach students about income, saving, credit and the language of investing. This year, the top ten teams were invited to the Los Angeles Branch of the San Francisco Federal Reserve where they faced off in four rounds of game show-style questioning. Teams came from across the state including the team from Mira Loma High School in Sacramento which had to wake up at 4a.m. to fly into LAX.  The students of Walnut High School went home the Bulls & Bears champions.

Warren Buffett is made of students who have already passed through the basic elements of finance and are ready for a bigger challenge. In this division, student teams of four develop an investment portfolio based on an investor profile, thus taking on the role of a financial advisor. Students develop a strategy for an investment portfolio that is appropriate given the goals and objectives of the investor. Only five teams are invited to the finals where they had to present their portfolio to the panel of judges. The panel of judges included CFALA  members Roger Gewecke and Alan Parks.  The students of Loyola High School won the Warren Buffet Division.

The Capital Markets Contest took place the next day. Six teams from the greater Los Angeles area, guided by CFALA mentors, were invited to the finals. Students used PowerPoint presentations to explain the connection between the economy and financial markets. They were questioned by three judges: Bob Parry, former President and CEO of the San Francisco Federal Reserve Bank, Asha Joshi, former CFALA President and Managing Principal of Payden-Rygel, and Robert Kleinhenz, former President of the Los Angeles Chapter of the National Association of Business Economists and chief economist at the Kyser Center for Economic Research.  In Round 2, participants were presented with a report with data and graphs, and given 45 minutes to analyze the economy and develop policy prescriptions. All three judges expressed their admiration for the students and the quality of their presentations. First place went to Centennial High. Teacher Brett Dobson and his students each received a check for $500 and a two day trip to New York. Second and third-place winners Loyola High School and Long Beach Polytechnic also received cash prizes. 

CCEE Executive Director Jim Charkins and Director of Teacher Relations Elle Charles expressed their appreciation for the support that CFALA provides both in terms of financial assistance and the time and energy donated by the CFALA mentors.  “It is clear that this contest could not happen without the help of CFALA. This organization is having a tremendous impact on the students of the greater Los Angeles area.”

California Council on Economic Education (CCEE) is California’s leading provider of economic and financial literacy education to K–12 teachers and students. Their programs help teachers and students make better personal and financial decisions, which improve their ability to succeed and compete in the global economy.  CCEE also offers a mentor program that utilizes community volunteers to share their expertise with students. 

The Value of CFALA Membership – A personal story

I’ve been a member of CFALA for many years.  CFALA (and the CFA Institute) have historically and continue to provide value to me as a financial professional by providing access to a community of thought leaders with unique perspectives and great ideas.  Perhaps the best way to illustrate is to give you a glimpse of my experience.

Years ago, Larry Brody, a CFALA leader, was insightful in suggesting that the psychology of decision making, or behavioral finance, was important.  As Meir Statman says, “People aren’t rational, they’re normal.”  He invited CFALA members who had an interest to come together as a Community of Interest to share ideas and collaborate with emerging research from academics in behavioral finance and particularly how to apply them in real life.  This was the origin of the Applied Behavioral Finance Group (ABFG).

The group was formed with about a dozen members who exchanged emails, formed a collaborative website, and began to forge a working dialogue with researchers in the field.  We scheduled conference calls periodically to share ideas – and invited those who had interesting emerging ideas to present a program to CFALA.  We scheduled at least 4 programs per year, but the greatest value was in sharing the research that was emerging.  In effect, the ABFG became a curator for me of what information was important and how I could expand my working knowledge in behavioral finance.

I have accumulated a lot of information over the years and have established relationships with researchers and practitioners who are intrigued with these ideas and who periodically provide new directions that are invaluable resources.

At least one characteristic of charterholders that distinguishes us is what I describe as intellectual curiosity.  We become intrigued with an idea and are energized by exploring it to enhance our working knowledge.  The CFA Societies provide a channel to network with colleagues in exercising our intellectual curiosity in addition to the ability to build numerous working relationships with people that matter.

CFALA has nine communities of interest (see the website for descriptions and leadership) that facilitate exchanges of ideas and provide opportunities for our members to network and build relationships.  There are numerous ways where CFALA contributes to growing education, including committees that facilitate areas such as Advocacy/Ethics, and advanced education.

I strongly believe that CFALA has helped me grow as a professional.  I’m a believer – and joined the leadership team to do what I could to help build the organization and our framework that provides value to our members.  I encourage you to help us grow by contributing ideas that will shape the direction of our profession.  Get involved with an activity where you have a personal interest.  It will definitely be time well spent.

Mark Harbour, CFA – Vice President, CFA Society Los Angeles  

CFA Institute Honors Outstanding Investment Professionals for Key Contributions to the Profession

CFA Institute honors CFALA member Joan Payden, CFA with the Award for Professional Excellence.  Payden is the President, CEO, and founder of Los Angeles-based Payden & Rygel.  Read more...  

Origami Challenge's $50,000 Grand Prize Winner

Origami Idea Challenge announces that Dean Pagonis, an MBA student from the UCLA Anderson School of Management, won the grand prize for the first OIC.  It should be noted that Pagonis attended the joint CFALA-OIC event that was held earlier this year.  Read more...  

Subtle Ways Scammers Target Seniors

The value and use of the CFA designation is of utmost importance to CFA charterholders.  Within weeks of starting Level 1, you likely learned how the designation can and can’t be used.  Most advisors in the Private Wealth Management business also know there is an alphabet soup of designations that are used primariliy to market to certain groups of potential clients.  The following NPR interview with a deputy assistant director at the Consumer Financial Protection Bureau sheds some light on a recent report from its Office for Older Americans regarding "senior designation" titles.  Read more... and  Senior Designations for Fincancial Advisors                             

Learn Your ABCs Before Hiring a Financial Advisor

Speaking of alphabet soup, Morningstar's Adam Zoll compiles summary descriptions of some of the most common financial advisor designations, including the CFA charter.  He lists the requirements for attaining each designation and suggests situations where an advisor with the designation would be most helpful.  Whether we agree with Zoll's suggestions or not, his article gives some indication as to how the professional designations are perceived by personal finance readers (i.e., current and potential clients) as well as by the general public.  Read more...  

Bloomberg's Tom Keene Explains The Sheer Brutality Of Wall Street's Hardest Exam

Business Insider takes a lighthearted look at the experience of preparing for and taking the CFA examinations by getting Bloomberg Surveillance host -- and CFA charterholder -- Tom Keene's impressions of the ordeal.  Ah, the memories!  Read more...


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