August 2013

CFALA e-Newsletter: August 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

*Please note that the content of this e-newsletter should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of  CFA Society Los Angeles.

In this issue ...


Despite Drop in Candidates, CFA Institute Anticipates Long-Term Growth 

After years of spectacular growth, has enrollment in the CFA program started to wane? In 2012, CFA Institute announced a record 149,954 candidates from 169 countries were registered for the June exam at all three levels. The June 2012 number was a 3 percent increase over the 2011 June registrations. However, CFA Institute announced the 2013 June registration for all three exams dropped to 146,605 candidates from 168 countries. For the entire exam cycle which included the December Level I exam, registrations dropped from 219,000 in 2012 to a little more than 210,000 in 2013. Certainly coming off a record year and several years of excellent growth is no reason to bemoan a very slight pullback. But does the flattening of registrations indicate any change in viewpoints about either the industry or the charter?

When asked about the lower registration numbers and whether CFAI sees any trends or has any insights, John Bowman, CFA, managing director and co-lead of Education, CFA Institute said, “We saw a minor decline in 2013 due to a slowdown in developed markets. Although we expect this challenging candidate environment to continue in the near term due to what we believe is a lag effect from an unprecedented market downturn and industry labor contraction, we anticipate the program will continue growing in the long term.”

Actual candidate that sat for the exams (due to the no-show rate of approximately 20%) in June 2013 decreased for Levels I and II, and increased for Level III. Level I takers dropped to 47,502 in 2013 from 49,445 in 2012, Level II dropped to 44,874 from 45,247 the year before and Level III increased to 25,766 in 2013 from 24,754 in 2012. Because of the impressive growth of the program in the recent pass, it makes sense that as candidates make their way through the program the later levels will continue to have high numbers. Also as a result, the membership of CFALA continues to grow, notwithstanding the lower overall number of candidates taking the exam. Laura Carney, Executive Director of CFALA said, “Our membership remains steady. Because of increased efforts on behalf of CFALA highlighting membership value and CFA Institute in reminding members to renew, our membership retention numbers are up 8% from last year at this time.”

Has public perception of the finance industry discouraged college grads or young professionals from the finance industry? CFAI has addressed this possible explanation of the lower attendance with the Future of Finance project. “The global financial industry can be an extraordinary force for good, but there is much work to be done to shape the industry for future generations,” said John Kay, chair of the Future of Finance Advisory Council. “This project is designed to engage professionals and investors in and outside of finance to help solve problems with the global financial system.”

No matter what the various reasons may be contributing to the registration slowdown, one of the most important ways to maintain the value and relevance of the CFA charter is by supporting the local member society that works with both candidates and members close to home. One of the goals of CFALA is to promote the CFA designation through public awareness, outreach, and educational programs. These goals will be important as the candidate pool growth slows to steadier state. Membership involvement would likely go a long way to achieving these goals. 

CFALA Luncheon Discusses Claritas Certificate Program

On July 15, CFA Society of Los Angeles hosted a special luncheon which included a presentation by John Rogers, CFA, CEO of CFA Institute. The luncheon provided an opportunity to meet John Rogers and a hear his thoughts on the industry and opportunities within it. The event piqued the interest of investment professionals in different stages of their careers. Among the attendees were seasoned investment professionals, candidates in the CFA program and potential Claritas® candidates.


Addressing an audience well aware of the key role that the CFA Institute plays in creating educated and ethical investment professionals through higher level certifications, John Rogers reiterated the importance of broadening the Institute’s education focus to include everyone who works in the finance and investment business, not just the investment decision makers. It has been estimated that for every investment decision maker there are up to ten other professionals working in support. Consequently, the importance of investing in a knowledgeable staff cannot be overstated. With the clear goal to build a more informed industry, John Rogers briefly introduced CFA Institute's new education program, the Claritas® Investment Certificate, setting the stage for a detailed presentation by John Bowman.

John Bowman, CFA, Managing Director and Co-Lead, Education at CFA Institute, presented an overview of the Claritas® program, its target audience, and benefits to the industry as a whole. Launched by CFA Institute at the 66th Annual Conference in Singapore, Claritas® is a comprehensive global program designed to give all professional disciplines in financial services outside of investment roles a clear understanding of the investment industry and their professional responsibilities within it. Although the Investment Certificate is designed as a self-study program, Bowman noted that classes will be offered in the form of a ‘live’ review program by CFALA and as “in house” to companies who wish to provide the program to their employees in the convenience of their offices. Descriptive in nature, compared to the CFA curriculum which is analytical, successful Claritas® candidates are awarded a certificate of knowledge, whereas successful CFA candidates are awarded the CFA charter.


Coordinators for the CFALA Claritas® effort, Dave Cary, PhD, CFA, who has been teaching CFA review classes for over fifteen years, and Nathan Palmer, CFA, Vice President and Portfolio Manager at Wilshire Associates whose firm participated in the Claritas® Pilot program, both shared their views about the value of the program. Cary gave an overview of the program topics while Palmer reported on the positive feedback he received from the target audience at his firm who expressed strong interest and enthusiasm within a few hours of his communication with them about the program. CFALA’s live Claritas review program will begin September 24th at USC.


The Claritas certificate aims to address two challenges facing the financial services industry as identified by CFA Institute: 1) an inconsistent level of knowledge; and 2) a crisis of trust. The Claritas® program is designed to empower individuals across all functions in the financial services with a broad yet relevant knowledge emphasizing ethics and investment professionalism, thus benefiting clients, firms, employees, and the investment industry as a whole.


Using Twitter for Idea Sourcing – from a Social Media Novice


Many members of CFA LA – particularly the older ones (like me) grew our professional skills in a different professional world (i.e., pre - internet). One consequence is that the tools of the new world for us are not as intuitively automatic for us as they are to our younger colleagues. In navigating the vast content, it is becoming more important to find ways to be selective in identifying where to spend your time.

I describe the ability to formulate processes and resources to screen and prioritize information content worth pursuing as being a good curator. The intent is to concisely describe finding ways to more efficiently screen the boatloads of information that barrage us every day and narrow the number to a manageable batch of information that is indeed relevant to my unique interests.

For those of you who know me, I can hear you chuckling at the thought of me giving anyone advice regarding anything social networking related. I am indeed a novice in this regard, but you may find the following idea of value in identifying ideas and resources efficiently.

While I am not an active “tweeter”, I do have a Twitter account. Because tweets are limited to 140 characters, the content is forced to be concise. Additionally, in setting up a Twitter account, one of the first steps is to set up a listing of who you wish to “follow” which is the definition of electing to be on the distribution list for tweets that they send. There are undoubtedly a number of individuals and firms that produce information content that may be of specific interest to you. When you open your Twitter account, under the heading of # Discover, you can search those resources that you typically tap to see if specific individuals or firms maintain an account. Then, by clicking the “follow” button on their listing, you will be placed on the list to receive their tweets.

My use of this system is (usually early in the morning) to sign on to my twitter account and review recent tweets. The value is that there are a number of short descriptions of information or articles of interest that usually include website links to the resource. It becomes a “menu” of potential news articles, academic research, video material, or other web based content that, by definition, can be quickly screened – and by clicking on the imbedded hyperlink, reviewed for relative value easily.

As an example, I have an interest in behavioral finance and therefore “follow” Lauren Foster and Jason Voss of the CFA Institute who are active producers of a wide range of information in that category. They also maintain blogs that their twitter accounts link to with more robust descriptions of information. I’m sure that these same protocols are used by others who maintain an active presence on Twitter.

Also, I note that the Applied Behavioral Finance Group actively shares emails with content of potential interest. For those of you who are active in a CFA LA Community of interest, I encourage you to actively share such information with your community members to enhance the collective information sharing among the group.

I encourage those of you who have much more experience than I do in this category to submit additional ideas – or even augment the method described above for a future newsletter article (to help us old guys).

Mark Harbour, CFA – Vice President, CFALA

CFA Institute Releases Edelman Investor Survey

A recent CFA Institute/Edelman study on trust in the investment management industry reveals valuable insights. Only 53% of investors trust investment management firms to do what is right. This has broad implications for our industry and highlights the need for each of us to try to improve this fragile statistic. Please read the results of the study via the link below and feel free to share comments with the CFALA Advocacy Committee.  Read more... 


Yelp for Advisors?


InvestmentNews' Liz Skinner profiles a "'personal-finance social network' where consumers can read and write reviews of financial companies, products and professionals." Skinner duly questions the utility of such a service. The results of a simple Google search on the article's title seem to indicate that when it comes time to write a review of their advisor, many investment clients are already turning to . . . Yelp.   Read more...  


Why Los Angeles Investment Bankers Need Social Media

Citing the potential sale of Tribune Co.'s newspaper publishing unit, MidMarket Portal's John Grimley makes some interesting points about why Los Angeles investment bankers should be leveraging social media vs. relying exclusively on more traditional media and methods. As the name of his firm implies, Grimley is in the business of "advising professional services providers on . . . social media strategy and implementation." Check out his site's cover photo.  Read more...  

L.A. Story

The American Prospect first published this article on the Los Angeles Alliance for a New Economy on 8/6 and it is still being enthusiastically shared 10+ days later -- equivalent to at least a couple of months of fame in social media terms. Given the substantial activity of this local advocacy group, your CFALA newsletter editors believed that you should be aware of the organization and their work in our area. The story illustrates how, for better or worse, an economic agenda that might otherwise founder at the national or state level can still win acceptance, even within the business community, at the local/metro level.  Read more...  

CFA Institute Publications in E-Book Format

Just a reminder that many CFA Institute publications are available for free in .pdf, .epub, and .mobi format. Some can even be purchased from for less than $1 for seamless downloading to your Kindle, Kindle app, or Kindle for PC.

Here is a link to the download page for the Research Foundation's Life-Cycle Investing: Financial Education and Consumer Protection, which examines how financial education impacts financial literacy and ultimately financial behavior.  Read more...  

The Intelligent Investor: Saving Investors From Themselves

Here at the CFALA e-newsletter we've sensed no small amount of interest in financial writing within the member community -- ourselves included. Just after the publication of our last issue, The Wall Street Journal's Jason Zweig offered his thoughts on what it takes to write about personal finance and investing in a meaningful way. Favorite quote: "It’s hard for your head to swell when you spend so much of your time ducking."  Read more...























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