Following up with our first interview with the CFA Institute, I was lucky enough to get an exclusive interview with John Bowman, Managing Director and Co-Lead for Education in the CFA Institute.
John and I spoke for nearly an hour, covering various aspects including declining pass rates, the CFA Institute’s future plans for candidate resources (test banks!), and his personal advice to candidates.
Read on for Part 1 of John’s interview. Our thanks again to the CFA Institute team and John for this interview!
Managing Director & Co-Lead, Education, CFA Institute
John Bowman, CFA, is managing director and co-leader of education at CFA Institute. John oversees CFA Program, CIPM, and the Claritas® Investment Certificate, regulator and program recognition, university relations, scholarship programs, regional education initiatives, and special projects.
He recently led the development and launch of the Claritas Investment Certificate, and previously held the position of head of Innovation and Product Solutions for CFA Institute. While head of product solutions, John crafted and executed the vision for member engagement through multimedia products, social media, mobile delivery, and the My CFA portal.
Prior to joining CFA Institute, John was a portfolio manager at Mellon Growth Advisors (MGA). He was responsible for portfolio construction and stock selection for the MGA International Growth and MGA Global Growth strategies. John also served as a portfolio manager for the International Growth Opportunities Strategy at State Street Global Advisors (SSgA) in their Global Fundamental Strategies Group. Before moving into portfolio management at SSgA, John was an equity analyst serving the domestic and international strategies.
The CFA Institute has also been concerned with the trend over the last decade.
We’d like to see as many charterholders as possible (contrary to what some candidates may think!). When you’ve got a larger pool of ethically bound and competent investment professionals, ultimately clients and the industry are better taken care of. So this concerns us too.
So let me stress that pass rates are residual of a practice we call Standard Setting. We don’t actively manage pass rates – in fact there’s not a step in the process of determining the pass rate score that even allows for pass rate management.
What we do want to ensure is that we maintain a consistent standard of achievement. For example, I took the exam in 2000, and if you took the exam today, our paramount goal is that you and I would be held to the same standard, the same competency line to either pass or fail. Every charterholder you know should be at the same competency level when newly minted, even though that the actual passing score may slightly vary across individual examinations.
To get to your specific question, pass rates are influenced by many factors: changes in the industry, the curriculum, how prepared candidates are, the evolving demographics of candidates. It’s hard for us to isolate one of the many factors and say that is in fact the reason. Unfortunately it’s more likely some integration of all those factors.
That’s a good question – we get asked that a lot. When candidates ask me that, I often compare it to myself. I completed the CFA program in 2000. I’d say on one hand it’s easier, and on the other it’s harder.
On the harder aspect: yes, the industry continues to become more complex, it continues to globalise. So the curriculum, because by definition it has to represent the entire practice, it therefore has to follow the increasing complexity of the industry.
On the other hand, we think we’ve facilitated an easier studying process for candidates today. Our curriculum has become more readable, our LOS have become more clear, we’ve added additional supplemental tools like practice exams, mobile apps, test banks. We’ve created today a better candidate experience than I had when I went through the program. So I think there’s a number of factors that neutralise each other across the decade.
We’ve got many initiatives across a number of fronts.
On the charterholder front, one of the things we’re doing is continue to beef up our continuing education offering. We’ve updated our resources in blogging and publishing multimedia content that allows charterholders and the general public to keep up with the latest trends and views within the market. We’ve also added online learning modules that are a bit more formal for more structured learning. So that’s one: continuing education development. We’ve also accelerated and deepened our relationships and therefore the Charter’s recognition with regulators, universities and employers.
Our Future of Finance initiative is a big one: that’s ensuring we’re sending the message that CFA Institute wants to be at the forefront and feels obligated to play a very proactive role in ensuring a sustainable and ethical financial services industry for the ultimate benefit of society.
On the candidates side, we’re relentlessly focusing on candidate experience. I spoke a moment ago about a few: the mobile app and the move to a test bank that will significantly expand the practice exams available to candidates. We’re also releasing an online study planner that will be a resource that helps you plan the time and level of detail you need to spend on each topic depending on your life situations and the time you register. We’re reengineering the registration process to be much more user friendly.
So we’re very active on a number of fronts to ensure the CFA charter maintains its gold standard around the world.
Let’s start with the mobile app. The mobile app will be released in the spring of 2014, so that will be beneficial to the December 2014 and June 2015 candidates. What the mobile app will allow you to do is read the curriculum, access the online study planner and conduct your practice exam questions from both Apple and Android devices. So there is a possibility that June 2014 candidates can take advantage of the practice exams featurebut most likely it’s going to be for candidates in the next cycle.
On the test bank, we will be moving this November from a static mock exam and a few practice exams which are topic-based to a test bank that allows dynamic generation of multiple mock exams and multiple topical practice exams. The mock exam will approximate the actual examination in length, difficulty and topics weighting. The topic-based exams will allow you to really focus on a particular area you need to improve your competency. So you’ll be able to dynamically generate smaller tactical exams that focus on just one topic.
The online planner as I mentioned allows you to plan your exam study approach depending on your situation and your time of registration.
Perhaps most excitingly, all these will be included with candidate registration rather than as additional fees – it’s a huge advancement!
Firstly, the CFA program is a pure meritocracy. You’re going to perform according to how much time and commitment you put into this, and that’s a really important point. Without getting into specifics, sometimes degree programs and other qualifications are not nearly as rigorous as the CFA program, so you often have very academically pedigreed, very confident individuals that sign up.
But you can’t just depend on your prior knowledge, or even your job experience to get you through the CFA program. It really takes a careful and deliberate study and practice regimen to get through it. So you have to put through the preparation, you have to master the material, because the exam is written directly from the CFA program material.
The other thing I’d say, more on a “CFA mission” level, that I hope that any aspiring CFA charterholder or investment professional understands that a qualification like the CFA program is the beginning of a career commitment, not the end. When you enter the CFA program, I would prefer that an individual not uniformly consider this a journey of 3 exams that they hope to pass purely for career development or monetary gain. I understand that that’s a natural part, but ultimately the CFA program is about being a professional.
That means being bound by a code of ethics, signing on to a higher purpose of ensuring our industry is a fundamental building block of society, treating clients well and ensuring their interests are paramount. Also, in many cases, reversing what has been a two-decade trend of this industry, sadly, pursuing its own interests instead of its underlying clients.
This is the messaging that we’re giving to a lot of our future initiatives, and I think it’s important that the new generation, who really has the opportunity to shape the future of finance, to hear this message loud and clear.