As a CFA candidate, you may have heard occasional horror stories about some candidates being subjected to CFA Professional Conduct investigations due to a misconduct (perceived or actual).
To help alleviate your concerns, this article explains:
Let’s dive in!
CFA Institute upholds the Code of Ethics and Standards of Professional Conduct (Code and Standards), exam rules, regulations, and the CFA Institute Bylaws. This is done to protect the integrity of the CFA membership, designation, and examination.
The CFA Professional Conduct Program (PCP) administers a multi-level, peer review disciplinary process for CFA Institute, using the Bylaws and Rules of Procedure as guidance for:
Peer review means a group of professionals in a given field – in this case, CFA charterholders – are charged with reviewing or evaluating a colleague’s performance or work to ensure it meets the standards of the profession. The multi-level aspect provides a process of checks and balances to ensure fairness and consistency.
The PCP investigates both exam and industry-related conduct:
Broadly speaking, a PCP investigation happens in 3 steps:
As part of an investigation into a person’s conduct, PCP is authorized to contact any third party that it believes may be able to provide relevant information or assistance to an investigation.
During such information requests, it may be necessary to identify the person under investigation, or provide the third party with a copy of related reports, and/or identify the conduct under investigation.
This is worth bearing in mind, since a PCP investigation may involve revealing the identity or (potential) conduct of the person under investigation to other parties such as an employer.
All disciplinary proceedings are conducted by members of the Disciplinary Review Committee (DRC) in accordance with the Rules of Procedure. The DRC consists of volunteer CFA charterholders from around the world.
Here’s a simplified flowchart to summarize the process for both exam-related and industy-related proceedings:
The accused member or candidate may accept the recommended sanction or request a disciplinary hearing conducted by members of the DRC.
Here’s the list of possible CFA Institute PCP sanctions and what they mean:
| PCP CFA sanctions | Description |
|---|---|
| Private Reprimand | A written admonishment that includes only the conduct, excluding the person’s identifying information; it is not disclosed to third parties |
| Censure | A written admonishment that includes the conduct and may include the person’s identifying information; it is disclosed to third parties upon request. |
| Suspension of Membership | Termination of a person’s memberships, or opportunity for memberships, in CFA Institute and any member societies for a specified period. |
| Suspension of the Right to Use the CFA Designation | Termination of a person’s right to use the CFA designation for a specified period. |
| Revocation of Membership | Permanent or indefinite termination of a person’s memberships, or opportunity for memberships, in CFA Institute and any member societies. |
| Revocation of the Right to Use the CFA Designation | Permanent or indefinite termination of a person’s right to use the CFA designation |
| Summary Suspension | Automatic termination of a person’s memberships, or opportunity for memberships, in CFA Institute and member societies, as well as the right to use the CFA designation or participate in a CFA Institute Exam Program. |
| Suspension from Participation in CFA Institute Exam Program | Termination of a person’s participation in the CFA and/or CIPM exam programs for a specified period. |
| Prohibition from Participation in CFA Institute Exam Program | Permanent or indefinite termination of a person’s participation in the CFA and/or CIPM exam programs. |
Note that:
– A list of industry-related disciplinary sanctions issued since January 2000 are published on the CFA Institute website.
– Individuals who have received disciplinary sanctions of private reprimand or who have been sanctioned for exam-related conduct do not appear on the list.
– That said, sanctions for exam-related matters result in an automatic voiding of exam results.
Interestingly, industry-related disciplinary matters represents a relatively smller portion of the issues, with majority of CFA PCP investigations being exam-related issues.
Let’s take a look at some available statistics:
The above chart shows the industry-related PCP cases closed per year, and their resulting action (if any).
A few interesting observations across industry cases from 2013-2020:
Note that the data for exam-related PCP cases are not comparable with industry cases for a few reasons:
The top 5 causes for exam-related PCP sanctions are:
However, note that with the new CBT exam format from 2021, most of these issues (except #3: bringing unauthorized calculator) may no longer apply nor be an issue.
For example, for CBT exams:
– scratch paper/whiteboard/erasable writing tablet will be provided during the exam, which you have to return to the proctor when the exam is over.
– calculator cases and keystroke cards are allowed to be brought into the test room.Check out our CFA exam day checklist for the latest information.
Candidates typically get notified of a PCP investigation via email about 1 month after the exam.
It is totally normal to be freaking out, stressed and/or angry at such allegations, especially if they are not true. Allow yourself to feel those feelings for a while.
However, you need to accept that while this process can take a few months on average to complete, and there will be a delay to your CFA exam journey. It is a stressful and unpleasant position to be in, but do approach this matter calmly for your benefit.
Assuming you’re innocent, our advice is to:
The panelist are people too (volunteer CFA charterholders in fact), so hopefully they would understand what you’re going through, you have to take a shot at fighting your case if you’re innocent because no one else can.
One of our readers also wrote in about his personal experience of a PCP investigation with sage advice – check it out!
We have some old 2017 data from CFA Institute on this, which is no longer published now.
Nevertheless, the statistics below is a useful guide on how strict this procedure is, and more importantly, why it’s best to avoid being investigated in the first place.
Looking at the historical cases that have been opened in the past exam cycles, there’s only a tiny percentage of cases where the case resulted in no disciplinary action – less than 2%.
Cases that end with anything worse than a cautionary letter will result in having your exam invalidated.
Statistically speaking, if the CFA Institute has opened a case against you, you’ve got:
The best chance of staying safe is to never give CFA Institute a reason to open a case against you.
The potential career impact, stress and delay to your CFA exam journey just isn’t worth it.
To avoid industry-related PCP investigations, frankly you just need to abide by the Code and Standards, or any criminal activity really.
To minimize the risk of getting an exam-related PCP investigation, here are a few things we can learn from historical exam-related cases:
Have you personally been involved in a CFA professional conduct investigation? How was your experience like? Do share it with us in the comment below.
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