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| The 2014 grader in Virginia |
Simply because I was no longer involved, CFA did not pine and go into terminal decline, they moved on... and I think if pressed CFA may say "Who?" when asked if they missed me.
But some things are the same. First of all being the exam date of the first Saturday in June. This is totally directed by the academics who originally came up with the notion of the CFA -- their school year ends at the end of May so it makes supreme sense to keep things rolling with a new project picking up when their full time day job finished for the year.
It couldn't have been practitioners as 30th June after the year end is the most important reporting season -- half year results, quarter end reviews and strategy outlooks, client meetings. The list is endless. No practitioner would dream of doing the exam then -- a month earlier or later, maybe. That's also why practitioners are few and far between when it comes to the 2-week cycle known as senior grading. They just cannot get away... I described this to people who asked as 'life getting in the way'. Business, family commitments, you name it. All those things take precedence and so it is that practitioners take more of a back seat in the CFA process.
This can be seen from the movers and shakers in the organization too. Most come from an academic background or from one that has seen them cease being practitioners for some reason or other. The result is organizationally the process runs frighteningly smoothly ... far better than it would were it left to practitioners who'd miss out much of the monumental detail required!
Taking a step back, when I acquired my CFA in 1989, practitioners in London and New York would smile and say "very nice" when talking about the qualification. Nobody I met in London when I worked at investment banks had a CFA, most hadn't a clue what it was until I explained. Those I spoke with in New York were polite but that was about it. Neither needed CFA until the dot com crash of 2000 when for almost the first time regulation kicked in.
I'd moved to Bermuda from London in 1988 to be the banking supervisor (the only one), head of the Bermuda stock exchange and a host of other impressively titled roles that in reality paid not much more than lip service to what they suggested. I took CFA because my colleague (later business partner) introduced me to it and I had lots of time free to take another technical qualification -- my White Sail levels 1 and 2 didn't quite cut it on the CV! It was tough and worth it, I thought.
So I started grading in the early 1990's (I don't exactly remember which year) as CFA wanted to internationalize (and Bermuda was one of the few places to pick up on it) and I was interested. In my first year I was earmarked to grade a question on deferred tax the recommended answer for which was simply totally wrong. I was a tax guy at the time and on my team was another similar tax guy who re-wrote the answer. For my sins I was asked to lead the Curriculum for this section of the qualification which I did for a couple of years before finding it and the whole grading process too intrusive in my new business life as a practitioner... hence my 17 or 18 year gap.
In the meantime regulation had picked up. I'd been involved in introducing Basle I to Bermuda in 1988 (we're now up to at least Basle III for banks) which was a quantum step up in regulation from pretty much laissez faire to at least forcing banks to say exactly what they were doing. Some of it wasn't pretty. But that didn't happen to the investment industry until the next catastrophe ... which came in 2000 with the dot com crash.
People remember that the dot com crash was terrible for markets but forget that it was actually only a market correction. The underlying economy wasn't touched at all. In fact it did just fine and with Fed Chairman Greenspan cutting interest rates to 1% soon thereafter it became even better than fine.
Add fine to even better and you get the heady cocktail that led to the asset bubbles before the much, much worse crash of 2007-8 that sparked the Great Recession.
And all the while the investment regulators were looking around for an organization to be a leader in investment industry self regulation and CFA was able to hold up its hand and say 'look at us, we've been doing this for years'. Talk about right place, right time.
So now industry regulations talk about 'fit and proper persons' with CFA specifically in mind. No longer does London and New York smile patronizingly at CFA, CFA are the people that protect them and deal at a high level with regulators on behalf of the industry as a whole. No practitioner wants to do that so is quite happy to let CFA do it for them.
And with that delegation went an awful lot of responsibility and positioning. CFA now speaks for the industry.
If you look globally you can see a slightly different theme.
Other countries were seen as far behind the London/New York axis and saw CFA as the way to elevate their qualifications and move their own countries into the limelight. CFA is the path to success outside London and New York. It is not something you just have to tick off like a university degree in business and potentially a MBA, it is an end in itself. So practitioners in other countries embrace CFA thoroughly and completely, in a way that practitioners still really do not in London/New York.
You can see it in the composition of the graders; North American graders are mainly educators or retired practitioners, other countries' graders are mainly practitioners. There's lots of them too -- more than 50% of candidates are outside North America with the number of graders being pretty much equally represented these days.
In my first year, I was one of only 2 non-North American graders.
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| The 1993 grader in Virginia ... incidentally the Rotunda at the University of Virginia is currently going through another series of renovations, this time in 2014 |
Also the hospitality suites only open from 6 pm to 10 pm, in my days...
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