#TBT "The Credibility of Advanced Education"

In the financial services industry, you will come across a variety of letters behind people's names. To explain one set of these letters, which both Nancy and Ryder have behind their names, is an article Nancy wrote in the Mississippi Business Journal when she found out she passed the third and final Chartered Financial Analyst (or, CFA) exam. Enjoy this week's Throwback!

I'm a one person operation. That means I make investment recommendations, develop financial plans, file and post, pick up mail, and even take out the trash.

It had been a busy morning. I made my usual stop at the post office on the way in, but the stack of mail sat on my desk untouched until lunch time. I finally decided to sort through it when I came upon THE ENVELOPE -- that one piece of mail that made my heart start pounding and my hands start shaking. I stared at it as if it were Pandora's box. Curiosity urged me to rip open the package, while fear paralyzed me.

Curiosity won out, and as I pulled out the contents I saw the word, "Congratulations." I screamed! I passed the final Level III of the Chartered Financial Analyst Program. I had my designation of CFA!

Individual investors and institutional investors alike look for ways to sort through the host of financial services people. Some are insurance salesmen, some are commission brokers, some are financial planners, some are portfolio managers, and on and on. And everybody seems to have their own set of letters to make them look official. As I stopped everyone I met to announce my new designation, each smiled, shook my hand, and then said, "So what's this CFA thing?"

The first CFA charters were awarded in 1964. In 1990, two groups, the Financial Analysts Federation (FAF) and the Institute of Chartered Financial Analysts (ICFA), joined to form the Association of Investment Management and Research (AIMR), which took over the task of managing the CFA program, among other things.

The AIMR has become famous lately for its development of a set of performance presentation standards. Every investment company in the country has been busting its chops to adhere to these standards in the reporting of rates of return. Next time you see a listing of how some mutual fund has performed over the last few years, look for the notation citing compliance with AIMR standards.

But what the AIMR is really all about is educating its membership and insisting on adherence to high ethical standards. We know there are financial people who sell cars one week and put out their shingle the next. We know the stories of your Aunt Mildred who lost all her money because she trusted someone who made poor investment choices out of ignorance. And still we ask you to trust us.

The CFA program is a three level set of tests, offered only once a year. You must pass each level before going to the next. It is a self study program that covers areas like accounting, quantitative analysis, economics, fixed income and equity analysis, and portfolio management. And I can tell you from a personal experience, it's not easy.

Before 1980, Mississippi didn't even have a local chapter. At that time, Bill Whitney, with Prudential Securities, and about four other people decided to start a group in Jackson which began as an affiliated society of the Memphis group. It wasn't until 1993 that the Mississippi group became large enough to attain "society" status.

We now have 42 members. Of that number, 22 have their CFA designations. And among the membership, I see bank trust officers, finance professors, commission brokers, independent portfolio managers, and others. Our common bond is a commitment to those AIMR standards of education and ethics.

One of the driving forces behind our society has been Dr. Walter Neely, J. Army Brown Chair of Business Administration for Millsaps College. He is a long-time holder of the CFA designation and actually administers the test each year. He also travels to Virginia where he assists in the grading of the test.

The pass rates for the first two levels have typically hovered around 50% or less. Usually, Level III rates jump to the high 70s or low 80s range. This year, the pass rate for Level III was 64%. There were five people in the Mississippi Society who took the test, and all five passed and received their charters.

Arty Finkelberg, vice president of investing for A.G. Edwards, was in that group and estimates that he spent over 1,000 hours of his time reaching this goal.

When asked why he undertook this program, he responded, "I view my profession as a wonderful, ever-changing and challenging craft which I find intellectually stimulating as I attempt to help each of (my clients) achieve their investment goals." Artie also has his CFP designation (Certified Financial Planner).

Another is Bill Geary, first vice president with Morgan Keegan. Why did Bill subject himself to this torture? "I endured the CFA program because it is recognized as the most comprehensive education available in our industry. There is no question the CFA has been a foundation for me to provide better money management for my clients."

And what about me? Did I have all thse noble reasons for enrolling in the program? PLEASE! I am, first and foremost, practical. There are 42 members in the Mississippi Society, and 6 are women. The financial services industry is mostly male, and much of the population thinks it should stay that way. After all, everybody knows women don't have a head for figures! I began this program because I needed credibility. I needed a designation that had teeth. But what I gained was an education that will carry me throughout my career.

--Mississippi Business Journal, October 21, 1996

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