The Chartered Financial Analyst (CFA) programme is still going strong after 40 years. Each year, about 100,000 candidates from more than 150 countries enrol for one of the three levels of the CFA examination. In Hong Kong, 8,000 candidates took their CFA exams last year. Meanwhile, the Certified Financial Planner (CFP) qualification, established in 1985, has attracted significant attention due to increasing needs from the global community for a consistent and high standard of financial planning. Most CFP participants are from the insurance, banking, securities, and personal financial planning industries and the qualification also appeals to auditors, tax accountants and legal practitioners. 'Hong Kong has one of the highest pass rates for CFAs in the region but their employability is in question. They need another set of skills to back them up,' says Louis Cheng Tsz-wan, associate professor at the school of accounting and finance at Hong Kong Polytechnic University. 'Historically, we have a number of CFAs who worked in mutual fund companies. As the mutual fund markets have shrunk, certain portfolio managers have lost their jobs.' Some global mutual fund management companies have re-assigned a few key places as their investment centres leaving Hong Kong as a sales office. In contrast to this is the booming wealth management market in China. To meet the growing trend, portfolio managers need to acquire the skills and knowledge for this booming area. A one-stop shop strategy adopted by most financial institutions has meant financial planners must possess a diverse knowledge of investments, including tax planning, insurance, retirement plans and employee benefits, and advanced financial planning. But the CFA focuses on investment skills including portfolio management, asset valuation, financial statement analysis, quantitative analysis, and economics. 'CFA is deep but not broad while CFP is broad yet not deep. The qualifications complement each other,' says Dr Cheng. The CFA stresses technical knowledge while the CFP focuses on interpersonal skills. 'The CFA deals with numbers and the CFP deals with clients. CFP needs to deal with the emotional state of the clients, build long-term relationships with them and gain their trust.' Unlike the CFA which is achieved through a self-study, distance-learning programme and public examinations, the Certified Financial Planner Board of Standards (USA) licenses their education programme to local professional bodies all over the world. 'These institutes provide diplomas to those who complete the programme. Some candidates might not pass the certification examination but they would have gained a good grasp of financial planning during their studies,' she says. There are certain degrees and professional credentials which allow the holders to take the CFP exams without going through the programme.
