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APAC is the fastest-growing area in terms of CFA candidates. It accounts for 55 per cent of global candidates dominated by India and China. On his recent visit to India, Nick Pollard, managing director for Asia Pacific at CFA Institute, talked at length with Business Today about the CFA course and the new educational programs introduced to keep pace with changing needs .
BT: How many CFAs do we have currently?
Nick Pollard: There are 1,90,000, CFA charterholders, around the world and to become a charterholder, you need to pass all three levels of the exam, and also have 4,000 hours of experience in a relevant role in the world of finance. Now, in APAC, there are 44,000 charterholders. But Asia-Pacific (APAC) is the fastest-growing part of our world. If we split the world into three regions – APAC, Europe, Middle East, and Africa (EMEA) and America, probably about 55 per cent of global candidates are in APAC, dominated by China and India.
To pass the examinations and go through the program, we have a strong process and requirements. And it requires consistency, discipline, and passion for the subjects. If you have these three things, then difficulty and easy become relative.
BT: How many CFAs are from India? How much is the pass rate?
Nick Pollard: In India currently, we have 3,500 charterholders. But we are one of the largest candidate markets for the CFA program, globally. So, today, the number of candidates in India is more than in the United States. We have a much larger young candidate pool that joins the program and goes through it. The pass rates in India are not very different from global pass rates, they more or less are around the same. I can say with confidence that Indian students are doing as well as their global peers when it comes to going through the qualification. They take a little more time than their global peers to acquire relevant work experience for a number of reasons. Firstly, because our candidate pool is younger, so they start earlier and are still studying when they pass level two or level three. So, it takes them a little longer to enter the industry to acquire the 4,000 hours of relevant work experience to being charterholders.
BT: How do you look at the number of 3,500 CFAs in India?
Nick Pollard: From a wealth perspective, and from the country’s economic perspective, we think that the number of charterholders are very few compared to the size of the industry and the population of the country. So, there is obviously a need for more professionals who have gone through a proper professional qualification like the CFA Program to have the credentials.
And I believe from a 2021 report that there is only one RIA for 75,000 people in India, which is a very small number of investment advisors. This basically means that a large population of investors in this country is investing without proper professional advice.
BT: Can you share details about your certification program including other courses like ESG?
Nick Pollard: Our key product, since our inception has been the CFA Program. But in the conversations, we’ve been having with the industry, there’s been interest in using our experience, and our brand to discuss and provide education on other parts of the financial services sector. Now, we’ve always had a couple of other products, one is the CIPM, which is the Certificate of Investment Performance Management.
But in terms of education programs, the one that’s been most impactful in the last couple of years has been the ESG certificate in investing. That was a new educational program, launched in November 2021. There are over 25,000, registrations now of that certificate around the world. And India is in the top seven countries for registration. The ESG certificate takes about 60 to 100 hours of learning. It goes through the fundamentals of ESG from a global perspective, rather than a local perspective.
In terms of further education, we have a growing portfolio of professional learning products, covering things like performance assessment, decentralized finance, data science, machine learning, big tech, and blockchain. Those are much shorter interventions, 10 hours or so. And they are courses as opposed to certificates. But it’s a sign of our commitment to the continuous education of investment management.
BT: Which are the most popular courses that you provide?
Nick Pollard: Most popular is the ESG certificate. Outside of the CFA Program, the CFA Program dwarfs all the others, but the ESG certificate is the most popular of all those and of those registrations that I mentioned. I think something like 50% of those has happened in the last four or five months. So, it shows the growing momentum there is an appetite for that kind of education.
We will also be launching another certificate in the next month, which is basically focused on providing foundational level knowledge of the investment management industry, to anybody and anyone who wants to know about it. It could be young students who are thinking or aspiring for a career but still haven’t made a final decision so they can test the waters.
BT: What does it cost to do the CFA Course? If you could give us an overview of the fee structure?
Nick Pollard: For the CFA program – when you start the program, you pay a one-time enrollment fee of $350. And then, on average, it costs $1,000 to take an exam. So, there are three levels of examination. That’s $3,000 if you pass in the first instance, otherwise, of course, there’s the additional cost each time you repeat the examination. So overall, it’s a cost of $3,350. spread over two to two and a half years because that is the general time period that you need to pass all three levels of examination.
For the CFA Program, we offer a number of scholarships either via the universities that we are affiliated with, or a generic access scholarship for those who find it difficult to be able to afford the fees. So, we try to make it as accessible and affordable as possible to the community. In addition to the scholarships, we recently introduced a flexible payment option in India. So, if some students find it difficult or candidates find it difficult to pay at one go, they can avail of an equated monthly installment on their fees through our partner vendor.
The ESG certificate costs about $1,000 with taxes in India, and the other courses, which are short-term in duration generally cost between $350 to $400.
BT: Is the CFA India course recognised globally?
Nick Pollard: The CFA program is a professional qualification. And globally, as we mentioned, we have 1,90,000 members. And in most markets, it is viewed as a gold standard qualification for the investment management industry and is very strongly recognized by employers. And I would say it’s the same with the other programs that we had, considering that they come from the CFA Institute stable. Our employers value programs that come from us and believe that they have a sufficient record of thoroughness and relevance for the industry. In terms of the challenge, we had many years ago, that’s behind us in India. And that challenge has been closed because it occurred because of a partnership we had with an organization. But that was behind us long ago.
BT: Are all these courses SEBI registered?
Nick Pollard: SEBI has guidelines on who can act as a certain person in the industry, like who can be a portfolio manager, who can be an alternative investment professional, who can be a research analyst, and what they have is eligibility criteria in terms of work experience or education. And then in some instances, like RIA, you have to take examinations, in addition to those educational qualifications. In the case of CFA, the CFA program is one of the eligible education qualifications for all roles of alternative investments, portfolio management, as well as investment advisory. It still has to be included and incorporated for research analysts. But in all three other areas, it’s an educational qualification that makes you eligible for those roles. As for an RIA, you still have to take the exams.
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