Margaret Franklin

CFA Institute, the global association of investment professionals, and CFA Society Australia, today launched the Australia edition of its voluntary Diversity, Equity, and Inclusion Code for the Investment Profession (DEI Code).

The voluntary DEI Code is available to investment organisations in Australia of any size that seek to accelerate change by fostering a commitment to DEI.

The Australia DEI Code follows the successful introduction of a DEI Code in the United States and Canada in February 2022, the UK edition in October 2023, and the DEI Code Europe was launched in the Netherlands in June 2024. Since the February 2022 launch, the DEI Code has been adopted by more than 200 investment organisations, representing nearly 30 per cent of global assets under management. CFA Institute worked with CFA Society Australia and a DEI Code (Australia) working group of local investment and DEI professionals from organisations including HESTA, VFMC, Future Fund, Future IM/Pact, and The University of Sydney, to adapt the Code for DEI challenges and opportunities specific to Australia.

“Qualitative and quantitative research has proven that diverse perspectives lead to better outcomes on behalf of investors and create better work environments for employees. To make concrete progress on DEI, organisations that seek to do so need to integrate principles of equity and inclusion throughout the business in terms of behaviours, policies, and operations,” said Margaret Franklin, CFA, President and CEO, CFA Institute. “I’m especially thankful for the collaborative support for the Australia edition of the DEI Code, and I am excited that industry leaders are seeing DEI as a business priority and the right thing to do to support their organisations’ purpose and values.”

Signatory firms voluntarily commit to six metrics-based principles with the goal of creating better working environments and a cycle of positive change for future generations. The six principles to which signatories voluntarily commit are:

• Pipeline: Expanding the diverse talent pipeline.
• Talent Acquisition: Designing, implementing, and maintaining inclusive and equitable hiring and onboarding practices.
• Promotion and Retention: Designing, implementing, and maintaining inclusive and equitable promotion and retention practices to reduce barriers to progress.
• Leadership: Using our position and voice to promote DEI and improve DEI outcomes in the investment industry. We will hold ourselves responsible for our firm’s progress.
• Influence: Using our role, position, and voice to promote and increase measurable DEI results in the investment industry.
• Measurement: Measuring and reporting on our progress in driving better DEI results within our firm. We will provide regular reporting on our firm’s DEI metrics to our senior management, our board, and CFA Institute.
  

Sarah Maynard, ASIP, Global Senior Head, Diversity, Equity, & Inclusion, CFA Institute, commented: “The DEI Code is designed to help organisations address complex behavioural issues encountered in creating inclusive workplaces in the investment industry. The working group was very intentional about adapting the Australia edition to resonate better with local sensibilities, and provide Australian employers with a supportive action-focused framework to build impactful and measurable DEI strategies. By committing to the DEI Code, signatories in Australia take an important leadership role in further driving and accelerating critical and lasting change.”

CFA Society Australia CEO Lisa Carroll commented: “With the launch of the Australia DEI Code, what is clear is that the market is taking actionable steps to tackle a challenge that is highly complex, while avoiding diversity-washing. Together with CFA Institute, we look forward to working with DEI Code signatories in Australia to build and develop more inclusive cultures across the investment sector. This will help close the gap between employers that want to act on DEI and those that actually do.”

Signatory organisations voluntarily commit to meet the following foundational reporting requirements within two years of becoming a DEI Code signatory:

• An established senior leader ownership and oversight governance process.
• Formal, written, publicly available communications outlining the organisation’s DEI strategy, policy, commitments, and high-level objectives.
• An implementation plan to integrate DEI within the signatory organisation’s people, processes, and policies.

Read the Diversity, Equity, and Inclusion Code for the Investment Profession (Australia)

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Notes:
[1]  DEI Code in the United States and Canada
[2] UK edition
[3] DEI Code Europe was launched in the Netherlands

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Margaret Franklin

CFA Institute, the Global Sustainable Investment Alliance (GSIA), and Principles for Responsible Investment (PRI) have issued a new guidance that aims to bring greater understanding and consistency to terms used in responsible investing which will potentially reduce greenwashing by asset managers.The Definitions for Responsible Investment Approaches^[1] guidance is intended for investors, regulators, policymakers, and other market participants. For each of the terms below, CFA Institute, GSIA, and PRI have outlined a definition, detailed explanation, and a list of definitions that have served as the primary inputs for using the terms in practice.

• screening
• ESG integration
• thematic investing
• stewardship
• impact investing.

The collaboration between the three organisations was inspired by calls from regulators for voluntary standard setters to develop common terms and definitions to ensure consistency in the global wealth management industry. The guidance clarifies existing terms and definitions but does not create new terms. It also recognises important shifts that have taken place in responsible investment, with strategies now being applied to a wide range of investment styles and asset classes in both public and private markets. Prior versions of the definitions were, in some cases, limited to investments in listed companies.

Margaret Franklin, President and CEO at CFA Institute, said: “Technical terminology is an important part of responsible investment.  New terms are always emerging alongside new ideas, and definitions evolve over time.  It is important to standardise terms and definitions as practices mature so that professionals can communicate efficiently and effectively with each other as well as with clients, regulators, and other market participants. We believe this guidance will serve as a valuable resource for CFA charterholders, members, and candidates.”

Lisa Carroll, CEO of CFA Societies Australia, said:  “We welcome and encourage the Australian investment industry to adopt the definitions in this guidance to create greater consistency and understanding by all parties, including investors.

“Promoting the consistent and precise use of terminology in responsible investment will help to reduce greenwashing and introduce greater consistency among asset managers in developing and marketing responsible investment products. The guidance counters confusion about what different responsible investment strategies seek to achieve by clearly differentiating the objectives of approaches, such as ESG integration and impact investing,” Carroll said.  

“These definitions will create a consistent foundation for the continued professionalisation of responsible investment.”

David Atkin, CEO at PRI, said: “Responsible investment has grown significantly, and so have the expectations for clear and transparent communication. Investors need language that enables them to communicate their responsible investment practices accurately, succinctly, and consistently. By unifying around common definitions, we support our signatories and members to communicate with confidence.”

Simon O’Connor, Former Chair of the GSIA, said: “For many years, our organisations have been working to define and clarify the language of responsible investment.  This foundation of experience and expertise enabled us to come together with a common purpose to clarify and harmonise these definitions on a global scale. We now encourage the investment industry and regulators to adopt these definitions to create greater consistency.”

The guidance is available to read on each of the respective organisation’s websites:

CFA Institute, GSIA and PRI.

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Margaret Franklin

CFA Institute, the global association of investment professionals, has launched the Handbook of Artificial Intelligence and Big Data Applications in Investments, (“AI Handbook”), published by the CFA Institute Research Foundation. The Handbook reveals how asset managers are using AI and big data technologies to augment the investment process in pursuit of enhanced investment and business outcomes.

Through contributions from data scientists and investment leaders at firms including AllianceBernstein, APG, Goldman Sachs, Man Group, Neuberger Berman, NVIDIA, Ping An, Robeco, and Virtu Financial, the CFA Institute Research Foundation AI Handbook offers an inside view of the investment industry’s adoption of data science to generate investment insights, build more resilient portfolios, make better trading decisions, streamline client service, develop client-centric products, and gather business intelligence.

Margaret Franklin, CFA, President and CEO, CFA Institute commented: “At CFA Institute we view the combination of artificial intelligence and human intelligence as the winning formula for successful financial institutions in the future. As AI and big data applications become increasingly integrated into the investment process, industry professionals need to be well equipped to evaluate and incorporate these practices effectively. We hope the AI Handbook can support the industry in adopting artificial intelligence and big data practices in a meaningful way for the ultimate benefit of clients. We extend our deep thanks to our collaborators whose time and resources afforded to this important work ensure the practical nature of the AI Handbook.”

Larry Cao, CFA, Senior Director of Research, CFA Institute said: “The industry’s needs have grown from asking for proof that AI and big data work, to asking for an action plan that can provide support to firms’ strategy as machine learning methodologies rapidly become mainstream. The AI Handbook is the latest in a series of CFA Institute research aimed at equipping practitioners and policymakers with the tools to evaluate and incorporate AI and big data techniques with the highest standards.”

AI Handbook contents

The AI Handbook is written from the industry perspective and based on real-world, battle-tested solutions. Release I of the AI Handbook, published this week, provides “guided tours” of the current state of machine learning and data-science applications in investments through detailed insights from authors at Robeco, Goldman Sachs, and Neuberger Berman. Contributors from Applied AI, AllianceBernstein, Off-Script Systems, and Two Centuries Investments discuss advances in natural language processing and generation in the investment context including ESG analysis.

Release II of the AI Handbook, to be published in April, will offer leading-edge studies in trading with machine learning and big data from Virtu Financial and Man Group. Deep insights into chatbot, knowledge graphs, and AI infrastructure from the investment perspective, including intelligent customer service, accelerated AI and use cases in investment management, will be offered by Ping An and NVIDIA. A case study of Symbolic AI is offered by APG Asset Management.

Larry Cao, CFA, added:  “There is no single best operating model for data science integration that fits all asset management firms. Technologies must be customised to fit organizational culture, structure, core value proposition, strategic prioritization, and budgeting methods. The handbook offers a companion to support firms to start, refine, or plan the next phase of their data science journey.”

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“I’m honored to assume the role as Chair of the CFA Institute Board of Governors and continue the vital work of the governors, the Leadership Team, and the global membership to maintain the highest professional standards of our industry,” said Mark Lazberger. “My long-standing relationship with CFA Institute provides me with a unique perspective on the critical importance of the organisation’s vision and future, and I look forward to furthering these efforts on a global scale in partnership with my colleagues on the Board of Governors.”

Margaret Franklin, CFA, President and CEO, CFA Institute, said: “At the start of the new fiscal year, I am filled with optimism for the ways we can leverage learnings from the challenges of the past year and a half to propel CFA Institute forward. We have honed our strategy to guide us forward to further shape the future of the industry and the profession. We will continue to build out a diverse portfolio of learning products and modernize and grow the CFA Program. And we will focus our thought leadership on market resiliency, sustainability and ESG, financial technology, data and analytics, and on the future trends and behaviors that will change our industry. I look forward to working alongside Mark, Tricia, and our entire Board to deliver on our mission, and I am confident that their collective perspectives will prove invaluable in the months and years ahead.”

Lazberger is the Chairman at Omnia Capital Partners, based in Sydney, Australia. He also holds non-executive Director positions at Yarra Capital Management and Fisher Funds Management. He also serves as a Director for the Children’s Cancer Institute.

He previously served as the Chief Executive Officer of Colonial First State Global Asset Management and First State Investments, now known as First Sentier Investors, and oversaw more than $160 billion in funds and assets under management across equities, debt, infrastructure, and property. Prior to that, Lazberger was president, international, and executive vice president of State Street Global Advisors. Before this, he was head of international businesses, president and CEO of State Street Japan, and a Principal and regional managing director of State Street Global Advisors’ businesses in Japan and Australia.

In his prior Board service at CFA Institute (FY2012-FY2018), Lazberger served on various Board Committees including the Audit and Risk Committee, the Compensation Committee, and the External Relationship and Volunteer Involvement Committee, among others. He is also the Founding President and Member of CFA Society Sydney, a former board member of CFA Society Japan, and a member of the Future of Finance Advisory Council. Lazberger earned a Bachelor of Commerce from the University of Western Australia.

Tricia Rothschild, CFA, of Chicago, Illinois will serve as the Vice Chair of the Board of Governors. She previously served as the President of Apex Fintech Solutions, where she was responsible for the strategic planning, development, and overall growth of the company. She is the former Chief Product Officer and Co-Head of Global Markets at Morningstar and is currently an advisor to The TIFIN Group and a board member of the Financial Fitness Group. In her volunteer capacity at CFA Institute, she’s served as the Chair of the Risk Committee, on the Audit and Risk Committee, and on the Governance Committee. Rothschild earned a Bachelor of Science from Northwestern University and Master of Arts from Indiana University.

Board of Governors Roster

The FY2022 CFA Institute Board of Governors comprises a diverse group of 14 members who reside in eight countries, namely: Australia, Canada, China, Germany, India, Malaysia, United Kingdom, and the United States. CFA Institute membership elects officers for a one-year term and Governors for a three-year term that runs from September 1 to August 31. The full list of members for the new FY2022 term is:

• Mark Lazberger, CFA, (Australia), Omnia Capital Partners
• Tricia Rothschild, CFA, (United States), Advisor, The TIFIN Group and Board Member, Financial Fitness Group
• Marshall Bailey, CFA, (United Kingdom) Non-Executive Chairman, MUFG Securities EMEA plc
• Alexander Birkin (United Kingdom), EY
• Dan Fasciano, CFA, (United States), GW&K Investment Management
• Margaret Franklin, CFA (Canada), President and CEO, CFA Institute
• Joanne Hill, PhD, (United States), Cboe Vest
• Heinz Hockmann, PhD, (Germany), Senior Advisor and Member, Advisory Council, Lovell Minnick Partners LLC.
• Punita Kumar-Sinha, PhD, CFA, (India/United States), Pacific Paradigm Advisors LLC.
• Yimei Li, CFA (China), China Asset Management Co. Ltd.
• Karina Litvack (United Kingdom), Non-Executive Director, Eni s.p.a.
• Geoffrey Ng, CFA, (Malaysia), Fortress Capital Asset Management
• Diane Nordin, CFA, (United States), Director, Federal National Mortgage Association
• Maria Wilton, CFA, (Australia), Director, Victorian Funds Management Corporation

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Lisa Carroll

CFA Institute, the global association of investment professionals, has released the first report in a four-part research study examining the changes that investment organisations and professionals are likely to adopt post-pandemic, influenced by three critical elements: the context of careers, the content of work, and the culture of organisations.

In the report, The Future of Work in Investment Management, ^[1] workplace transformation is evaluated through the lens of the “what, where, and how”, with these factors evolving simultaneously and at a rapid pace during the pandemic. The report explores how the pandemic has impacted individuals’ attitudes toward their workplace environment, with implications for employers globally, as employees return to the office in some locations.

“Within the investment industry, the time is ripe to challenge the norms that have long driven our daily work lives. The way that we work must adapt,” said Margaret Franklin, CFA, President and CEO, CFA Institute.

The future of work in investment management is in hybrid workplaces. Among women, 87 percent agreed that they would like to work remotely part of the time, compared with 80 percent of men. Those earlier in their careers, with less than two years since earning the CFA charter, were least likely to want to work remotely, given that it is more difficult to learn from others in a remote environment, without the benefit of a robust professional network.

Lisa Carroll, CEO of CFA Societies Australia, said the pandemic has provided an opportunity for employers and employees to reconsider the future of work in financial services, with remote working now the norm.

Investment jobs have been resilient during the COVID disruption and Australia is no different. Just 10 per cent of professionals saw their employment status change because of COVID-19. That highlights that investment roles are well suited for remote working. We are seeing evidence of that during the current lockdowns in Sydney and Melbourne, where investment professionals are successfully getting on with their jobs from home,” she said.

“However, the study revealed that 20 per cent of Australian respondents have experienced a reduction in their total compensation since January 2020,” she said. On the positive side, 75 percent of investment professionals are confident their jobs will be secure over the next 18-24 months.

At the same time, remote working has created an urgency for new skills, with 91 per cent of professionals saying it is important for them to actively develop new professional skills. However, less than half receive support from their company to do this. “The onus is on organisations to adapt to the demands of the new environment and to support their employees and their professional learning,” said Carroll.

Given the blurring of home and work life, many investment professionals worked more hours during this time, leading to burnout. The number of respondents working more than 60 hours per week nearly doubled during the pandemic to 15 percent from 8 percent. Investment leaders were unanimous in their concern that mental health issues were the greatest threat to employees wellbeing.Not surprisingly, 82 percent of those surveyed expect to be heavy users of video calls in the future while expectations are that business travel will be permanently reduced by 25 to 50 percent. The report further explores the key three themes of workplace transformation:

• The Context of Careers – Where work gets done: Employers support their workforces’ desire to work remotely, with strong support for remote-work policies jumping from 15 percent pre-pandemic to 77 percent post-pandemic. Overall, investment professionals believe that remote work has increased their efficiency (53 percent). This adaptability applies across roles including those who were thought to be incompatible with remote work, such as chief financial officers and traders. The structure of investment management roles also indicates that they are well suited to a hybrid environment.
• The Content of Work – What works gets done: Modes of client communication will see significant changes with much more video conferencing. Yet investment professionals do recognise that the increased use of technology poses real risks, with 59 percent stating regulators will increase scrutiny of financial technology tools as hybrid models become more widespread. Investment professionals also recognise the need for professional development to further their careers.
• The Culture of Organisations – How work gets done: Many investment organisation leaders recognised a silver lining of the pandemic, with 59 percent citing that culture has improved because their staff have learned more about their colleagues. Yet, 100 percent of investment organisation leaders reported that mental health issues were a top concern as it relates to their employees, quickly followed by the impact of childcare and eldercare support (cited by 80 percent) on their staff. Notably, investment professionals reported a shift in what motivates them most at work, with workplace flexibility and having good team members becoming more important – this could be a direct result of the social isolation of the pandemic.

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[1] https://c212.net/c/link/?t=0&l=en&o=3175623-1&h=1128473786&u=https%3A%2F%2Fwww.cfainstitute.org%2Fen%2Fresearch%2Fsurvey-reports%2Ffuture-of-work&a=The+Future+of+Work+in+Investment+Management

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Margaret Franklin

A new study survey by CFA Institute, the global association of investment management professionals, reveals sustainable investing has been accelerated by the COVID-19 pandemic, though improved standards around ESG products are needed to mitigate ‘greenwashing’.

Among the findings, 85% of CFA Institute members surveyed now say that they take environmental, social and/or governance (ESG) factors into account when investing, up from 73% just three years ago. Although only 19% of institutional investors and 10% of retail investors currently invest in products with ESG factors, 76% of institutions and 69% of retail investors said they have interest in ESG investing (65% in Australia).

The report, The Future of Sustainability in Investment Management: From Ideas to Reality, reveals retail investor interest has risen most in the last two years in the UK, followed by Canada, Germany, Australia and Hong Kong. The study includes the perspectives of over 7,000 industry participants, including investors, investment practitioners and ESG specialists.

A majority (71%) of participants agreed that alternative data, or data derived from non-traditional sources such as the internet and social media, have the potential to improve the robustness of sustainability analysis. Most respondent (78%) also believe there is a need for improved standards around ESG products to mitigate ‘greenwashing and to boost transparency about ‘green;’ claims.

“Incorporating sustainability in investment management has become part of our industry’s mission to serve society by improving long-term outcomes,” said Margaret Franklin, CFA, President and CEO of CFA Institute. “This moment represents a valuable opportunity for organisations to address this challenge and help shape a future worth investing in. As the focus on sustainability in investing gathers momentum, it will eventually dictate the sustainability of investing itself.”

The reason for incorporating ESG in investment decisions are varied. For asset managers who consider ESG in their investment analysis and decisions, client and investor demand is one of the biggest factors (for 59% of firms), as well as the need to manage investment risks (for 64% of firms). Just 35% consider ESG to improve financial returns, despite the outperformance of ESG indexes during the COVID crisis.

“For many years, sustainable investing could be characterised as ‘a slow-moving but unstoppable train,’ but this year’s events have accelerated it. With the COVID-19 pandemic, the health and safety of various communities has become a larger consideration. In addition, unrest over racial inequality in the US increased focus on social responsibility,” said Lisa Carroll, CEO of CFA Societies Australia.

In addition to these findings, the report found that 90% of investment professionals expect their firm’s commitment to ESG research will increase, up from 72% just two years ago, which has led to a shortage of investment professions with ESG expertise. Other findings from the study include:

• ESG ratings: Company ratings are widely used, with 63% of investment professional respondents using them as a part of their data analysis. In addition, 73% expect the influence of ESG ratings on firms’ cost of capital to be greater in the next five years.
• Climate risk: 40% of investment professionals surveyed incorporate climate risk into their analysis, and the most common types of risk considered are physical and transition risks.
• Implementation: The most used features are best-in-class/positive screening (used by 56% of survey respondents) and ESG integration (53%), followed by ESG-related exclusions (48%). Voting, engagement, and stewardship are used by 40%, and thematic is used by 35%.
• Expected growth areas: Industry professionals expect to see more ESG index tracking and quant funds, ESG thematic products, ESG multi-asset products, climate transition strategies, long-term engagement, and better benchmarks.
• Demand for ESG expertise: A review of 10,000+ LinkedIn investment professional job posts found in August 2020 that approximately 6% mentioned sustainability-related skills. Demand for sustainability talent is rated as “very high.”
• Current structure and roles: About one-third of investment organisations have dedicated ESG specialists, and a third have portfolio managers conduct ESG analysis.
• Supply of ESG expertise: An analysis of 1 million investment professionals on LinkedIn found that less than 1% had disclosed sustainably-related skills in their profile, despite 26% growth in sustainability expertise in the last year. Women represent 42% of ESG analysts, which is much higher than the 26% of women overall in the sample

About the survey

The report is informed by views of more than 7,000 industry participants, including more than 4,400 investment clients, consisting of 3,525 retail investors (with minimum assets of US$100,000) and 921 institutional investors (pension funds, endowments, foundations, insurance companies, and sovereign funds of US$50 million assets under management or greater across 15 markets, surveyed in October/November 2019 by Greenwich Associates. More than 2,800 investment practitioners, CFA Institute members globally, were surveyed in March 2020. Research was conducted via surveys and virtual roundtables across 31 markets globally including Australia.

Media Contact

Nicki Bourlioufas

Telephone: +61 786 933

nicki@spotoncpr.com

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Margaret Franklin

CFA Institute, the global association of investment professionals, announced today the publication of a Consultation Paper seeking feedback on its proposed Environmental, Social and Governance (ESG) Disclosure Standards for Investment Products (“the Standard”).

The Standard will primarily focus on disclosure requirements for investment products with ESG-related features so that investors can more comprehensively evaluate whether an investment product will meet their needs.

“With growing interest in ESG investing, support is widespread from the investment community for the development of a standard to reduce confusion and facilitate better alignment of investor objectives with investment products,” said Margaret Franklin, CFA, President and CEO of CFA Institute.

“Setting global industry standards to ensure transparency and safeguard trust is integral to our mission and will help consumers to make more informed decisions about investing in ESG products,” she said.

The ESG Disclosure Standards for Investment Products will add to CFA Institute’s Global Investment Performance Standards (GIPS®) and the Asset Manager Code. CFA Institute is calling for volunteers to support the next phase of the Standard’s development.

Lisa Carroll, CEO of CFA Societies Australia, said the CFA Institute understands how important it is to work with the wider investment community across the Asia-Pacific, including Australia, to ensure the investment industry’s views are reflected in the proposed Standard.

“Their input not only safeguards transparency and trust in the Standard, but it ensures the ESG Disclosure Standards for Investment Products will achieve the credibility of CFA Institute’s other standards including the CFA Institute GIPS® and the CFA Institute Asset Manager Code,” Carroll said.

The proposed CFA standard will define and classify ESG-related features and establish disclosure requirements and procedures for independent examination. That differs from existing standards that set disclosure requirements for corporate issuers, prescribe requirements for the labeling or rating of securities or investment products, or define best practice for a strategy or approach.

The Consultation Paper was written with the help of a working group of 15 international volunteers who have ESG expertise, as well as experience as asset owners, asset managers, consultants and service providers.

The paper defines ESG-related features as components or capabilities of investment products that can be combined in different ways to meet different investor needs. It goes on to propose definitions for six ESG-related features, summarised below. The features are expected to serve as a backbone of the Standard.

1. ESG Integration: Explicitly considers ESG-related factors that are material to the risk and return of the investment when making investment decisions.
2. ESG-Related Exclusions: Excludes securities, issuers, or companies from the investment product based on certain ESG-related activities, business practices, or business segments.
3. Best-in-Class: Aims to invest in companies and issuers that perform better than peers on one or more performance metrics related to ESG matters.
   ESG-Related Thematic Focus: Aims to invest in sectors, industries, or companies that are expected to benefit from long-term macro or structural ESG-related trends.
4. Impact Objective: Seeks to generate a positive, measurable social or environmental impact alongside a financial return.
5. Proxy voting, Engagement and Stewardship: Uses rights and position of ownership to influence issuers’ or companies’ activities or behaviors.

CFA Institute now seeks input from the wider investment community to help shape an Exposure Draft, an initial version of the ESG Disclosure Standards for Investment Products, which is expected to be released in May 2021.

The Consultation Paper, a response form for providing comments (due by 19 October 2020), and volunteer opportunities (apply by 23 September 2020) can be found here.

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Margaret Franklin

CFA Institute, the global association of investment professionals, announces that it will transition to Computer-Based Testing (CBT) for all three levels of the CFA Program in 2021. Level II and Level III examinations for 2021 will be administered via CBT, along with the already-announced transition for Level I. The December 2020 administrations will therefore be the final paper-based tests for any CFA Program exam.

The decision to accelerate the move to CBT for Levels II and III is in response to the impact of COVID-19. CFA Institute had been planning this transition as part of a broader effort to deliver exams via computers in secure test centres versus on paper in large testing spaces; this shift is already underway for Level I. This change allows CFA Institute to provide smaller exam settings, more exam dates, and easier scheduling with more locations.

This natural evolution also responds to how global testing and credentialing practices have changed and the recognition that the investment profession operates in a digital world. Offering the exams and learning experience in a digital environment will allow CFA Institute to better model the tasks and work experience of today’s investment professionals. As with the Level I exams, CFA Institute will work with Prometric as its primary collaborator to administer CBT, with British Council serving as collaborator in India and Africa.

“While the last paper-based test marks the end of an era for CFA Institute, technological advances in computer-based testing enable us to meet the growing global testing demands of candidates and will improve their experience with a wider selection of test venues and more flexible scheduling options,” said Margaret Franklin, CFA, President and CEO of CFA Institute. “We are working diligently to ensure a seamless transition and superior exam experience for our candidates. It goes without saying that we will uphold the rigor of the passing standard to earn the CFA charter.”

August 20^th, 2020 will mark the opening of registration for all 2021 CBT exams. There are several key changes that offer candidates greater flexibility and an enhanced examination experience:

The Level I computer-based exam will be offered four times per year, beginning in 2021. The Level II and Level III computer-based exams will be offered two times per year, starting in 2021. To earn the charter, a candidate must pass all three levels in sequential order. As part of the move to CBT in 2021, candidates will be offered windows of up to 10 days for scheduling their exams at a secure test centre (testing will be in-person only, not remotely) as opposed to the current single-day testing. The schedule for 2021 follows:

• • February: Level I only
  • May: All Levels
  • August: Level I and Level II
  • November: Level I and Level III

In consideration of COVID-19, CFA Institute is offering all currently registered December 2020 candidates the opportunity to keep their exam date or to postpone their date to one of the CBT dates in 2021. Please see the FAQs for more details about changes to the exam cycle, information on computer-based testing, and exam policies.

CFA Institute intends to hold the December 2020 exams for all levels in every location globally where it is possible with the relevant health measures in place and in line with local government and health regulations. CFA Institute is following local health policies across the globe, tracking developments closely, and will adapt examination plans as needed.

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