In May, the CFA Institute Board of Governors met to discuss the current state of the organization and progress on our strategy. Below, we share more about the current CFA Institute financial picture and our “future proofing” work to modernize and grow the CFA® Program. We’re also excited to share details about the upcoming Society Leadership Conferences and successes we are seeing in new institutional engagement efforts.
UPDATE ON CFA INSTITUTE FINANCES
The organization continues to be challenged by impacts from the pandemic. As we’ve shared previously, unexpectedly high exam deferrals and COVID-related closures of test centers, coupled with resulting low pass rates, have impacted both revenues and demand. As a result, we’ve seen relatively small growth in the CFA Program cash receipts compared to FY21, and less than our targets for new Level I registrations in each new window. That said, improving pass rates and paid deferrals are showing incremental improvements. We are optimistic about candidate volumes for the remainder of the fiscal year and are carefully watching registration trends in each of our key markets as we approach exam window deadlines.
When it comes to membership, renewals are largely flat year-over-year at the CFA Institute level, with a slight increase coming from new charterholders—that is, qualified candidates who have passed their Level III exams. The Certificate in ESG Investing has shown strong registration rates so far this year, and we expect that we will meet or exceed our target for the year.
The last two years have seen lower cash flow than pre-pandemic levels, even as we’ve put in measures to reduce our expenses. To help manage this, the Board approved a one-time use of our reserves to help with this fiscal year’s net cash outflow, allowing the organization to operate without interruption and ensure funding to support our most strategic growth opportunities. However, overall organizational expenses remain above current revenues. To meet the Board’s expectation that we will prepare a balanced budget for FY23, we continue to look for cost savings as we budget for next year. As we develop the long-term society funding model for FY24 and beyond, we are keeping this context, along with our commitments to the society network, top-of-mind.
"FUTURE PROOFING" THE CFA PROGRAM
Another major topic discussed at the May Board meeting was how we are modernizing and growing the CFA Program as part of our refreshed strategy. While we are also working to diversify our product portfolio, the CFA Program is, of course, our main driver of revenue. To ensure that income stream is sustainable amidst changes in the market, we recognize that we must evolve the CFA Program to meet current and future demands of employers, candidates, and prospects.
Over the last few months, we’ve been developing a “Future Proof” strategy in support of this strategic goal to ensure the continued relevance of the CFA Program. The strategy we have developed aligns with three key strategies within Credentialing: to maintain and increase relevance, to reinvigorate demand in the CFA Program, and to enhance the candidate experience.
Through the Future Proofing initiative, we aim to achieve the following, all while maintaining the rigor and relevance of the program:
- appeal to more audiences and expand our addressable market
- align us to changing candidate and employer preferences
- make the program less intimidating and less “all or nothing,” allowing us the opportunity to engage our audiences as their relationship with CFA Institute evolves
We are working on the details of how we will execute this initiative and look forward to sharing those with you in the coming months. Through all the opportunities we are considering, we’re starting with what our learners and customers want and where we can increase our relevance and influence.
WHAT WE’RE HEARING FROM THE INDUSTRY
As you know, our strategy involves bringing additional learning products to the industry. Our relationship management teams have been very actively engaging institutions around the world, often in partnership with local societies. It is exciting to see interested in the Certificate in ESG Investing and other potential products, and I would like to highlight some of the successes our relationship management teams have had recently.
- We’ve secured a partnership with MSCI in Asia not only to adopt our ESG Certificate globally to train their staff but also to attract and recruit staff members for their global ESG data and reporting centers in India and the Philippines.
- Morningstar India has chosen to offer our ESG Certificate to all its employees, after evaluating several other ESG-focused programs.
- In the US, JP Morgan, being the largest employer of CFA charterholders globally, will fully reimburse all Asset & Wealth Management employees who are interested to pursue either the CFA charter or the ESG Certificate. We have similar success stories with Vanguard and Franklin Templeton.
- In Latin America, the team is currently negotiating with IFC for the bulk purchase of our Certificate. IFC have already committed to a purchase of 50 registrations to distribute as scholarships through LatAm and the Caribbean.
- We have a strong pipeline with continuing conversations including Schroders, Moody’s, KPMG, and the UN Pension Plan.
- In EMEA, the team is in the process of securing a bulk purchase of 100-plus certificates by Deutsche Bank, with potentially several hundred more across their business units and subsidiaries. We’ve also built an excellent relationship with S&P Global, who would like to contribute to the future development of the ESG curriculum, while they actively promote the certificate amongst their staff—with reimbursement. Other recent wins include Natixis, Julius Baer and BNP Paribas.
We are also engaging with BlackRock and Allianz as strategic partners for the new version of our Investment Foundations and Sustainable Investment education. Developing B2B strategic partnerships and delivering ongoing solutions to educational needs will drive our future success. Our Institutional Relations and Society Relations teams are ready to collaborate with your society leaders if there are doors to open and relationships to grow in your markets. Please don’t hesitate to connect with your Society Relationship Manager.
WRAPPING UP FY22 & KICKSTART TO FY23
With the end of the fiscal year in our sights, there’s a lot on the horizon and into early FY23.
BUSINESS PLANNING & OPERATING STANDARDS PROCESS IS WELL UNDERWAY
A friendly reminder that FY23 Business Plans are due Friday, 29 July. Please work with your Society Relationship Manager around any areas where you need additional support or if there are any practical opportunities for partnership you’d like the team’s help with to support your society’s activities in FY23.
UPCOMING PROFESSIONAL LEARNING PRODUCTS
If you haven’t checked out the Professional Learning team’s product pipeline recently, there are some very timely courses and content coming out in the next few months around AI and machine learning, crypto assets, data science, power BI, and much more.
ANNUAL PARTNERSHIP EFFECTIVENESS SURVEY
For more than a decade, Society Relations has conducted an annual Society Survey seeking input from societies on their satisfaction with CFA Institute support and our partnership. Last year, we evolved that survey to assess the effectiveness of our partnership. The Principles of Partnership, updated in collaboration with societies in 2019, reflect our commitments to one another, and the Partnership Effectiveness Survey aims to assess how well societies feel we are all living up to those commitments.
We will kick off this survey to the global society network in early July. All society leaders and society staff are welcome to complete this survey.
SEE YOU AT THE SLCs!
We could not be more excited to reconvene in the coming months after so long apart! In spite of budget constraints, the Board of Governors and Leadership agree on the importance of societies and CFA Institute reconnecting in person. Dates for the fall regional Society Leadership Conferences (SLCs) are as follows:
- 6–7 October 2022: AMER SLCs in Boston, USA
- 20–22 October 2022: EMEA SLCs in Vienna, Austria
- 18–19 November 2022: APAC SLCs in Kuala Lumpur, Malaysia
As soon as the travel policy for the SLCs is approved, we will communicate it in an upcoming Weekly Connexion email, so be on the lookout.
CONGRATULATIONS TO OUR SOCIETY AWARDS WINNERS!
I would like to close by expressing a most heartfelt congratulations to our 2022 Society Awards Programme winners! Thank you for representing our CFA Society network in such a positive light and making an outsized impact in your markets. See a list of our winning societies here on Connexions, and keep an eye out for feature articles on the home page of the site.
RESEARCH, ADVOCACY, AND STANDARDS
ESG Disclosure Standards Handbook
CFA Institute has published its Global ESG Disclosure Standards for Investment Products Handbook and an optional ESG Disclosure Statement Template, making complying with the ESG Standards easier. Find them on our website.
CREDENTIALING AND CANDIDATE SUPPORT
Ecctis Endorsement
We are proud to announce that Ecctis, a UK-based and internationally respected reference point for global qualifications and skills standards, has deemed the CFA charter comparable to a Master’s degree in key 12 markets—markets that account for over 80% of CFA Program candidate volumes. This is a valuable finding for prospects weighing the CFA Program against an MBA program.
The CFA Program was evaluated on six key criteria: entry requirements, duration, content and structure, modes of learning and assessment, learning outcomes, and associated outcomes. Learn more about the evaluation process and find a list of the 12 markets and their comparable qualifications in our press release.
SOCIETY MANAGEMENT
FY23 Business Planning
You can find the FY23 Business Plan Template on Society Center within the Standards and Funding tile>Business Planning and Operating Standards section.
OUTREACH AND MARKETING
Student ESG Certificate Campaign
This month, our marketing team will kick off a campaign to promote the Certificate in ESG Investing to students around the world. Participating societies are encouraged to complement this campaign and reach out to their local student cohorts. For email copy to leverage, please contact your Relationship Manager.