If you’re sitting the CFA exams on June 23, you may well be sitting them in Asia Pacific. For the first time in a June exam, APAC countries are expected – based on final registrations – to supply more CFA candidates (117,390 people or 53% of the global total) than all other markets combined.
And for the whole of the institute’s current fiscal year (the 12 months to end-August, which includes last December’s exams) the APAC figure could be as high as 54%. That’s a significant rise from 49% in 2017, 38% in 2007, and just 21% in 1997.
Perhaps unsurprisingly, China is one of the main drivers of this regional growth, says Nick Pollard, Asia Pacific managing director of the CFA Institute. “People there want to feel globally credible and their local investment qualifications don’t give them this,” he adds.
In Asia, the CFA qualification has “the American dream behind it – like Coke or Apple”, Pollard told eFinancialCareers at the recent CFA Institute Annual Conference in Hong Kong. “We open doors for people internationally because everyone from Hong Kong to Houston goes through the same study and exam process.”
The expansion of the CFA candidate pool in Asia has created some difficulties for the institute, though. In Beijing alone next month, for example, there will be six testing centres serving 19,000 candidates. “Even feeding them is a logistical challenge,” says Hong Kong-based Pollard. “We also have to make sure we have large enough exam venues and that we manage the security side, so the exam papers get back to the US safely.”
Given these concerns, is there potentially an upper limit on how many people should be taking the exam in Asia? Does growth compromise quality? Pollard doesn’t think so. “There’s still a lot of room for expansion here. You need four years’ relevant experience in portfolio management or research analysis to become a charterholder, and currently only about 9% of these types of roles in APAC are filled by charterholders,” he explains.
In China, the investment management industry is growing rapidly and “there’s a drive to improve the quality of advice in the sector”, adds Pollard. “This means there’s strong demand from employers for the CFA qualification alongside the high supply of candidates.”
Charterholder growth
Employers in Asia, however, can actually find it tough to recruit people with the CFA to their name. While candidate numbers in APAC have surged in recent years, the number of people who have passed all three levels of the CFA and have gone on to become actual charterholders remains low compared with other regions. At the end of August 2017, there were 27,200 charterholder in the region, just 18% of the global total.
The APAC proportion will steadily improve (the 2017 figure was up one percentage point over the previous year), but this will take time, says Pollard. “For every five people who start the first exam only about one gets through to be a charterholder,” he adds. “But drop-out rates in Asia are about the same as everywhere else, so we will see more and more people here with the CFA designation.”
Pollard is also looking at more proactive ways to increase the charterholder population in Asia, such as partnering with several local governments in China. Chengdu, for example, offers CFA charterholders housing incentives to live there, in an effort to bolster itself as a financial centre.
The CFA Institute has opened 10 new APAC test centres, including in Chengdu and Shenzhen, since 2013 and plans to open six more, from Bhopal to Brisbane, in the next 18 months. “But given our growth in Asia, there may come a time where we need to also offer computer-based assessments,” says Pollard. “Investing more in this kind of technology is one of the things my team and I are looking into this year.”
Over the past two years the number of APAC-based investment practitioners helping to draft the CFA curriculum has also increased. About half of this 35-strong group are now based in the region. “Asian representation has historically been low, but we now have more of a voice, which better reflects the nature of the investment sector,” says Pollard. “The CFA content will, of course, always remain global.”
Pollard joined the CFA Institute in 2016 and says working for more than 30 years in the finance sector, latterly at Coutts, helped prepare him for the challenges he now faces. In 2009, he moved from London with Coutts to become the Singapore-based CEO for Asia. It was a tough time for the firm, which had just lost more than 100 staff to rival BSI in one of the largest defections in private banking history. “This was not business as usual; this was falling off a cliff,” he says. “I went out to meet our top-100 clients across Asia and was at the MAS once a week reassuring them that we could manage our risks and wouldn’t be closing down.”
The Coutts ship eventually steadied, and Pollard helped the bank retain 90% of its Asian business. After a stint in charge of professional development at the bank globally, Pollard left Coutts in 2016 shortly before it sold its international business to UBP.
“When I was then approached for the CFA role, I initially didn’t know much about the institute, other than having been impressed by the charterholders I’d hired,” he says. “But after so many years in banking, I was attracted by working for a not-for-profit organisation. I found the pace a bit slow at first, but that’s now changing as we professionalise our APAC operations and hire more people from the financial world. We’re brought in an APAC legal counsel, a new finance team, and an advocacy team. I’ve been building our bench strength.”
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