Basic Training

So, you've decided it's time to move up to a new professional designation. How do you go about it—and keep your day job?

The answer: with difficulty. Especially when you're talking about the handful of major designations, the process involves an intense, demanding course of study, culminating in a grueling exam. “I knew the test was tough, but I had no idea just how tough,” says Mark Silverman, 31, a broker with Tucson-based Harris AdvantEdge Investing Edge, a division of Harris InvestorLine, who is getting ready for his second try at the exam for level one of the Chartered Financial Analyst (CFA) designation.

It's also not cheap. Just the basic textbooks for the CFA cost around $1,500, while the Chartered Investment Management Analyst (CIMA) can run as high as $5,000. Some companies may agree to foot the bill, but others — even the big ones — may not. Silverman, for example, has paid $3,000 for study materials and registration himself.

If you've decided to go for it, here's what to expect:

Chartered Financial Analyst

Probably the toughest of them all, the CFA designation is administered by the Association for Investment Management and Research (AIMR) in Charlottesville, Va. The organization doesn't provide training. But, every September, it publishes an outline, syllabus and recommended reading for each of the three exam levels candidates must pass. And there's a ton of it: between nine to 12 textbooks, depending on the level, costing from $450 to $575 per level.

To get ready for the exam, you have a few options. You can buy the materials from AIMR and study on your own. Or you can purchase extra study guides from places like Schweser Study Program, a La Crosse, Wis.-based division of Kaplan. It sells everything from a $275 set of six books providing summaries of the AIMR-required curriculum to flash cards, videotapes, a $350 online program with 10 hours of streaming video and PowerPoint presentations for each CFA level and access to faculty-led chat rooms and message boards.

Doing it completely on your own isn't advisable, however. Again, you have alternatives to choose from. About 50 companies provide more training. For $375, Schweser offers a three-day intensive seminar in the spring in 20 cities, from New York and Boston to Hong Kong and Seoul. (You also have to buy the study notes.)

In May, you can attend a $625 five-day review session in Boston or Los Angeles, or a seven-day stint at the University of Windsor in Ontario. (That's $2,000. But it includes meals and lodging.) Or there's an 18-week traditional classroom option, meeting three hours a week in the evening in New York, Boston and Philadelphia, and, starting next year, in Chicago and Los Angeles.

Another possibility is to contact your local AIMR society, to see whether it provides study programs (check www.aimr.org/socservices/societies.asp). For example, the New York Society of Security Analysts, one of the largest such societies, with 8,000 members, offers an 18-week class, at a cost of $1,050 to $1,200, or a $750 to $950 three-day crash course, done in conjunction with a third-party provider. Or, a volunteer coordinator can arrange formal study groups for candidates; they generally meet once a week in the evenings.

The big test — a 9 a.m. to 4 p.m. effort — is given just once a year at about 150 locations worldwide. (The level one exam will be offered twice a year starting in 2003.) That means if you fail — and about half do — you have to wait a whole year to try again.

Certified Financial Planner

The Certified Financial Planner Board of Standards in Denver awards this designation. It provided pre-exam courses until 1985, when the College for Financial Planning in Greenwood Village, Colo., split from the board and took over training.

About 140 colleges, universities, and other organizations now teach CFP courses. Some, like Kaplan College in Denver, provide online instruction. Still, the College for Financial Planning is probably the biggest player in the field — about 25 percent of people who take the CFP test use their program.

How does it work? You can go through regular classroom instruction at one of 40 or so community colleges, corporate trainers and other affiliates or at DePaul University or New York University. But most candidates take a self-study route, a mix of print, CD-ROM, or online materials. (Cost: $2,295, plus about $400 for approximately 10 textbooks, purchased from any outside bookseller.) The program, which takes two to five years to complete, is broken into five areas — the financial planning process and insurance, investment planning, income tax planning, retirement planning and employee benefits, and estate planning. Generally, students spend four to six months mastering each section, after which they take a computer-based exam at any of the 1,000 or so Prometric computer centers in this country and abroad.

After the last test, you're eligible to take the real thing — the CFP Board examination. A two-day, 10-hour affair, it's offered three times a year at about 50 sites. The general pass rate for first-time test takers is 58 percent.

But that's not all. You also need three years of work experience if you have a BA, or five years without a degree. Plus, after you pass the exam, there's a continuing education requirement of 30 hours every two years.

Certified Investment Management Analyst

The Investment Management Consultants Association in Denver administers this one and also provides training. It comes in two stages. First, candidates receive study materials — three modules (in notebook form or online) on manager search, investment policy and asset allocation, and performance measurement — two textbooks, a math primer and a series of articles. About two months later, candidates are expected to schedule a 50-question computer-based multiple choice test at a Prometric site. If they pass, then four months after that, they can enroll in a one-week course held at the Wharton School at the University of Pennsylvania. It's held 10 times a year. (There's also a one-week course held at a Rancho Santa Fe, Calif., resort in March.) Classes are taught by Wharton faculty and held at the Steinberg Conference Center. At the end of the week, there's a four-hour exam.

Access to such facilities doesn't come cheap. $4,965 for IMCA members, in fact, with $1,400 paid up front as a deposit. So, it's best to follow the lead of Ron Hertel, 58. Last year, he asked his employer, Prudential Securities in Boston, to reimburse him. The company agreed — but only if he passed. (He did.) A 33-year industry veteran, Hertel enrolled to help focus his business more on consulting. “The industry has evolved to be more a matter of managing money and offering objective advice,” says Hertel, who credits the knowledge he gained for a recent win of a multimillion-dollar account.

To get a CIMA, you also need three years experience in investment management consulting and 40 hours of continuing education every two years. At least half of that has to be done through IMCA-sponsored events.

Chartered Financial Consultant

The American College in Bryn Mawr, Pa., oversees the ChFC and also provides training. Candidates take eight courses. Five are the same ones you need to qualify for a CFP. The rest are electives such as financial planning applications, estate planning applications, and financial decision-making at retirement. You can choose online, textbook, or audiotape materials. Most people take a self-study program, but for locals, there's also a classroom-based option. Cost: $300 to $395 per course. One plus: Since there's so much overlap, a ChFC can automatically sit for the CFP. And, while you have to take a two-hour computer-based test after every course, there's no big final exam.

Of course, those aren't the only designations available. The College for Financial Planning, for example, administers and provides training for the Chartered Retirement Planning Counselor and Chartered Retirement Plans Specialist. They cost $700, involve just one course and only take about four months to complete. Sounds like a vacation compared to some of the others.

Adding a Few Letters After Your Name is Neither Cheap Nor Easy

Here's a Guide to the Four Leading Designations:

Designation Sponsoring Organization Contact Information Estimated Cost and Time to Complete Who It's For
Chartered Financial Analyst (CFA) Association for Investment Management and Research (AIMR) 800-247-8132 or aimr.org $2,000 to $4,000; three years minimum Financial analysis, accounting, portfolio management, statistics, ethics
Certified Financial Planner (CFP) CFP Board of Standards 888-237-6275 or cfo-board.org $2,500 to $3,000; two to five years A complete overview of financial planning, i.e. estate planning, insurance strategies, investment theory
Certified Investment Management Analyst (CIMA) Investment Management Consultants Association (IMCA) 303-770-3377 or imca.org $5,000; six months Aimed at investment consultants; from asset allocation to manager due diligence
Chartered Financial Consultant (ChCF) The American College 888-263-7265 or amercoll.edu $3,000; two to three years Another financial planning choice, with insurance and tax issues, estate planning
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