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Investments & Wealth Institute CEO, Sean R. Walters, addresses the audience at its annual Experience 2024 conference regarding updates this year to enhance its CIMA certification curriculum.

IWI Focuses on Alts, Investment Implementation with CIMA Changes

The Investments & Wealth Institute has updated its CIMA certification curriculum and exam for the first time since 2019.

The Investments & Wealth Institute, the professional organization that administers the Certified Investment Management Analyst (CIMA), Certified Private Wealth Advisor (CPWA) and Retirement Management Advisor (RMA) certifications, has updated its CIMA curriculum and exam for the first time since 2019. The organization has changed about 20% of the exam and learning requirements to reflect financial advisors’ current knowledge and skills.

The new exam, which will go into effect on Aug. 1, 2024, will focus more on alternative investments and private markets, increasing from 2% to 5% of the exam, and portfolio construction, rising from 5% to 8%. As part of the alternatives section, it will also test advisors on cryptocurrencies and digital assets for the first time.  

IWI CEO Sean Walters said those changes reflect high-net-worth investors demanding more sophisticated investment products, such as alternatives and digital assets. An IWI survey of HNW investors found that investment management was the most important service they expected from their advisors.

“There are some advisors who won’t recommend products they don’t understand,” Walters said. “And I don’t blame them for that. But if I’m a high-net-worth client and I’m eligible for private markets or private credit, or I have really complex portfolio construction needs, I don’t want my advisor to outsource that to some TAMP or just use the model portfolio that rolls down the hill from the home office. I want them to know how to do portfolio construction at a high level.”

IWI will reduce its focus on some technical portions and areas heavily covered by technology today. Risk and risk measurement calculations will now count for 6% of the exam from 12; performance measurement and risk attribution will make up 5% of the exam from 8%; and client discovery and investment policy will represent 6%, down from 8%.

“Today’s professional doesn’t need to understand those as well as they did, say, 10 or 15 years ago because technology is lifting that burden, which allows them to focus their time and effort on higher cognitive-level tasks, like applied portfolio construction or applied portfolio analysis,” said Sean Walters, CEO of IWI.

The exam will also include a new section of content on “investment implementation approaches” at 5% of the test. IWI points out that while more advisors are outsourcing investment management to TAMPs, model portfolios or digital allocators, they need to understand those models and the investment decisions behind those recommendations.

“In a lot of firms, they have a team of investment analysts who assemble a model portfolio, and they almost distribute it through the advisors that are tied in with that firm,” Walters said. “It’s like the blue pill that rolls down the shoot, and they just give it to their client without thinking.”

The investment implementation section will cover the applications of asset allocation methodologies, resolving concentrated stock positions in a portfolio and how to address questions of accumulation and distribution based on client time horizons, assets and liabilities and objectives.

The changes to the CIMA were based on a 2023 job task analysis study that IWI conducted with HUMRRO, a non-profit test development organization. They surveyed 300 investment practitioners, asking them about the relevancy of specific knowledge required to perform their jobs.    

The IWI currently has about 21,000 members, about 13,000 of whom hold CIMA, CPWA or RMA certifications. That’s up from 10,628 certificants in 2019. Less than 3% of advisors hold the CIMA certification. However, a Cerulli Associates study found that over 15% of teams with $500 million or more in assets have at least one CIMA on staff.  

Based on a two-year average, the CIMA exam currently has a 48% first-time pass rate.  

“It’s a challenging exam,” Walters said. “I do not expect that it will get more challenging. If anything, having it more up-to-date will help candidates have more success in the exam.”

The IWI was previously known as the Investment Management Consultant’s Association (IMCA). It was rebranded in 2017 to establish itself as the next step after CFA and CFP.

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