I am pretty sure this is nonsense
I have a confession to make. I am no longer a CFA Charterholder. As of 1 September 2023, my charter has lapsed.
I have many reasons why I have decided to leave an organisation that I have loved and where I have been engaged as a volunteer for more than a decade, but I am not going to talk about it publicly. Friends of mine know the reasons and for the rest of the world, all I want to say is that the CFA Institute is no longer what it used to be.
One area where the CFA Institute has changed and that I want to talk about is its conferences. To me, attending the CFA Institute Annual Conference was a must every year and I always thought that in-person conferences are the most valuable benefit for members by a wide margin.
With the advent of the Covid pandemic, CFA conferences had to be cancelled. I fully understand that. What I do not understand is that the CFA Institute has not relaunched the Annual Conference since. If anything, it has reduced its events programme even more after the pandemic ended. The CFA Institute Annual Conference has not been held since 2019 and the other important conference, the Annual Investment Management Workshop seems to have had its 52nd and final instalment in 2022. Even the Alpha Summits, which have been held virtually and thus have become virtually useless to me because the true value of a conference lies in the networking, not in the content of the presentations, have not been held since May 2022.
As far as I am concerned, the CFA Institute is providing zero membership value anymore and has simply become a credentialling institution trying to sell courses and exams and the right to add three letters after your name. I am too far advanced in my career to need these three letters, so I have decided to let my membership lapse.
Ironically, if I was able to believe a new study by Owen Davidson and his collaborators, I could convince myself that by doing so I am helping increase market efficiency.
The study looked at the market reaction to earnings announcements of companies in the week before and during the eight Equity Research and Valuation conferences from 2012 to 2019. They find that while these conferences are taking place, equity analysts cannot react to earnings announcements as quickly as normal. The result is that the share of retail trading increases during the conference days and these retail trades appear more profitable than normal. But don’t worry, even if the share of retail volume increases by several standard deviations due to the absence of professional analysis, the average return for retail traders remains negative. They just lose less than normal.
To be honest, I am pretty sure the results in this paper are an artefact of data mining. Despite the robustness tests shown in the paper, the effect size is so small that it is economically meaningless. Plus, this study analysed 24 trading days in a period of eight years. I think the likelihood of coming up with a false positive in a statistical analysis of trading volumes where it is hard to identify investor types to begin with is very high.
But if this effect is real, then the best we can do as CFA Institute members are not to attend CFA Institute conferences because apparently that increases trading volume and improves price discovery. Maybe the CFA Institute has done us all a favour by cancelling its conferences. If only they would be giving us members a rebate in our fees for not offering any membership value anymore…
Thank you for this candid post. I had been thinking of this but not yet brave enough - but energised by your comments. Of course I would know if I listened to my son starting his career in finance, none of his peers will sit the exams. 37% is the pass rate I hear. Know 25% of the course really well and throw darts at the rest of the questions. And the academics that encouraged students (I still do career talks and I lecture at 3 ‘partner’ unis) feel let down by lack of contact and no research challenge. I am responsible for encouraging colleagues also to keep membership, but no longer feel I can advocate. I know you have put in immense work and thought to build CFAI and its research but it’s not the same organisation. There was a vision to be more of a professional body but it’s commercial now and we don’t need a not-for-profit to do that. Not enough on the board or leadership with real world buy side experience to relate to the membership. Not many sell-side practitioners either. I have 4 professional memberships and CFAI stands out as the one that didn’t adapt. No direct engagement with the majority of the membership by its leadership. I just feel sad but five years ago I feared this might happen. Membership of any organisation, much like being a citizen or bank customer, is an exchange of credit. Demonstrating value in that should be an easy win for an organisation. You certainly were a net contributor in that reputational exchange and it’s diminished by your departure.
The CFA Institute definitely seems to have lost it's way. I'm on the fence whether to let my membership lapse next year or not.
They made fairly dramatic changes last year that flew under the radar (Chris Bloomstran led the fight to vote them down but the odds were heavily slanted in the CFA's favour) https://twitter.com/ChrisBloomstran/status/1546965288524079111
They just recently sent out a (panicky) e-mail to try and increase enrollment in the CFA exams (?) that came off more as an MLM pitch than anything. But it really just showed the Institute's true colours and focus. All they seem to care about is empire building.
They've also completely failed when it comes to policing their own members and what they say publicly. This has been a huge problem over the last couple of years and some high profile members have deliberately spread misinformation (repeatedly) to drive engagement to their own "brands". I've reported a number of these individuals and provided dozens of tweets and other social media posts as evidence and yet nothing has ever happened to them.