Addressing the first comment, I’d assume you’d have less people end the program if they had a second bite at the apple six months later than having to wait a full year. With only 30% of those that sit for L1 becoming charterholders (I think I read that once), I’m assuming some of those are quitting after failing L2 (I’d say most, in fact) and would be more inclined to try again if the second test was only 6 months away – hence, more revenue.
But if your assumption is right, which is the same amount would try again in a year, then offering the test earlier wouldn’t matter either, right?
Your second point I feel is more valid and sort of owns me, I must admit, in theory. Yes, you are correct that CFAI is a non-profit, but in my experience with non-profits (I dated a lady that worked at one – yes, I know this does not make me an expert) they try to grow every year as well in order to pay for salary increases and other increased expenses while maintaining certain funding ratios.
Simply put, the long-term goal of every organization is to grow, and although the CFA’s goal isn’t necessarily pure profit, but rather to improve the investment profession, you still need assets to improve and broaden your scope.
*no response needed nor expected – unless you feel so inclined*
First question: I think nobody’s addressing your previous post is because it’s a new and unrelated conversation to the thread at hand. May I recommend starting this in a new thread?
Second: The long-term goal of *every* organization is to grow. Yes, it’s not a profit-seeking entity, but more capital allows the CFAI to hire more experts, more admin staff, more (and perhaps faster) graders, etc., to expand its goal of improving the investment profession.
In my opinion, the CFA designation will not fall in reputation just because all the levels are offered twice a year. No designation must be difficult to earn simply because it takes years to pass. June may not be the best time for a few candidates to take the exam. Punishing them by asking them to wait for a whole year is simply not good. Besides, level 1 was offered only once few years ago. But now is offered twice. I would love to know if candidates vehemently opposed to that decision too. But now everybody is used to the level 1 happening twice a year. When an organisation offers the exam twice to hook candidates in, its not very nice. And I don’t think that CFA lacks the resources to come up with quality questions in 6 months. Is the exam committee understaffed because charterholders do not care and not many volunteer? The exam must be difficult to pass not because the candidates can’t take the exams soon enough. It must be because the candidates can’t get through with random guessing. And for this CFA must get more creative while setting the question paper, and should not be afraid that a retaker will simply know the answer to a lot of questions.
To be fair, I think there’s a more immediate bump in salary for those that earn the CPA designation more than those who earn the CFA. Part of that is due to state and federal regulation, as you need the CPA to practice as an actual accountant. I guess I’m unsure of the point you’re trying to make here as you bag on the CPA as getting easier but then say that makes jobs that *don’t truly require a CPA* less valuable.
While I’m sure working a late-night shift at McDonald’s that *doesn’t truly require a CPA* can appear less valuable to you, what does an easier CPA testing process have to do with that…or for accountant-type jobs that don’t require a CPA, for that matter? If the job doesn’t require the designation, you shouldn’t use that job to judge the designation.
That said, I love the rigor of the CFA and the material and are happy with my decision to take this journey. I think it wouldn’t ruin the designation to add another L2, though
You’re ignoring the additional cost of developing and administering the exam more often. If revenue doesn’t increase (or increases moderately), then it’s a money-losing proposition.
That’s a great point. The development costs would be as large as the June one and it would be a vignette, unlike L1. You’d probably save a little on admin, but rental costs would be as expensive I bet (unless it’s a hall where L1s and L2s sit together). Even if rental costs were the same, development and grading costs would be higher.
In the end I think they could still do it, but you pretty much closed the door on my “more profit” argument.
I don’t think my comment is off topic, here. I presented it as another reason why the exam might only be offered once (to promote actual learning and understanding) and why those who just barely fail shouldn’t get the “second bite” any sooner.
A few people were arguing the exam should be offered more frequently (because these candidates supposedly understood the material, were prepared) and it was also mentioned that having the exam more frequently would benefit the just barely failed candidates (and it was implied, if I recall, that having to wait a year was harmful to some of these candidates). In my other post, I’m indicating that the real benefit is waiting the year like everyone else, for reasons I touched on in that post. I think if someone could make a convincing argument that what I said isn’t true and isn’t a good idea (in my other post), you’d be better able to support the change in testing frequency.
Good point-there could be some more discussion when the results are out.
Also, since you birthed the thread and have been a strong believer in the concept, maybe you would like to comment on my post (#157 in the thread). We’ve cleared up how I meant for it to apply in this thread, so I think feedback on those points would be useful.
“CFA Program exam administrations, which are the primary source of revenue for the organization, decreased 1% to 210,300, versus 212,100 in fiscal year 2013. However, the June exam represented the largest exam administration in our 50-year history. New Level I candidates decreased 2% versus fiscal year 2013: This group of candidates is a leading indicator for potential future demand for the CFA Program and the financial performance of the organization.”
Agreed onlysimon, but I (personally) think S2000 has a point that we don’t know the expenses for adding a second test and it seems quite high to me. We’ll never know, I guess, but I will say this hypothetical has put our skills to the test.
