NEW YORK -- A war of words is under way between East Coast financial analyst societies and the Association for Investment Management and Research.
Three regional directors of the AIMR fired off a three-page letter to all members last week warning of opposition by the societies in New York, Boston and Philadelphia to proposed bylaw changes.
The situation illustrates the distrust that exists between the older societies and the 9-year-old AIMR, along with disagreement between the local societies and their elected regional representatives.
Chartered analysts
One bylaw proposal concerns use of the chartered financial analyst designation.
Under the proposed bylaws, anyone using the CFA designation must be a current member of the AIMR. If dues aren't paid, the membership is suspended and the CFA designation cannot be used.
The bylaw changes are outlined in the voting proxy sent to all 32,000 members in preparation for the May 23 annual meeting in Orlando, Fla.
Analyst society leaders in New York, Boston and Philadelphia are concerned the changes represent an erosion of local control and member representation. They have asked their members to oppose the changes until there is a clear understanding of how the changes affect members.
"We are analysts that look at documents to determine the implications," said Lynn Mander, president of the 1,089-member Financial Analysts of Philadelphia. "AIMR is telling us to buy the stock and we don't have enough information."
The AIMR was formed in 1990 by the merger of the Financial Analysts Federation and the Institute of Chartered Financial Analysts.
Society members worry that AIMR staff have their own interests at heart; AIMR staff, such as President Tom Bowman and Senior Vice President Mike Caccese, are strong drivers of the changes, members say.
But Mr. Caccese said all power rests with the board of directors, which represents members.
As for the CFA-membership flap, "it's a lock-in on dues and a tie between being a member and the CFA designation," said Vinny Catalano, president of the New York Society of Security Analysts, the nation's largest group, with 6,700 members.
Members previously could become inactive members without having to reapply for their CFA. The proposed changes eliminates the inactive category. Members who don't pay dues are suspended.
Suspension, if unresolved, can lead to revocation of the CFA designation, he said.
Diploma, not license
"The CFA is a diploma and it can't be taken away from you unless you commit a crime. It's not a license," Mr. Catalano said.
The CFA designation "is not a diploma and never has been," countered Mr. Caccese, who is also AIMR's in-house attorney.
"It has always been a designation and could be taken away for non-payment of dues. But it's not really taken away because we are self-policing. We don't send the CFA police out to check business cards," he said.
Only 519 CFA charterholders failed to renew their membership in the most recent year; the AIMR has 26,406 active charterholders.
AIMR staffers say they have spent the past year exploring ways to combine the bylaws and articles of incorporation of the two merged groups to create a streamlined and efficient organization.
"We've had focus groups and meetings," Mr. Caccese said, and regional directors of the societies signed off unanimously on the proposals.
The AIMR has posted numerous documents for member viewing on its Web site -- aimr.org.
