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Course correction?

Keith Ambachtsheer raises curriculum questions for CFA Institute

Keith Ambachtsheer said the CFA Institute’s exam curriculum is too focused on the past.

The relevancy of the CFA curriculum is under the microscope of Keith Ambachtsheer, president of KPA Advisory Services in Toronto, who said it's too focused on the past, not the future.

Earlier this year, Mr. Ambachtsheer pressed the CFA Institute on whether its curriculum was sufficiently oriented to the future. In a December letter to clients, he noted the institute's "creative'' response to his concerns: A 50-pound FedEx package arrived at his home, containing 17 volumes of the 2017 course material.

After sampling a selection of reference articles included in all three levels of exam material, Mr. Ambachtsheer said the articles on average were 20 years old.

Drilling down into the four major topics of study for the chartered financial analyst designation, Mr. Ambachtsheer wrote that the program needs to address asymmetric market information among participants and criticized the short-term "beauty contest" focus of investment management, which fails to transform savings into wealth.

Despite empirical evidence that long-term investing achieves that goal, the practice persists, he said.

"Should CFA candidates not be challenged to think hard as to why this is so?" he wrote. He also contended that the courses ignore the need for global sustainability and oversight on corporate governance.

A more future-orientated curriculum would ensure the CFA designation maintains its relevancy and, ultimately, its reputation, Mr. Ambachtsheer said.

CFA Institute managing director Stephen Horan acknowledged that Mr. Ambachtsheer's letter offered informed and valid opinions. But he noted that the CFA curriculum is designed to be a survey of the current practice environment — not a predictor of the industry's future.

Mr. Horan also pointed out that topics such as ESG and sustainability are integrated into course material, particularly in ethics and valuation, where the factors are introduced as constraints to be considered.

In an interview, Mr. Ambachtsheer said the reaction he received from the CFA Institute has been a constructive "we hear you" and that efforts are in place to speed up the material review process.