| CFA Institute | |
|---|---|
| Formation | 1925 |
| Type | Non-profit |
| Purpose/focus | Finance |
| Location | Charlottesville, Virginia |
| Region served | Worldwide |
| Membership | over 100,000 |
| Official languages | English |
| Website | Official website |
CFA Institute is headquartered in the United States of America at Charlottesville, Virginia, with offices in Hong Kong and London. Formerly known as the Association for Investment Management and Research (AIMR), CFA Institute awards the Chartered Financial Analyst (CFA) designation. In addition to administering the CFA Exam, CFA Institute publishes the Financial Analysts Journal, founded in 1945. CFA Institute also operates the CFA Institute Centre for Financial Market Integrity and the Research Foundation of CFA Institute.
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In 1925, an organization of investment analysts founded the Investment Analyst Society of Chicago. Similar organizations were formed elsewhere starting with the New York Society of Security Analysts (NYSSA) in 1937. In 1947, the organizations merged to create an umbrella organization, the National Federation of Financial Analysts Societies (NFFAS). As societies were formed, they too joined the national organization.
In 1959, the member societies voted to form the Institute of Chartered Financial Analysts for the purpose of providing the CFA certification. ICFA offered the first CFA Exam in 1963 and adopted a three-exam format in 1964. The NFFAS, which later became the Financial Analyst Federation (FAF), remained as an umbrella organization for the member societies.
After many years of operating separately, the two organizations voted in 1990 to move toward a merger as the Association for Investment Management and Research (AIMR). The organizations merged in 1999. In 2004, AIMR voted to change its name to CFA Institute to reinforce its association with the CFA charter that it issues. One hundred thirty member societies have also changed their names to reflect the global society's name change.
Today, CFA Institute claims over 100,000 members. There are 136 societies in 57 countries. More than half of the membership is in the United States and Canada. Approximately 88% of total membership holds the CFA designation.
The largest of CFA Institute's member societies are:
GIPS (Global Investment Performance Standards) is set of standards for the presentation of investment performance information, established by CFA Institute in 1999 with the aim of creating ethical, global and industry-wide methods of communicating investment results to clients and prospective clients.[1]
A key concept of GIPS is that performance should be presented for composites that must include all fee-paying, discretionary accounts managed by a firm or money manager for a given investment strategy or objective. This avoids selection bias: including only accounts with good returns.[2]
GIPS standards represent ethical principles that establish a practitioner-driven, industry-wide approach to follow in calculating and reporting historical investment results for presentation to clients and prospective clients. The GIPS standards arose from the absence of meaningful comparison among reported investment results, even by ethical firms. Several performance measurement practices made comparability difficult, while other practices cast doubt on the credibility of performance reporting in the industry:
Another key concept of the Standards is regarding "verification." This is often a confusing topic, because it doesn't actually "verify" a firm's claim of compliance; rather, it involves having an independent third party review the firm's processes and procedures, as well as their composite construction.