You’re very passionate about teaching and coaching. How did you get into it?

Gerry Ramos: I never expected to become a teacher, lecturer or coach. I began my career as an Investment Advisor with a bank owned brokerage firm at twenty-five. I recall that the opportunity was fantastic but also overwhelming. I knew I had to improve my knowledge in order to keep up with a fast-paced industry. As I built my repertoire of courses and designations, I received requests from peers to help them to study. Tutoring was (and still is) a hobby that developed into more academic pursuits.

I was a mutual fund wholesaler and then communications director for a mutual fund company. Since the funds were sold through an independent channel of advisors, I felt that by properly coaching and educating advisors on financial planning and portfolio management issues, our investors would be well serviced and have the confidence to remain committed to their portfolios. I believe that coaching is about helping people to maximize their potential. However, coaching only works when people want to be coached and fully commit.

My previous job as training director of a national investment firm allowed me to coach many advisors. I feel more firms should invest in coaching. Most companies say that they invest in their employees. In my opinion, simply investing in better office space or technology is not a direct way to invest in someone’s professional development. Coaching provides a high ROI ‘Return on Individual.’

How can advisors with a CFA designation benefit private clients? How strong is this trend?

GR: Most of the students that I meet as part of the University Relations Committee see the CFA designation as a way to bolster their job prospects as an analyst, investment banker or portfolio manager. Few students have indicated a desire to work with private clients. I feel that trend is changing.

The investment counselling business is growing as the overall wealth management business in Canada is maturing. Investment Counsel Portfolio Managers must have either a CFA or CIM designation and the required work experience to manage assets for private clients, pension funds, trusts, endowments and corporations. High net worth clients are attracted to the skill-set and personalized service an investment counsellor brings. It’s certainly a growth area. The Investment Counsel Association of Canada (ICAC) states that its members manage over $500 billion in assets and growing.

The competition for clients in the advisory business will always be fierce. I don’t think that it’s sufficient to only have the Canadian Securities Course to be qualified to handle the needs of increasing sophisticated investors. The CFA designation provides credibility and a further way to help advisors or investment counsellors to stand-out from the over 100,000 people licensed to sell securities and mutual funds in Canada.

The CFA exams are notorious for their low pass rates. As someone who has taught the CFA curriculum, what do you think causes this?

GR: There are similarly low pass rates in many professions but it’s just structured differently. Very few that apply to medical school or law school get admitted. The CFA program is extremely fair. It allows many people to attempt the program and their ability determines their outcome—not an arbitrary admissions process.

When asked about pass rates I usually respond with, ‘scarcity creates demand.’ The value of any designation is creating a rigorous process of vetting new members and upholding the knowledge the designation represents.

The overall difficulty of the program is responsible for the low pass rates. It takes tremendous discipline to adequately prepare and each level has additional knowledge that the candidate must master. In addition, the testing format changes with each level from 360 questions in Level I, to 240 item set questions in Level II to both item set and written answers in Level III. I believe that each level isn’t harder or easier than other levels but rather demands a different approach.

What are some of the changes you’ve seen in the CFA materials over the last few years?

GR: The core curriculum hasn’t seen too many drastic changes. Ethics remains important for all three levels. Level I and II have always focused heavily on financial reporting and analysis or simply referred to as “accounting” by students. The overall exam weights assigned to the ten topic areas also hasn’t changed too drastically. However, I have noticed that the readings have included more international themes as the majority of candidates and charterholder growth is coming from outside North America. For example, differences between IFRS and U.S. GAAP is discussed thoroughly at Level II.

I particularly like how the CFA texts are written and that they are included with a candidate’s exam registration. Previously, many candidates relied upon study guides and ignored the recommended textbooks. I find that more candidates are using the CFA published texts and attempting the textbook questions. Hopefully that approach will lead to well prepared students.

What would you recommend students do to better their chances of passing?

GR: Many students have impressive academic backgrounds and most have some work experience to relate the curriculum to. In most cases, all of those things factor little into a candidate’s chances if they’re not well prepared. There’s simply too much content to cram in a short period.

I suggest that students complete their readings by the end of April or earlier and spend the remaining time doing questions. Students should also attempt several mock exams in real test taking conditions to prepare for the physical and mental requirements of a six hour exam.

The best prepared students have a study schedule and game plan of overcoming their weakest areas.

What do you see as some of the difficulties students have and how do you recommend they handle them?

GR: One of the key issues that I see doesn’t relate to a candidate’s ability to learn the material. I know of many candidates over the years that have quit the program due to personal reasons. The primary reason is that they didn’t anticipate the amount of time that it would require over the minimum three years to get through the exams.

I suggest that prospective candidates investigate if the CFA program is what they want and if they can truly commit to it. Sacrificing weekends and social occasions is customary for many candidates that must juggle a hectic work life, family and studying.

I suggest that getting the support of their family and friends will go along way to maintaining the discipline to study and pass.

You’ve spent time liaising between academia and Bay Street. What are some of the benefits to both sides to having stronger ties? What are some of the challenges and how are they best overcome?

GR: There is an old adage that I detest, ‘Those that can’t do, teach.’ I believe for many years that adage was alive and well in our industry. Academics taught students about investing from stale textbooks and addressing current events was seldom done. There are now much closer ties between Bay Street and academia. I recently taught CFA Level II for Concordia’s joint CFA and MBA program offered by the Goodman Institute. Ned Goodman, CFA, chairman of DundeeWealth and Dr. Ian Rakita, program director have worked closely to create a program that integrates real world investment management knowledge with a strong academic foundation.

The increasing number of MBA and executive MBA students in Canada also shows there’s a strong demand for advanced education. But students are also demanding value for the significant time and cost that they’re devoting. Students want their MBA to make them more marketable to an employer which means having real world expertise. Schools are responding by using more case studies and inviting business people to share their knowledge. Benefactor, Ned Goodman says it best when he states why he decided to support Concordia in their new endeavour, “After forty years as an investment professional, it was clear to me that the conventional business school approach had not been preparing graduates for the real world of investment management.”

The challenge is that there will always be a divide between academia and Bay Street. Knowing what works in a textbook or scientifically designed algorithm doesn’t mean that it works in the real world. Long-term Capital Management was a U.S. based hedge fund that failed spectacularly in 1998 when it lost $4.6 billion in less than four months. Board members Myron Scholes and Robert Merton shared the 1997 Nobel Prize in Economic Sciences. I believe their academic work is genius. (Charterholders reading this article can probably recall agonizing over exam questions relating to the Black-Scholes options pricing model.) However, the real world is a laboratory no one can predict or control.

How important has mentoring been for you in your career so far? In your experience, what works and what doesn’t?

GR: Mentoring is something I never really understood until I had the humility to want to be mentored. The president of a firm I worked at took a personal interest in my career development and personal choices. We developed a friendship and I still count on him for advice. During our meetings I recall that he was a great listener but he also called me to task on several issues—namely things I said I was going to do and kept me focused on my stated goals.

I always appreciated his help and I vowed to return the favour to others that might need the support.

I feel that a mentor is a different role than a boss or a coach, although they may also be the same people. A protégé should feel comfortable to speak openly to their mentor in a way that an employer relationship may not allow. For example, a protégé may have career doubts. I would caution an employee to think twice about stating that to his or her boss unless they are on very open terms.

Some people are simply not prepared for what mentorship is about. Protégés should not expect that their mentor agree with them, be at their beck and call or provide them with employment opportunities. Protégés benefit from a mentor’s wisdom, experience and general care about their welfare. Mentors are a source of encouragement and can help to provide clarity on some challenging issues.

I currently participate in Toronto CFA Society’s mentoring program. It’s been a rewarding experience and I encourage members to look into participating.

What is the last book you read?

GR: I read The Shock Doctrine by Naomi Klein. It was very controversial, and while I can’t say that I agree with many of her assertions, I respect her viewpoints and the research that went into the book.

I prefer reading non-fiction. I try to become well rounded by reading many topics and not just finance books, although I do seem to gravitate to that area of the bookstore. One of my favourite books is Man’s Search for Meaning by Viktor Frankl. It chronicles the author’s life in a Nazi death camp and lessons for survival.

CHARTERHOLDER PROFILE is a regular feature of The Analyst. Do you have suggestions for members that we should profile? Email us with the member’s name and a few sentences about who he/she is and why this person would make an interesting choice for a profile. TheAnalyst@torontocfa.ca