The purpose of advocacy is to influence decisions within political, economic, and social institutions in order to impact public policy and laws. At times, advocacy is seen as a side effort compared to CFA Institute’s role in education and accreditation, but in fact, advocacy is at the forefront of our collective endeavours. Advocacy efforts played a vital role in creating CFA Institute and the CFA Program, and advocacy was a driving force in transforming the field of investment analysis and management from a business into a profession.

Advocacy created the profession of investment management and research

Members of four financial analyst societies—in Boston, Chicago, New York, and Philadelphia—began cooperating in the 1940s in efforts to persuade their peers and the public that there was a role for an investment profession that would serve investors’ interests in capital markets. Prominent among them was Benjamin Graham, “the Dean of Wall Street” and author of the landmark book Security Analysis. In 1962, these financial analysts identified a testable body of knowledge, established a code of conduct, and created the Chartered Financial Analyst® (CFA) program and designation. In 1963, the profession was formalized when 284 candidates sat for the first CFA examination.

There had been considerable initial opposition to this initiative within the investment industry on the grounds that accreditation based on a designated body of investment knowledge was exclusionary, was somewhat arbitrary, and could encourage government regulation. The investment industry’s time-tested business model was built on relationships and preferred by many industry participants; for some, the prospect of having to pass a new examination to demonstrate their professional competence was unappealing. However, the advocates for creating an investment profession similar to the accounting and legal professions were successful, aided by the credibility they gained by publicly advocating for better protection of investors’ interests and rights, particularly in terms of improving corporate disclosure and tightening rules around insider trading. In the ensuing decades, the newly created CFA Institute and the financial analyst societies, collectively  named  the Association for Investment Management and Research (AIMR) from 1990 to 2004, worked to enhance the reputation of CFA charterholders as professionals serving investors’ interests knowledgeably and ethically.

Advocacy helped build a global profession

Initially AIMR was focused on North America. However, in 1986, the International Society of Financial Analysts (ISFA) was formed. The ISFA and its members worked closely with AIMR to advocate for greater cooperation and coordination among professional investment organizations and their members worldwide; to enhance available knowledge for worldwide investment decision making; and to work towards worldwide harmonization of regulatory and professional conduct standards. Tom Hansberger, an early pioneer in global investment, was proactive in helping AIMR expand its global network of societies. These advocacy efforts were rewarded when the Monetary Authority of Singapore made the CFA Program a requirement for investment professionals in the 1980s, encouraging the financial industries in many other Asian countries to adopt the CFA Program and form local CFA societies.

International advocacy efforts bore fruit again in the 1990s. The CFA Program received strong endorsement from the financial industry and securities regulators in Switzerland, leading CFA Society Switzerland to eventually become one of the largest in membership and encouraging other European investment professionals and regulators to recognize and adopt the CFA Program.

Further evidence that a global profession was taking shape came in 2000, when the London Society of Investment Professionals merged with the large, long-established AIMR to create CFA Society United Kingdom, which adopted the CFA Program as its principal education and accreditation program.

Advocacy is our most effective way of advertising who we are and what we stand for

Our advocacy activities for our body of knowledge, code of ethics, and standards of practice have always been our highest-quality and most effective form of advertising to the world who we are and what we stand for: fair capital markets and fair treatment of investors. In fact, prior to the late 1990s, there was no advertising budget for CFA Institute or for the societies. Press releases and third-party reports of what we were doing to serve investors’ interests were our only forms of promotion. They came at no cost, but thanks to the merits of the actions they described, they were highly effective in enabling us to grow—much more so than any paid advertisements could have been.

Having established the CFA Program as the “gold standard” of the global investment industry, the advocacy efforts of CFA Institute and the CFA societies have become more directed towards protecting investors’ interests in a financial world that has been reshaped by new technologies, the global financial crisis of 2008, and most recently, the effects of the COVID-19 pandemic.

CFA Institute’s advocacy activities today

CFA Institute’s advocacy efforts now focus on advancing policies that serve investor protection over commercial interests and supporting the creation and adoption of rules and regulatory standards that improve market structure, transparency, and fairness for all investors with the intent to expand investment industry professionalism.

CFA Institute takes positions on key issues by engaging in evidence-based advocacy and calling on the collective knowledge of its members and a diverse network of experts. It also responds to current issues and proposed regulations and legislation related to ethical conduct, professional standards, and integrity in global capital markets. A full list of its current projects and activities can be accessed on the CFA Institute website.

The important work of CFA Societies Canada and the Canadian Advocacy Council (CAC)

Today, advocacy by CFA Society Toronto, the largest and most active CFA society in Canada, is conducted through CFA Societies Canada (a collaboration between CFA Institute and Canada’s twelve member societies) and the Canadian Advocacy Council (CAC). CFA Societies Canada employs a full-time staff of three and relies on volunteers from across Canada to guide the organization and support our ongoing activities, projects, and advocacy work. The structure of our advocacy activities is complex and represents a diversity of interests under one roof.

In 2020, CFA Societies Canada gained a more institutionalized presence in regulatory and policy discourse when the organization was asked for the first time to join a Canadian Securities Administrators (CSA) committee, and CAC members and staff joined key advisory committees for multiple regulators. These new relationships are providing earlier insights into policy change and giving us additional opportunities to have more impact. CFA Societies Canada is now systematically tracking regulatory and policy development processes across Canada and seeking to provide input before these initiatives come into the public domain for consultation or comment. CFA Societies Canada also pursues regulatory change on a proactive basis and recently convened aligned stakeholders to call for reforms to advance investor protection in group registered education savings plans and other areas. We also continue to advocate for a sensible approach to title regulation in the investment and financial industries across multiple provinces to control the false messages that titles can convey about the roles and competencies of sales and other personnel in the financial industry.

A recent meaningful achievement was the Ontario Securities Commission’s (OSC) decision to join the remainder of the CSA in banning the deferred sales charge (DSC) option for fund sales, which will take effect in mid-2022. Much has been written in the industry and wider press about the OSC’s earlier decision to break with the rest of Canada by continuing this problematic fee option at the direction of political leadership at the time. Through continued advocacy and by building relationships with political and government staff, CFA Societies Canada was able to keep this issue alive for reconsideration. CFA Societies Canada received notice of the policy shift ahead of the public announcement in early May of this year and had its laudatory LinkedIn post referencing the OSC’s policy change shared by Ontario Finance Minister Peter Bethlenfalvy in lieu of his own announcement on his personal profile.

CFA Societies Canada works to build relationships with regulators and drive our mission and brand awareness. The organization also aims to build a learning offering for regulatory employees based on current offerings such as volunteer-instructed seminars supporting the CFA Institute Investment Foundations® Program, encourage regulators to consider enrolling in the CFA Program, and make them aware of the wider offerings of CFA Institute and the member societies. These efforts have been bolstered by the recent signing of CFA Institute Regulator Scholarship agreements with all thirteen CSA member regulators and both the Mutual Fund Dealers Association of Canada (MFDA) and the Investment Industry Regulatory Organization of Canada (IIROC).

In promoting regulatory recognition for the CFA Program and charter, CFA Societies Canada has worked with the staff of IIROC to finalize and announce the new recognition of the CFA Program as part of IIROC’s new comprehensive rulebook. Although this was delayed due to the COVID-19 pandemic, we were able to have this new recognition of the CFA Program fast-tracked into a bundle of accelerated rule changes and separated from IIROC’s delayed rulebook. CFA Societies Canada continues to look for ways to grow our influence and build our unique voice in regulatory and policy discourse in Canada.

Reflecting on the past year, Parham Nasseri, Chair of the CAC, remarked, “We have increased our engagement with regulators and policymakers, developed thoughtful and rigorous regulatory consultation responses, made strides toward establishing key relationships, and continued to broaden our portfolio of advocacy efforts.” He noted there are now multiple channels to share the CAC’s message across the country and many promising projects in the pipeline.

The work of the CAC often has a low public profile, but it has important ramifications for investors, and there is great value to them in the advancement of our ethical and credible voice in the investment industry. The CAC often serves as the lone investor advocate with the expertise to have meaningful effect. As we strengthen our relationships with policymakers and regulators, the CAC’s and CFA Societies Canada’s ability to fulfill our mandate to advance market integrity, transparency, and investor protection will be enhanced.

Making a difference

The CAC relies on the involvement of members who volunteer their time and expertise to advance its important work. When asked what they would like to be remembered for, many professionals say that they would like others to feel that they had “made a difference.” As an erstwhile member of many CFA advocacy committees over three decades, I can attest that the opportunity to make a difference that benefits both investors and the profession that serves them exists in great abundance in the CAC’s advocacy efforts. Your participation in these efforts could turn out to be one of the best-remembered accomplishments of your career.  

Visit CFA Societies Canada for a description of CFA society advocacy efforts in Canada.