There was a time, not long ago, when rogue elements in marketing departments would come up with all the performance results one could ask for. The Global Investment Performance Standards (GIPS®), first published in 1999 (to expand upon their precursor, AIMR PPS (Performance Presentation Standards)) represented an important step in reclaiming the credibility that the investment industry seemed to have lost due to the actions of a few. The GIPS standards benefited the investment management industry worldwide in several ways, but most importantly by providing a standard for the calculation and presentation of investment performance in a fair, comparable format that provided full disclosure.

Given the scope of the Standards, firms had to invest in new technology and employ personnel who were experts in the field. But until lately, there was no formal course of study for these professionals, nor were there any tests to assess their understanding of the knowledge required for the task at hand.

In November 2005, CFA Institute introduced the first formal study and examination program for practitioners in the investment performance measurement field and called it Certificate in Global Investment Performance Standards (CGIPS). Effective 1 November 2006, the program was renamed Certificate in Investment Performance Measurement (CIPM) to better reflect the scope of the program and the knowledge base it offers. By January 2007, the first group of 98 pioneers was granted the new designation. CIPM was born.

A Toronto-based portfolio analytics professional, I had been working in a performance measurement role for a few years when I heard of the formal training, and am glad that I was able to be part of the first group of people to earn the right and the privilege to carry the designation. But having another acronym added to your name, as pleasing as it is, carries with it the added responsibility of constantly being aware of how you add value to your organization on a daily basis.

How has CIPM affected my career? After going through the program, I feel secure in having the knowledge needed to be the best at what I do. Before completing the program, I always had to deal with the objections of colleagues who were not “happy” about the investment results presented. With the structured knowledge that the program has provided me, I have the expertise and poise to carry out my course of action and be confident that I am doing the right thing. In this era of constant turbulence in the markets, it is more important than ever to carry out my fiduciary duties by knowing and communicating to clients how their money is being invested.

Canadian investment firms should be proud that Canada already has 34 professionals who have earned the CIPM designation, roughly 8 percent of the total CIPM charterholders around the world, and that there are another 38 who are writing the exam as of the latest window in April 2009. Availability of this pool of knowledge can provide Canadian firms with a comparative advantage to be the best internationally.

As a CIPM certificant, I must abide by a Code of Ethics and Standards of Professional Conduct that are closely related to the CFA Code and Standards. Encouraging my (especially non-CFA) performance measurement personnel to pursue the CIPM designation will enhance the knowledge base and ethical standing of my group. Additionally, mandatory continuing education requirements of the program ensure that I constantly upgrade my knowledge in this ever-evolving profession. I am required to complete 45 hours of continuing education over three years to be in good standing with the CIPM Association. This has helped me become more involved with continuing education opportunities and keep my skill set and knowledge base up to date. Moreover, I can use the same continuing education credits for my CFA voluntary continuing education program.

I have been asked how the new program differs from the CFA charter. The main difference is that the CFA charter is a generalist program for investment professionals (such as portfolio managers and research analysts), while the CIPM is a specialist program very relevant to investment performance measurement professionals. Also, the CFA designation is focused on the decision-making process, whereas CIPM concentrates on performance evaluation and presentation.  As a result, a CFA charterholder has an ex-ante perspective (before the fact) while the CIPM certificant is concerned with the ex-post perspective (after the fact).

For performance measurement professionals, confidence, knowledge, and expertise are the attributes that they will gain from the program–the confidence to know the body of knowledge and the expertise to be able to handle ever-changing client requirements.

For organizations, given that the program is designed and is constantly evolving with the most up-to-date knowledge base, and given that clients equate CFA Institute with high standards of professional conduct, they will benefit by having CIPM certificants responsible for calculating, analyzing, and disseminating their performance results. Just as constant system upgrading and a claim of compliance are necessities these days to compete on a global basis, having CIPM certificants on staff gives organizations another advantage in competing for new business.