The Journey Begins

Thanks for joining me!

Good company in a journey makes the way seem shorter. — Izaak Walton

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Considering an MBA? There May Be a Better Alternative

Great article by President of AFP. In retrospect I’d go with the certification directly over a MBA from anything less than a Top 20 school.

Considering an MBA? There May Be a Better Alternative

Finished Part 1 of the FP&A Exam today

Sat for Part 1 of the FP&A exam today. Here is my general take. Exam was fair and despite some of the criticism I read online, I think by and large the exam did a good job of capturing the key concepts taught in the curriculum and those who pass will have earned the FP&A designation. I assume Part 2 will be similar in quality. Some quick thoughts:
Multiple choice section
  • I was able to finish first pass in about an hour and change, giving me enough time to do a full second pass with time to spare to focus on the real tricky ones I was in between answers on. Time was not a huge factor for me and it usually isn’t on multiple choice exams. 
  • Questions were fair and you could usually narrow down the choices to 2. Picking the right one was the tough part. 
  • The quality of questions on the exam were much better than in the learning system. Not as ambiguous, didn’t need to read 3-4 times to make sure I was understanding the question. 
  • I appreciated the questions were not simple regurgitations of questions from the curriculum. You had to actually synthesize the material to be able to answer some of the questions. This is a good thing, it separates the men/women from the boys/girls. CFA exams do same thing. 
  • More calculations than what the curriculumn emphasized but I went into it expecting to have to do some math.
  • There was definitely material on the exam not covered in the curriculum. My guess is that these are the questions that won’t be scored but were inserted as trial questions for potential future inclusion. 
  • I feel pretty confident I did well on this section. I’m sure I got some wrong and/or made some careless mistakes I would kick myself on. I feel somewhere in between how I felt coming out of CFA Level 3 exam(relatively confident) and Level 1 exam(I knew I destroyed that exam). 
Worksheet Simulation section
  • Time was more of a factor for me on this section but I was able to do two full passes. I did feel rushed however and I usually don’t. I’m sure they’ll calibrate the timing based on results but I think another 10-15 minutes is probably reasonable. 
  • Worksheet was terrible and not because of some of the limitations mentioned elsewhere. The simple fact I can’t use the arrow keys to move cells when entering formulas is a huge time waster. No dragging of corners to pull formulas down either another time waster. I think they either add more time or increase functionality of worksheet. 
  • The font size was too big and should be adjustable. Had to waste precious seconds scrolling up and down to read the question again and go back to worksheet area. 
  • Problems were generally fair and also required synthesis of material, not just memorization/plug and chugging of formulas. Some stretch questions which I appreciated but nothing just totally unreasonable. I would say that some of these questions coud have been multiple choice question since I didn’t think these were really testing your spreadsheet skills. Maybe that wasn’t the point of the question. 
  • I wasn’t clear if you get partial credit if you show your work so in some cases I didn’t even use the worksheet and did it in my head. Hope that’s not an issue. 
  • I think I did OK on this section. Some questions I think I had the approach right but may have messed up a calc or two. 
Critiques:
  • The material that was tested but not covered in curriculum was in the learning outcome statements(LOS) but it’s still a bit unfair to expect folks to know that stuff without touching upon at least the basics. I just happened to see one concept in the LOS and youtubed it this morning just in case they decided to test on it which they did. I was also lucky in that some of the stretch stuff I recalled from my CFA days. Others were probably not so lucky. 
  • The post exam functionality in the learning system allowed you to cross out answers you eliminated. This is something that should be included in the test taking software. Helps with review and narrowing down choices.
  • While I expected some of the differences in the exam from the learning system due to my experience going through CFA program, I’m sure many were blindsided by it. I think learning system could do a better job of preparing you for the types of questions to expect and I would recommend actually using real exam questions in future versions. 
Overall I thought exam experience was positive and enjoyable. I felt challenged and I definitely feel those who pass will represent the industry niche well. I am curious now when I compare my experience to others. I can see why some were caught off guard but I didn’t think the exam was completely unfair. I am looking forward to Part 2 which I’m taking in next 15 days. Now I have a better understanding of what to expect and can prepare accordingly. 

Next exam up? #FP&A Certification

It’s been a while since I posted and I hope everyone had a great holiday season. Hopefully many of you who have followed the blog since it’s inception or at any point in its history are now CFA Charterholders too.

Being a CFA charterholder has been everything I thought it would be. Since I last posted I moved into a FP&A Manager role.  For those not familiar with what FP&A is, it stands for Financial Planning & Analysis. It’s a broad term that can mean different things at different companies but in summary, it really covers budgeting, forecasting and general business planning activities. It can be very strategic or more tactical with a focus on reporting. Here’s how AFP defines it:

A newly certified FP&A professional provides insights to the financial decision making process in an organization through analysis, financial projections (planning, budgeting and forecasting) and reporting.  They may work as a member of a team of financial analysts but they are also able to work independently.

They understand the entire decision support process and are able to contribute to and be responsible for individual components of the process.  They are able to perform these functions accurately and in an efficiently manner and to identify, assess and adapt their processes to changes in the business environment.  FP&A professionals understand and abide by professional conduct standards.

FP&A professionals communicate with others in a wide range of positions internal and external to the organization to understand and gather qualitative and quantitative information on factors affecting the financial performance of the organization.  They are also able to analyze data and relevant facts, consolidate and convey insight to support decision makers and other stakeholders. 

AFP(Association of Financial Professionals) has developed a certification to cover this growing field in Finance and I have enrolled to be one of the 1st beta testers this Spring. Here’s a website that covers the certification:

http://fpacert.afponline.org/

Why am I going for this? Well I love being first at anything and with this certification being brand new, being one of the first recipients of it would be nice. I also expect this certification to become just like the CTP(Certified Treasury Professional) for the FP&A profession. The growth trajectory of FP&A is projected to be huge and folks who can demonstrate proficiency and real world experience will be in high demand. Go read any survey of CFO’s on the skills they are looking for and what area of Finance they want to grow in. FP&A will be at the top of the list.

Regarding the exam itself, here’s a blurb from the site:

The FP&A exam consists of two parts – Part I and Part II – that require a mastery of the critical skills, knowledge and abilities involved in the corporate financial planning & analysis function. Part I-Financial Acumen is a computer-based exam consisting of a variety of multiple choice and fill in the blank questions. Part II-Financial Analysis is a computer-based exam consisting of a variety of multiple choice and spreadsheet based questions. Both parts contain unscored pre-test questions, which do not affect the score and are used in examinations as an effective and legitimate way to test the validity of future examination questions. Pre-test questions are placed randomly throughout the exam.

I have the study material that comes with the exam fees(if you decide to pay extra) and they also have a online self study system that helps guide you thru the curriculum. I have not begun studying yet or even mapped out a plan. Right now I plan to take Part 1 on 3/8 with Part II right after on 3/14. I thought of taking on same day but schedule didn’t allow for that so this should be fine.

I perused thru the curriculum and this should be MUCH easier than the CFA. Lots of this is common sense if you work in FP&A already and I know Excel pretty good so I don’t expect much difficulty in passing this on 1st shot.

As I did with CFA, I will use the blog to document my studies in the hopes it helps someone else down the line who decides to pursue the certification. If anyone else is currently pursuing it or thinking about it, please reach out, I’d love to hear how you’re approaching the exam. 

Received Official Notification Today

#CFA

Dear Mr. Morales,

 

We are pleased to welcome you as a new holder of the Chartered Financial Analyst® designation. Congratulations on this significant achievement.

 

You may now begin using the CFA designation. We encourage you to use the designation proudly in your correspondence and personal references. The Guide for Use of CFA Institute Marks, which may be viewed at http://www.cfainstitute.org/about/governance/policies/Pages/guide_for_use_of_cfa_institute_marks.aspx, provides you with important guidelines.

 

Very soon you will receive a letter from CFA Institute President and CEO, John D. Rogers, CFA. This will be accompanied by a letter which you may use to notify your employer of your accomplishment. The CFA charter will be mailed to your primary address and will be delivered by the end of December.

 

Again, congratulations and we appreciate your continued participation in CFA Institute.

 

Regards,

 

Raymond J. DeAngelo

Managing Director

Stakeholder Services, Marketing & Communications

Well, I’m a #CFA Charterholder finally

I’m happy to report that today I received notification that my application was approved and I am officially a #CFA charterholder. 

It’s been a long journey since I started this process in August of 2008. Seems like only yesterday I was studying for Level 1and wondering where this might take me. I still don’t know exactly but it feels great to see those letters behind my name after lots of hard work. 

Now that I’m done, I can post the “How to Pass” document I’ve been working on. I will do that this week.