The Investments & Wealth Institute, the professional body that administers the Certified Investment Management Analyst (CIMA), Certified Private Wealth Advisor (CPWA) and Retirement Management Advisor (RMA) certifications, has updated its CIMA curriculum and exam for the first time road since 2019. The organization has changed about 20% of the exams and training requirements to reflect the current knowledge and skills of financial advisors.
The new exam, which will go into effect on August 1, 2024, will focus more on alternative investments and private markets, increasing from 2% to 5% of the exam, and portfolio construction, which has increased from 5% to 8%. As part of the alternatives section, it will also test cryptocurrency and digital asset advisors for the first time.
IWI CEO Sean Walters said these changes reflect high-net-worth investors demanding more sophisticated investment products such as alternatives and digital assets. An IWI survey of HNW investors found that investment management is the most important service they expect from their advisors.
“There are some advisors who won’t recommend products they don’t understand,” Walters said. “And I don’t blame them for that. But if I’m a high-net-worth client and I’m eligible for private markets or private credit, or I have really complex portfolio-building needs, I don’t want my advisor to outsource that to some TAMP or just use a model portfolio that goes down the hill from the home office. I want them to know how to build a high-level portfolio.”
IWI will narrow its focus on some technical parts and areas heavily covered by technology today. Risk calculations and risk measurement will now count for 6% of the Year 12 exam; performance measurement and risk attribution will make up 5% of the 8% exam; and customer discovery and investment policy will account for 6%, down from 8%.
“Today’s professional doesn’t have to understand them as well as they did, say, 10 or 15 years ago, because technology removes that burden, allowing them to focus their time and effort on higher cognitive-level tasks, such as applied portfolio construction or applied portfolio analysis,” said Sean Walters, CEO of IWI.
The exam will also include a new content section on “investment implementation approaches” on 5% of the test. IWI points out that although more advisers are outsourcing investment management to TAMPs, model portfolios or digital allocators, they need to understand these models and the investment decisions behind these recommendations.
“A lot of firms have a team of investment analysts that put together a model portfolio and pretty much distribute it through the advisers that are affiliated with that firm,” Walters said. “It’s like the blue pill that rolls down and they just give it to their customer without a second thought.”
The investment execution section will cover applications of asset allocation methodologies, resolution of concentrated portfolio equity positions, and how to address accumulation and allocation issues based on client time horizons, assets and liabilities, and objectives.
The CIMA changes are based on a 2023 job analysis study conducted by IWI with HUMRRO, a not-for-profit test development organization. They surveyed 300 investment professionals, asking them about the relevance of specific knowledge needed to perform their jobs.
IWI currently has around 21,000 members, around 13,000 of whom hold CIMA, CPWA or RMA certifications. This is an increase from 10,628 certifications in 2019. Less than 3% of advisers hold a CIMA certification. However, a study by Cerulli Associates found that over 15% of teams with assets of $500 million or more have at least one CIMA on staff.
Based on a two-year average, the CIMA exam currently has a 48% first-time pass rate.
“It’s a challenging exam,” Walters said. “I don’t expect it to become more of a challenge. If anything, if it’s more relevant, it will help candidates do better on the exam.”
IWI was formerly known as the Investment Management Consultants Association (IMCA). It was rebranded in 2017 to establish itself as the next step after the CFA and CFP.
