The CFA is said to be one of the toughest exams in the world.

Just Google “the toughest exam in the world” and you will find the qualification next to the All Souls Fellowship – an Oxford scholarship test that once required applicants to write a three-hour paper on a single word.

The certification carried out by the CFA Institute is a theoretical golden ticket for three years to the Willy Wonka factory of high finance. The tests are known to be grueling – each of the three levels requires a recommended study time of 300 hours – and young investment analysts sacrifice the nights of their youth to accelerate their careers.

Dreams are often ruined: The success rate for Level 1 was only 43 percent in the exam last December.

Given its reputation as a high-water financial skills brand, we were surprised yesterday when Bloomberg reported that the CFA Institute was adding cryptocurrency and blockchain questions to the first two stages of its three-part exam. About Bloomberg:

CFA added the topics as part of a new reading called Fintech in Investment Management after industry participants showed a growing interest in surveys and focus groups.

The questions will appear in the new Fintech curriculum and will be included in the tests from next summer.

Stephen Horan, Managing Director of Credentialing at the CFA Institute, described the topic as “not a passing fad”. This description directly contradicts Alphaville’s experience with the blockchain and cryptocurrency scene, which at best seems to resemble an ever-escalating arms race over who can publish the most nonsensical press release. At worst, to quote Obi-Wan Kenobi, it appears to be a pathetic swarm of scum and villains.

Not to mention the fact that cryptocurrency prices have plummeted since December’s Hodl highs.

So why is the CFA Institute getting involved in the face of the crypto nonsense?

It certainly has nothing to do with the business of the institute itself. In fact, the qualification has never been so popular.

Exam registrations for all three levels rose 20 percent to 227,031 for the June exam season, and sales of 312.6 million.

But maybe that’s part of the problem too. If too many boffins are qualified, there is a existential danger that the CFA will become just three letters on a business card and not a prestigious badge of financial wizardry. Crypto questions add another potential layer of complexity to candidates that could help weed out applicants struggling with amorphous concepts, yet finding useful real-world applications like blockchain.

While rising failure rates in the short term may not necessarily be the smartest business decision, as CFA charterers have to pay annual fees to continue their membership, balancing recurring income and audit difficulty will certainly be a priority for the institute.

Another reason may be the future relevance of the degree. As with any accreditation, whether it is a college degree or an MBA, it is clear that the value of a qualification must be demonstrated to a future or current employer.

In a world of shift towards algorithmic trading and passive investment vehicles, the basic financial skills that the CFA seeks to promote are losing some of their luster. Employers may wonder if using an analyst’s time learning a programming language like Python is better than spending 1,000 hours figuring out how to calculate the modified duration using a Texas Instruments BA II Plus or Hewlett Packard 12C will.

The new fintech module in the CFA, which contains questions about big data analyzes and robo-advisers (as well as crypto), is clearly geared towards these new investment limits. But as quantitative hedge funds neglect financial experience in favor of academic PhDs, and assets quickly flow into passive vehicles, those skills could become a niche if current trends persist.

We asked the CFA Institute about the curriculum changes and Steve Horan, Managing Director of Credentialing, told us:

The investment management field is evolving into an implicit technology position as practitioners increasingly rely on technological tools to carry out their craft. Although investment management experts are generally not coding algorithms, they work closely enough with algorithms, machine learning, and big data analysis techniques as inputs to their analysis that a basic understanding of these emerging technologies is widely accepted knowledge today.

However, there is one place where we think crypto questions are needed: the famous ethics department of the CFA.

Fortunately, the CFA Institute has made a commitment. Bloomberg confirmed crypto questions will appear in the ethics quiz, which is 15 percent from level one. So here’s a suggestion from us to get started:

1. Your colleague Izzy recommends that you invest in the ICO of the ToDaMoon coin, a new coin offering that promises to “make you richer than Croesus, but on the blockchain”. What is your answer?

A. Great idea Izzy, let’s buy and HODL until our deepest and darkest desires are fulfilled.

B. The CFA Code of Ethics prohibits investing in magic ones and zeros without a clear regulatory framework.

C. We need to read the whitepaper first to make sure the founder has at least 2 months of bitcoin mining experience.

Suggestions for additional CFA ethics questions related to crypto are welcomed below.

Related links:
The London School of Cryptonomics – FT Alphaville
Universities of the UK: settling for crypto looks bad – FT Alphaville

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