May 11, 2007

Mr Wang's Exam Surprises

While studying for my CMFAS exams, I had two surprises.

My first surprise was that the CMFAS syllabus requires students to study the rules on who is required to take the CMFAS exams. This is an examinable topic.

'Well, now, isn't that silly?" I thought. "If you are already studying for the CMFAS exams, surely you must be required to take them."

My second surprise came shortly thereafter. While studying this topic, I discovered that I am not actually required to take and pass the CMFAS exams. In other words, these exams should not be compulsory for me.


Generally if your job is to provide "financial advisory services" to the average client in Singapore, you will need to take the exams. But:

(1) most of my clients are not even in Singapore,
(2) they are all "accredited investors", in other words, sophisticated investors with high net worth, not your average HDB grandmother ; and
(3) I do not advise my clients on anything.

My typical client is a hedge fund or a bank. In fact, every document that I send to my client contains "big boy" language. In this industry, "big boy" language means language that makes it clear that both sides are sophisticated parties; both sides are able to understand and assess the risks for themselves; and neither side is advising nor relying on any advice from the other side.

But since I have already been registered for the CMFAS exams, I'll just take them anyway. Even. Though. I. Really. Shouldn't. Have. To.

This is annoying.


Anonymous said...

Sounds like your average grandma HR policy to me ;)

But seriously, do they pay you money for passing it or is that a pre-requisite?

Lucky Tan said...

Mr. Wang,

I had 2 engineers sitting next to me who took leave to study for these financial analysts/advisor exams. Given their 'calibre', I'm sure they will pass and get all the qualifications.

I often wonder if there will be a glut of qualified people in this area. Just like previous bull markets that saw thousands of people signing up to be remisiers.

I saw also your posting on the "Crazy Bull Market". I've often wondered how long it will last. Unfortunate for a contrarian investor like myself, I thought all this wealth raining on my head was a little 'too good to be true' and I lost some money hedging my portforlio end of last year until Jan 2007 using puts. Ironically, if the puts didn't expire, they would have been worth something in Feb 2007. I did have a long chat yesterday with my broker - he told me P/E are still in their teens something like 15 in US & Singapore(?) ...a bit too high in Shanghai but they are reporting 40% growth in earnings. Buffett said the other day company profits as a percentage of GDP is at a record high and seems too good to last.

Everytime we enter a bull run - its always 'familiar but different' each time. We sort of know the students and housewives in Shanghai can't be right but when they actually get punished is hard to say. Volatility is extremely low world wide and complacency quite high. We could all be sitting ducks for some major market disrupting event.

Its always hard to tell how it will all turn out....and this time its even harder....

hugewhaleshark said...

You might have one of those kiasu kiasi compliance departments who will err on the side of caution just in case MAS drops in on a dinner conversation on financial products with your mother. Or it could be that they simply don't know whether you have to take the exam or not. It's happened before. Me: Which exams do I have to take for my job? Compliance: Donno, you tell us (!!!).

Hey, comment moderation is on, now?

Anonymous said...

What if your job scope changes along the way? Does that mean you have to put everything on hold and take the exams?

Come on Mr Wang, surely there're more pertinent things to complain about.

Anonymous said...

wonderful judgement, sr nathan!
from the talk on the ground and the blogsphere, he is probably the most unpopular president in the history of singapore.
anyway, there is a purpose for him to be in office. if not, it would make the other 'old man' really conspicuous.

Gilbert Koh aka Mr Wang said...

I actually think that my entire team of colleagues (more than a dozen) should be exempted. We all deal with accredited investors only.

Of course, many of them already took the exam, some quite long ago. :)

No, I do not think that the job scope of my entire team will suddenly change. Actually, my entire working time in the banking industry has been on big customers like MNCs and FIs, the kind that definitely have at least 10 million in net assets (that's the definition of "accredited investor" excluding natural individuals).

Anonymous said...

Isn't the real purpose of these exams to enhance your *own* market value - so you could quit and set up as a financial adviser on your own if you have to ?

Admittedly, if you ever went on your own, you would probably make a lot more money serving sophisticated investors, but you never know...

Plus "accredited investor" doesn't mean smart. Taking the exam is just to give your conscience a bit of a twitch when you try to pull a fast one on your sophisticated clients. Quiz: is it a bigger sin to underplay the risks of a $1 investment to a poor widow, or a $1 million investment to a rich tycoon ?

Anonymous said...

eh... Mr Wang, don't you think that stating the type of exam you are taking (if true) could lead to narrowing in identifying your true identities by ?????

Gilbert Koh aka Mr Wang said...

I don't have, and never have had, any clients which are individuals (whether poor widows or rich tycoons). The kinds of clients I work with / have worked with are banks, MNCs, hedge funds and various government bodies in Asia.